Expect record-high prices for lump crab to remain into the fall, as strong demand and lack of supply combine to create problems for buyers.
One lump crab seller says supply issues in Indonesia, a major supplier, are pressuring the market. Raw material volume is down about 35 percent this year.
“That is going to put a real strain on what is going on through September,” the executive said.
As a result, prices for blue-swimming crab show no signs of declining, and are up more than 20 percent from the fourth quarter of 2013, he said. Wholesale prices for backfin lump were around USD 13 (EUR 10) in the second week of April, a 15 percent increase from the USD 11 (EUR 8) level they were at one month earlier. Prices for jumbo lump, around USD 18 in December, were around USD 23 (EUR 17) in early April, according to the most recent price reports.
This puts jumbo prices ahead of the record USD 22 (EUR 16) a pound seen in 2009, the executive said. “We'll probably see USD 24 (EUR 18) before the new season starts in October,” he added.
High prices have yet to impact demand in the United States, but at some point they will, the executive said. “The market will only bear so much. We think at USD 24 they won’t absorb it and it will move to other markets,” he said. “We’re about to hit something we’ve never hit before.”
U.S. demand remains strong for now, but with no more than 20 percent of the market served by crab from the Chesapeake Bay and the Gulf of Mexico, the market relies heavily on imports.
In addition to supply issues in Indonesia, there are problems with product coming out of the Philippines, where fishermen are still trying to get back to business as usual after Typhoon Haiyan decimated parts of the country last year.
“We knew raw materials weren’t going to be as high as last year, and when a typhoon takes out an entire country, the Philippines, that takes about 15 percent of the production out of the marketplace,” the executive said. “Then it’s a scramble from there. It wasn’t the plants themselves that were destroyed, but all the boats were.”
While shortages haven’t created real problems just yet, the executive is taking a cautious approach. “I won’t say we’re nervous yet, but at this point, on blue swimming, we’re not taking new customers,” he said. “We’re not scared yet but it could change tomorrow.”
Elsewhere, the start of Canada’s snow crab season sees prices to fishermen higher than last year, with catchers and processors agreeing to a figure of CAD 2.30 (USD 2.09, EUR 1.54) a pound, up from CAD 1.90 (USD 1.73, EUR 1.27) last season. Industry officials have been quoted as saying the price is fair, and mirrors price increases seen in the Alaska opilio market.
The price increases also will help mitigate the effects of quota cuts to the Canadian catch. Early April prices for snow crab from Newfoundland and the Gulf of St. Lawrence were ranging between USD 5.40 (EUR 4) a pound to USD 6.70 (EUR 4.93), depending on size.
