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Dramatic supply reversal brings glut in place of former drum-tight market.

Dramatic Supply Reversal Brings Glut in Place of Former Drum-Tight Market "All in all, we have to be prepared to live a relatively difficult situation for another one or two years," warns ISC organizer Bob Erkins.

Only a year after cod and other North Atlantic fish were in such short supply that processors in Europe and the United States had trouble getting raw material, a monstrous glut has developed.

"Both in the U.S. and in Europe, the industry is toiling under important stocks of both raw material and finished goods," Robert Erkins told delegates attending International Seafood Conference in Amsterdam. "Regular sales of fish blocks have completely stopped and the bottom has gone out of the market."

Blue sheet prices for cod blocks had reached $2 a pound in the fall of 1987, recalled Erkins, organizer of the Conference and publisher of the Erkins Seafood Letter, and they remained at that level until last February. But then sales stopped; prices plunged to $1.50 on the blue sheet and, unofficially, as low as $1.

"If I am correctly informed, the Canadian summer fishing season has been good," Erkins told the gathering of global seafood experts in his welcoming remarks. "But the products manufactured are apparently still in the cold stores. Should this be true, as we fear, what will happen further to the market if our friends -- called competitors -- should decide to unload onto the U.S. market?"

European markets have been slower to react to price changes -- mainly due to the fact that processors of blocks and finished products are often the same firms. Nevertheless, prices had to be cut sharply at the consumer level to avoid volume losses, and as if that weren't bad enough, the West German market for fish products (especially saithe) collapsed after a TV show graphically depicted fish infested with nematode worms.

West Germany's Unilever further undermined confidence in fish and seafood by announcing that, in order to protect consumers from products contaminated by water pollution, it would no longer use raw material from either the North Sea or the Baltic Sea. "Our friends of the Faeroe Islands must be pleased, as they will become more or less sole supplier to Langnese-Iglo," Erkins observed. Norway should also benefit--but other fishing industries could be destroyed.

"All in all, we have to be prepared to live with a relatively difficult situation for another one or two years," he said. "The market situation will probably not improve before the beginning of 1989. Cod block prices will remain at the current level for the time being and probably increase slightly in the course of 1989 to possibly $1.30-$1.40. A more rapid increase to over $1.50 would probably provoke renewed price resistance." That is because fish has to compete with cheaper sources of protein, especially chicken.

It was such price resistance, not a renewed abundance of cod, that broke the market last year. Long John Silver's, a major U.S. seafood restaurant chain, announce in the fall of 1987 that it was going to "introduce alternative species" to its menus in order to "lessen dependence upon North Atlantic cod." Further processors, trying to pass along increased block prices to consumers, wouldn't see the handwriting on the wall until the market collapsed -- leading to a 10% decrease in cod consumption in both the U.S. and Europe.

Yet at the same time, cod resources are in trouble. Landings had seemed to be recovering after 1985, which saw a record low of just over 300,000 tons. But recently, "the state of the cod stock proved to be in a much worse condition than previously anticipated," Erkins said. "The presumably strong 1983-85 year classes showed to be much weaker and also the growth of the fish much slower than one had previously believed." Projections for Norwegian-Arctic cod had to be downgraded twice in 1987 and 1988. "Altogether it is now expected that the overall biomass of cod in the Northeast Atlantic is only about one third of the prognosis of just one year ago."

Why? Apparently something is interrupting the normal feeding pattern of cod. Maybe it's the seal invasion off the Norwegian coast, driving the cod to deeper waters; maybe it's overfishing of capelin and herring for many years. To make matters worse, "the older and sexually mature part of the stock is relatively small, both as this age group was fairly weak from the start, and also because it has been seriously overtaxed. Who was it that said, `I have met the enemy and he is us'?" (Editor's note: it was comic strip character Pogo.)

If the fishing industry is going to recover, Erkins warned, it "has a lot to learn about fisheries management and restraint." Lack of knowledge about how the various fish and shellfish species interact is hurting management efforts. The industry must also deal more seriously with the threat of ocean pollution, improve the quality of its finished products and understand the market better.

Thai Frozen Shrimp Exports Valued at US$ 125 Million

Thailand's exports of frozen shrimp were worth US$ 125 million during the first six months of 1988, according to an announcement from the nation's Department of Fisheries. Shrimp was the top foreign exchange earner among marine products, which all totaled netted the country almost $500 million during the same period. Cumulative fishery sales abroad -- chiefly to Japan, the USA, Canada and European countries -- was forecast to reach #1.6 billion by year's end.

Here is a breakout of other seafood exports from January-June, 1988: frozen squid, $61 million; fresh fish, $50 million; canned marine products, $260 million.
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Title Annotation:cod and other North Atlantic fish
Publication:Quick Frozen Foods International
Date:Jan 1, 1989
Words:939
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