Trident: Demand for pollock fillets will be 40,000t over supply this year

News   15/03/2018 - Nguyễn Trí Tín

BERGEN, Norway -- The demand for Alaska pollock fillets and blocks in 2018 will be 550,000 metric tons, while supply will be 510,000t, according to Torunn Halhjem, a senior executive with Trident Seafoods.
Although the US pollock quota is being reduced in 2018 and Russia is also cutting its total allowable catch, it’s demand that is driving the gap and not reduced supply, she said, during the whitefish conference at the North Atlantic Seafood Forum (NASF) in Bergen, Norway.  “I have been with Trident for 18 years and have never seen such a rapid increase in demand. A demand-driven market is new for us,” she said, referring to the woes for pollock sellers over the past few years, as prices dropped to as low as $2,350 per-metric-ton for pin-bone out (PBO) blocks.
Although she did not talk prices, Undercurrent Newssources have given A season levels of $2,950/t-$3,000/t for Russian PBO and $3,000/t-$3,050/t for US pollock. Also, levels of $3,300/t are already being talked about for B season of 2018.
As reported by Undercurrent at the end of last year, Trident is now in the market as a net pollock buyer, in order to feed the new product development in its plants in the US, China and its Pickenpack Seafoods plant in Riepe, Germany. 

“Companies are saying Trident is speculating and causing the market to rise,” said Halhjem, at NASF on Thursday. “We’d love to take the credit for it, but we can’t. It’s the consumers.”

According to data presented by Halhjem during NASF (see below), single- and double-frozen fillet demand will increase 15,000t in 2018 in Europe, to 300,000t. In US, Trident -- the largest pollock player in the world -- models demand will also be 15,000t up, to 120,000t.

Trident pollock demand

The change in rules to mean only US-caught fish can be labeled Alaska pollock at the end of 2015 has created lots of demand from retailers and foodservice outlets in Trident’s home market, she said.

Then, in Asia, where Halhjem said demand is growing for consumption as well as re-processing, it is forecast to increase 10,000t to 110,000t. China is the biggest driver here.

China is importing more pollock and yet exports are down (see below), said Halhjem. This shows consumption of the fish is rising in the country, she said, displaying trade data that backed up the claim.

Pollock sales in and out of China

“Chinese H&G [headed and gutted] imports are rising, while the double-frozen block export is dropping. So, more pollock is staying in the domestic market,” she said. Historically, Chinese processors import H&G and then re-export to the EU and US as double frozen fillets. 

“It’s not only H&G, though. We are also selling more blocks and fillets,” said Halhjem.
Trident is seeing more demand from big restaurant chains (see image below), such as McDonald’s and Burger King, who are rapidly opening stores in China, she said. Also, the US company has launched a pollock sandwich in Starbucks.

“Also, we are not selling to Asia cheaper. They are paying global prices,” she said.
The projected growth for sales to Asia is mind-blowing. The number to Asia even surprised us at Trident,” she said.
Also, Japan -- the biggest market for pollock surimi -- is starting to introduce different pollock fillet products to the market, said Halhjem.
The US is exporting more pollock to Asia and less to Europe, data presented by Halhjem shows.
Then, Russian market, where domestic fishing companies are producing more single frozen fillets and looking to sell less H&G pollock to China for re-processing, demand is forecasted to increase 8,000t to 28,000t.
“The Russians are also doing a great job with new products for the domestic market,” she said.
Halhjem also said demand for surimi will outstrip supply, due to growing consumption in Asian countries outside of Japan and lower supply of warmwater surimi base. Alaska produces around 205,000t of surimi annually, with demand set to increase 5-10% in 2018, she said.

With 50% of the A season quota harvested, surmi production is up to 44,000t in 2018, from 37,000t at the same point in 2017. Pin-bone out production is up 4,000t year-on-year, to 21,000t. Deepskin pollock production has increased 2,000t, to 14,000t, according to the data Halhjem presented. This would have been higher, but deepskin production is behind schedule, due to smaller fish size, she said. 
Deepskin demand is rising, partly due to the higher cod prices, she said, a point also made by Rasmus Soerensen from American Seafoods Group, at the recent Global Seafood Market Conference in Miami, Florida. Due its "snowy white" color, deepskin is used by processors to replace cod at times when the prices for the latter are higher, she said.