Opposite directions for snow, king crab markets
While the snow crab market is backed up due to an excess of Canadian product and a higher quota for Alaska opilio this season, supermarket chains are working to move red king crab that they bought at higher prices early in the season.
At the start of Alaska’s red king crab season in October, wholesale prices were pushed to record highs when Japanese buyers snatched up large portions of the anticipated yield. However, those higher prices pushed some retail and restaurant buyers out of the market. Smaller retailers and restaurateurs simply dropped out of the market, but larger operators bought large quantities of red king crab at the high prices, distributors tell SeafoodSource.
“Some smaller groups elected not to move forward with their purchase this year. Fishermen were not even happy with their prices,” said Eric Donaldson, partner at The Crab Broker.
Japanese buyers acquired what they needed before the holidays, and then stopped buying, according to some distributors. “Some packers are sitting on product in storage that they thought would flow into the U.S. market. But, at the prices being asked, many retailers and white-tablecloth restaurants stepped away from the category,” said Stuart Kozloff, a partner at International Seafood Ventures in Seattle and Bering Fisheries in Dutch Harbor.
Distributors report January wholesale prices as high as USD 24.75 to USD 25.25 per pound for 6-to-9-count red king crab.
Meanwhile, the snow crab market has slid downward because of the high Canadian inventories. “The Canadian packers produced a lot of product this past season and still have inventories on hand,” said Kozloff. Canadian snow crab prices are wholesaling for as low as USD 5 a pound for 5-to-8-ounce clusters.
Kozloff and others are worried about demand for snow crab this year, because of the excess Canadian product and Alaska’s nearly record quota for this season’s opilio harvest. The total allowable catch (TAC) for the 2011-12 season is set at 88.9 nearly million pounds, almost double last season’s TAC of 54.3 million pounds.
“This is the largest quota we have seen in recent history,” said Kozloff.
However, fast-moving ice off the coast of Alaska this year may affect the harvest, and, in turn, pricing. “Ice is already down to St. Paul, and deliveries to St. Paul could be affected,” said Donaldson. “And, if the ice goes south of St. Paul, it will be difficult to set gear on the grounds.”