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Norwegian cod rides a brief demand wave

December 1, 2020

1 mins read

The average catch price of Norwegian Atlantic cod increased by 5% quarter-on-quarter (q-o-q) for the three-months ending November 2020, to NOK 20.20/kg. At NOK 21.17/kg, the average catch price for November 2020 represented an eight-month high, notwithstanding relatively weak export demand. The November uptick was partly driven by temporary supply bottlenecks in the North Atlantic sea, where technical issues delayed Russian fleet landings. Norwegian suppliers capitalized on the shortfall by raising prices.

More fundamental drivers are also evident in the recent cod price movements. The average catch price plunged by 26% between January and June, to NOK 18.84/kg, as the COVID-19 pandemic escalated. Cod demand is heavily dependent on out-of-home consumption – in particular from restaurants and hotels – and widespread lockdowns initially weighed heavily on buying sentiment. However, consumer appetites appeared to shift from Q3 2020 onwards, which may be attributed to the increased availability of fresh, packaged and ready-to-eat whitefish varieties in high-street supermarkets and grocery chains. Stay-at-home chefs appeared more willing to bring the restaurant experience to household dining rooms, while easing lockdown restrictions across much of Europe supported a tentative bounce in foodservice demand.

Mintec expects softer cod prices to prevail during the remainder of Q4 2020 and through Q1 2021. The International Council for the Exploration of the Sea (ICES) proposes a 20% increase in the total allowable catch (TAC) cod quota for Norwegian and Russian fleets in 2021. A supply increase of this magnitude would present substantial downside price risk against a buoyant economic climate. This weak price potential becomes magnified in an uncertain and depressed market, underlining the bearish view.Slide1-Dec-01-2020-12-17-45-30-PM

 

Topics: Fish & Seafood
Ibi Idoniboye
Ibi Idoniboye

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