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Excess inventory, high prices weigh on Pacific cod market

Producers are seeing the unusual conflation of higher-than-normal prices and a market sitting on high levels of A season carryover.

It's been another shaky year for the Alaska cod fishery despite a slight bump in the total allowable catch in 2019, executives in the sector told IntraFish.

Excess inventory from A season, unusually warm weather heading into B season, the China-US trade war and prices hovering above $2 (€1.79) per pound are dampening enthusiasm for the product, according to some suppliers.

Edmonds, Washington-based Tatoosh Seafoods President Tony Cadden told IntraFish there is a lack of interest in US Pacific cod from domestic customers right now due to these conflating factors.

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Cadden, who sells mostly fillets to retail and foodservice customers in the United States, said that's partly due to customers "stacking up" inventory during this year's A season, which ran from January to June.

Warmer-than-usual water temperatures are also negatively impacting the B season harvest, which started in June and runs through December, he said.

"We're fishing now but nothing has landed yet," he said of the company's two vessels operating in the Bering Sea.

Lou Luo, who heads operations at Seattle-based seafood supplier Chang International, told IntraFish his customers looking for headed and gutted (H&G) Pacific cod are rejecting the higher US prices, opting instead for Russian cod, which he said is cheaper and does not face the same trade war tariffs in China.

"We buy H&G mostly from Russia today," he said, which then is processed at his company's plant in China.

Buffalo, New York-based Arctic Fisheries President Michael Kotok told IntraFish he is also seeing Pacific cod moving a little slower at the retail level, also due to trade war tariffs and high prices.

Not all doom and gloom

Mela Meixner, president of commodity sales with Alaskan Leader Seafoods, told IntraFish despite the “doom and gloom” surrounding the cod market, her sales are strong, particularly in her largest markets of the US East Coast and the European Union.

“'The sky is falling' is not where I would say things are,” she said. “You have to look at the overall picture. We’re going to have a strong Christmas and Lent Season.”

Meixner said larger fish were caught during the A season, which has been good news for Alaskan Leader's fillet portions and value-added products. Given the larger sizes, Meixner noted there could, however, be shortages for small fish moving into B season.

Peter Trost, who works in cod sales for Seattle-based Aleutian Spray Fisheries, also is upbeat on the outlook. The B fishing season is slow for Aleutian Spray as well so far, but Trost expects it to pick up as the months progress.

Trost, who sells Pacific cod largely to domestic and European markets, also expects prices to soften to meet the market's needs.

"When cod gets too expensive, it gets replaced with other species. Now prices are coming around a bit and demand is going to pick up again," he told IntraFish.

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