Chinese buyers of Russian Alaska Pollock are reportedly back in the import market, after a prolonged absence due to the spread of coronavirus. Chinese processors were reportedly operating at around 80% of capacity by late March with some plants claiming to be back running at full capacity, although this cannot be verified. However, the return of China to the seaborne market should provide some price impetus after average export prices fell 5% month-on-month (m-o-m) in March. Indeed, the March average export price RUB132,625/t (US$1,698/t) was 3% lower year-on-year (y-o-y) and expected to slide further without a demand pick-up. Thus, the return of China to the market will be welcomed by Russia.
Russia is a major exporter of headed and gutted (H&G) pollock to China, where it is processed and sold on as finished product to consumers in Europe and the US. The fact that China entered national lockdown two months before western hemisphere markets, created a gap in the market that may have supported robust exports from Russia. However, Russia’s strained relationship with the west meant that the supply gap remained unfilled. The pandemic spread to the west has now dampened import demand and closed a window of opportunity. Given that Europe and the US remain closed as major seaborne markets, a higher pollock price may squeeze Chinese processors on costs when finished product demand is unclear. Thus, in the absence of finished market demand, any potential upturn in pollock prices may be short-lived if Chinese processors decide it is better to delay purchases.