China Fisheries & Seafood Expo 2018 And Market News
Nov 22, 2018


Jupiter attend 2018 China Fisheries & Seafood Expo. We had constructive discussion with partners, made a plan for cooperative development in 2019.

Looking forward the new start of 2019.

Russian Fishery move 

Russian Fishery Company (RFC), one of the largest suppliers of headed and gutted (H&G) pollock raw material to the Chinese sector, has started contract processing in a plant in Qingdao, FedorKirsanov, the company's CEO, told Undercurrent. 

RFC has just completed the first order of double-frozen pollock blocks in a new model for the company.

“We’re breaking into the double-frozen market ourselves. We are working with a factory in Qingdao. We will process in a partner plant, then we will sell ourselves,” he said, declining to name the plant the company is using.

“The Chinese plants used to buy and sell. In this arrangement, they are just processing, and we will sell it ourselves. We have already sold the first batch. The products have been processed, sold and shipped to a big customer in the EU. As processing is struggling and some of the customers in Europe don’t see the price level being at the level we do so that we will do it ourselves,” Kirsanov told Undercurrent.

The next step will be to increase the volume of double-frozen fillets produced in China. “Then, that product will go to Europe, to Russia, and we will send some to China to do the value-added stuff.”

The Chinese industry "is not in its best shape", he said.

"We see consolidation, but it’s not healthy consolidation, it’s people going bankrupt. The retailers and the EU customers were putting too much pressure on the processors who don’t have good working capital, so they go bankrupt. That results in less capacity available," he said. 

"So, there will be two things happening, consolidation and less capacity that will lead to higher processing costs. Then, there will be a social tax applied in China next year. It will lead to a double frozen [price] increase," said Kirsanov. 

The social tax change was confirmed by several other sources. According to Chinese processors, it means the tax will be paid centrally to the government. Previously, the tax was supposed to be paid in the province the migrant worker came from, which meant compliance was very low, several sources told Undercurrent.

Also, the access to workers in China is getting worse, multiple sources said.

“The worry is the worker situation. Everyone is worried about that. It gets worse every year,” said another source with a supplier, who asked not to be quoted by name.

RFC sees the double frozen fillet price from China starting at $3,200/t next year, he said. 

Also, prices for PBO, double frozen blocks and H&G will increase further in 2019, according to Undercurrent sources. 

During the China expo, ex-warehouse prices of around $3,500/t were being discussed for PBO blocks for A season. Prices for B season of 2018 were done around $3,350/t. 

“We see the price of $3,500/t reached and confirmed and we will take it up from there,” Kirsanov said. 

Meanwhile, for Russian H&G, prices have risen to around $1,550-$1,560/t for the small volumes available at the end of the year, for 25cm fish. However, the expectation is prices will not dive at the start of the year and will remain firmer next year.

“The current H&G number is $1,560/t, but there is no volume on the market. For next year, we see the price being somewhere between $1,400-$1,500. The price will be stable, but on a high level,” Kirsanov told Undercurrent.

“We also have a different outlook for production for our company, we won’t produce any H&G in B season. We have another plan in mind. The result of that plan will be we don’t do any H&G in B season. So, there will be even less fish in B season,” he said.

“If someone wants H&G in the fall, they have to buy in season A. This is when the price usually comes down, but it won’t next year, as there will be less H&G available,” Kirsanov said.

------- Quoted from Undercurrentnews.

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