Pollock could see big price increases as supplies drop amidst high demand

Experts are predicting a sharp rise in the price of pollock in 2022, with expected strong demand hitting up against supply chain complications and a smaller global harvest.

The global pollock supply is facing its first “meaningful” reduction in supply since around 2008, according to a panel at the National Fisheries Institute's 2022 Global Seafood Market Conference, which took place 18 to 20 January. Globally, the pollock catch total will decline from 3.49 million metric tons (MT) to 3.22 million MT in 2022, according to the panel. In the U.S., the total allowable catch for Alaska pollock has been set at 1.24 million MT, down 189,000 MT from 2021.

That decrease in catch was previously foreshadowed by stock assessments, with the U.S. North Pacific Fishery Management Council Scientific and Statistical Committee recommending an acceptable biological catch of 1.111 million MT in late 2021.

Russia, too, has decreased its total allowable catch for pollock in 2022, with the Russian Ministry for Agriculture announcing in late 2021 the catch would be 1.927 million MT, a decrease from 1.996 million MT in 2021.

The decreases are the first change in what Ron Rogness of the Genuine Alaska Pollock Producers called “very stable” production from 2016 to 2021.

“We’ve got a 270,000 MT decline in harvests expected in 2022. It’s the first time we’ve seen that since 2008 to 2010,” Rogness said.

The difference between the latest decrease and the one that occurred over a decade ago is the increase in demand for the product.

“This decrease, unlike what we saw in 2008 to 2010, is in the face of extraordinarily high demand,” Rogness said. “What’s going to happen to pricing is anyone’s guess, but I think we all have a feeling that it’s going to be record levels.”

Data for certain products are already showing record pricing significantly above previous highs. Prices for four- to six-ounce IQF fillets had been extremely stable for several years, sitting solidly at USD 1.40 (EUR 1.24) from March 2014 to late 2018, when they began to slowly increase. Prices for that same product nearly doubled to USD 2.70 (EUR 2.39) in late 2021.

Rogness said the price increase isn’t reflected in the block price for products, but that the price of blocks typically follows behind that of fillets.

“There’s going to be a lag ... But really for Alaska pollock, you go back to 2017 [and] prices are up about 40 percent,” he said.

Part of that increase in prices may or may not be attributable to changes in product-types on offer. In 2021, production of pin-bone-out (PBO) fillets decreased, while production of surimi increased, according to data from GAPP.

Through 13 November, 2021, 193,688 MT of surimi had been produced in the U.S., an increase of 16,547 MT over 2020. Meanwhile, production of PBO fillets decreased by 12,655 MT from 102,339 MT to 89,684 MT.

“You can see there was a significant shift from pin-bone-out fillets to surimi,” Rogness said.

Overall, the total exports of Alaska pollock fillets from the U.S. has dropped significantly since 2019. In 2019, the U.S. exported over 130,000 MT of pollock fillets, with an average price of USD 3,021 (EUR 2,680). That amount dropped to 104,770 MT in 2020, and dropped further still in 2021 to 92,733 MT. The decreases coincided with further price hikes, with fillets fetching an average price of USD 3,179 (EUR 2,820) per MT in 2020 and USD 3,232 (EUR 2,867) per MT in 2021

Pollock prices in the European Union also rose between 2018 and 2020. Throughout 2020 and into 2021, prices for pollock of U.S. and Russian origin rose to above EUR 3,000 (USD 3,380) per MT, and has stayed relatively stable at that amount. At the same time, imports of pollock of Russian origin into the E.U. surpassed those of U.S. origin in early 2021.  

“For the first time in my memory, we saw imports of Russian product over that period exceeding imports of U.S. product,” Rogness said.

Between 2020 and 2021, prices for imported pollock of Russian origin actually decreased on average from EUR 3,048 (USD 3,435) per MT to EUR 2,979 (USD 3,357) per MT. That decrease in price coincided with an increase in volume of 13,657 MT – from 30,881 MT in 2020 to 44,538 MT in 2021 – an increase of 44 percent.

Russia has been facing a dilemma in its pollock fleet ever since tightening restrictions in China led to Russian companies having increased difficulty exporting to its largest customer. The restrictions caused trade volume with China to decrease by 83 percent in volume in the first half of 2021 compared to 2020, and resulted in South Korea becoming the top importer of Russian seafood.

Meanwhile, pollock exports from Russia to France, Portugal, Poland, Spain, and Germany all increased compared to 2020 – which likely contributed to the jump in E.U. imports reflected in the statistics.  

Photo courtesy of NOAA