Experts predict cod market will remain strong in 2020
A panel of experts at the Global Seafood Market Conference (GSMC), held last week in Orlando, Florida, U.S.A.predicted the cod market will remain strong in 2020, thanks to relatively flat supplies and strong demand.
Global cod fisheries are expected to harvest just over 1.5 million metric tons (MT) in 2020, roughly the same amount harvested in 2019. As supplies remain strong but relatively stagnant, demand for the fish appears strong, with the price per MT in 2019 higher than at any other points in the past decade.
“It is fairly likely to think that price increases will come with H&G going forward,” Nordic Group Vice President Frank Bodin said. “When you look at that picture, the supply and demand picture looks tight in 2020.”
Prices are being further buoyed by the strength of the salt cod market at the moment, coupled with a Norwegian kroner that has strengthened against the U.S. dollar, Bodin said.
“Right now the salters and driers are trying to buy a lot of the bigger fish coming out of Norway,” Bodin said.
Prices for virtually every form of cod loin are reaching long-time highs, with some sizes of loins sitting at prices that haven’t been seen for more than a decade.
Shifting supplies have also been a big part of the industry in recent years, with the Gulf of Alaska cod fishery closing completely in 2020 and the Russian fishery increasing.
“The Russian fishery, which used to be a small portion of the cod fishery, is [now] actually of equal size, if not a little bit bigger, than the U.S. side,” Bodin said. “A majority of that Russian fish goes to China.”
The pricing and supply constraints are juxtaposed by cod receiving increased exposure on U.S. restaurant menus, especially in fine-dining restaurants. Compared to some other whitefish, it had much higher menu penetration, with nearly 14 percent of menus carrying cod, according to Datassentials.
That menu penetration is also balanced by consumer trials showing that at least 85 percent of consumers know about it, and 61 percent have tried it. Of those that have tried it, 45 percent either liked or loved it.
“We were laughing earlier about how fish and chips has become a fine-dining item,” Jonathan Shirley, director of category management seafood at Sysco Corporation, said.
The Fishin’ Company Chief Operating Officer Heath England said he’s been seeing once-frozen Atlantic cod become a more premium item in recent years.
“I can say on the retail side, a lot retailers have put a lot of emphasis, a lot of marketing, and a lot of effort,” he said of cod.
An additional factor in the higher pricing, Bodin added, are changes in the Chinese processing sector that are starting to have an effect. As a result, China's processing capacity is decreasing, he said.
“That trend is still going on. The number of factories and capacity is shrinking,” he said. “Ten, 15 years ago there was 120 factories, now it’s down around 30.”
Photo courtesy of Grigorev Mikhail/Shutterstock