“Fickle” is how a Canadian seafood broker characterized the reaction to the early days of the Atlantic snow crab market, noting that there has been a general resistance among U.S. buyers to commit to early season prices.
And “frenetic” was the word used by a U.S. seafood marketer, who noted that “one minute you have too much supply, but in the next minute you don’t have enough.”
The Newfoundland snow crab season opened in early April despite the threat from ice jams that persisted after a long winter. One supplier based in Nova Scotia said the especially cold winter would be good for snow crab stocks, resulting in a later molting season and higher meat yields.
The weather did cause some delays at the season’s beginning, said the marketer, though “some of it is exaggerated. And if the price is right, there is no ice,” he said.
After initially setting the per-pound price to harvesters at CAD 2.34 (USD 1.87, EUR 1.72), the Price Setting Panel accepted a recommendation by the Fish, Food & Allied Workers union to increase the minimum snow crab price by 11 cents per pound.
The price can change weekly by 12 cents per pound based on the strength or weakness of the U.S. dollar vs. the Canadian.
Although U.S. buyers have been reluctant due to initial prices, the broker said both Chinese and Japanese purchasers are coming in at CAD 4.65 a pound (USD 3.72, EUR 3.42).
“The currency is what is causing all the problems,” he said. “There has been resistance from U.S. retailers because they don’t have the margins they like to see.”
Additionally, said the U.S. marketer, consolidation among Newfoundland’s processors and upfront money paid by Japanese buyers means the suppliers “aren’t in great need of cash” so they can hold out for higher prices.
“There’s posturing from the fishermen and the processors,” he said. “And customers say, ‘Call me when it’s at the bottom.’ We fear that right now there is no downward pressure on the market. The crab is in the hands of those who are well-heeled.”
In late May, f.o.b. prices for Newfoundland snow crab clusters were topping out at USD 4.85 (EUR 4.46) a pound for the smallest sizes, while 10-ounce clusters were bringing as much as USD 5.60 (EUR 5.15) a pound.
Prices last year rose as demand increased and quotas were reached. In mid-June, 5- to 8-ounce clusters were selling for up to USD 5.25 (EUR 4.82), while 10-ounce and higher sizes were at USD 5.85 (EUR 5.37) or more.
The marketer estimated that 4-ounce clusters would be short this year, along with 10s. Japan specifies 4 to 8s, with most of the 4s going to Asia.
Snow crab (Chionoecetes opilio), which is a popular menu item for American buffet-style restaurants, is being taken off menus or restaurateurs are offering it less frequently because of the current price, said the broker.
Landings have been “half decent” thus far, he said. The total allowable catch for the Newfoundland and Labrador region for 2015 was set at 56,636 tons. The overall quote is about 2 percent lower than 2014, with a 23 percent reduction in the 3Ps area based on stock management issues.
Little inventory remains from last year, and the broker predicted that the market “will consume what’s available” even with a slow start to the buying season.
“It’s a typical year,” said the marketer. “No one really knows what is going on.”
