Tom Seaman, editorial director of Undercurrent News, brings you a roundup of the main stories from the previous week. 

The spread of the coronavirus in China and overseas and its impact on seafood is still dominating the most-read stories on Undercurrent News, with four of the top ten on the subject. 

The most-read was a scoop from Maria Feijoo, who revealed China's sharp reduction in shrimp purchases due to the outbreak is causing serious trouble for Ecuadorian farmers. 

"The future of the Ecuadorian shrimp market is now more uncertain than ever. With such low prices, if China doesn’t reactivate the market soon it certainly will become a great catastrophe for Ecuador. And, sincerely, the situation is not likely to change in the short-term," one source said. 

Empacadora del Pacifico's export manager Marcelo Velez said March is expected to be "a tough month" for the firm. However, he also revealed to Maria the Chinese shrimp market was reactivated this past weekend and that some packers are now able to sell their products to the Asian country.

"It surely will take some time until the situation is back to normal. Although prices will still remain low until this happens, March might not be as hard as we thought it if the demand gradually increases as we saw it did last weekend," he said. 

Click here for the full story. 

‘New sheriff in town’ for Russian salmon imports

Five from the Undercurrent team worked on a story on the fascinating situation in the Russian salmon sector, where a meat distributor that has seemingly only dabbled in seafood before has rapidly become one of -- if not the -- largest importers. This has also coincided with a series a red-listings for suppliers from Chile and the Faroe Islands. 

I started to report the story during the China show last November, enlisting Matilde Mereghetti to help in the past few weeks. Our chief operating officer, Jan Lepetun, who is from Ukraine and speaks Russian, also helped with the reporting. Then, Louis Harkell and Maria took care of the data used in the story. 

Meat specialist Unifrost emerged as the number one importer of salmon into Russia in November and December last year, as Chilean firm Empresas AquaChile, which is owned by conglomerate Agrosuper, has consolidated its position as the main supplier to the country.

The Unifrost-Agrosuper relationship is being billed as the new center of power in the Russian salmon sector. During 2018, Russia imported around 70,000 metric tons of fresh and frozen salmon, worth over $500 million, according to the latest available data from the International Trade Commission.

In recent months, Rosselkhoznadzor, Russia’s veterinary service, has placed plants owned by suppliers such as Bakkafrost, Cermaq Group and Mowi on its red "temporary restrictions" list, prohibiting them from supplying Russian firms. The reasons given by Rosselkhoznadzor range from the discovery of oxytetracycline, an antibiotic, to cadmium and crystal violet in salmon from the offending companies. 

Rosselkhoznadzor has also blocked Norwegian salmon coming in via Belarus, a route said to account for around 10,000t of imports. Sources are forecasting a rise in already firm prices in the market, with the red listing of many frozen suppliers from Chile and the main fresh player, Faroe Islands-based Bakkafrost. 

"There's a new sheriff in town," one salmon sector executive, asking not to be quoted by name, told me. 

Click here for the full story. 

FAO: Coronavirus outbreak overshadows shrimp market outlook for 2020

The global shrimp outlook for 2020 has been overshadowed by the outbreak of coronavirus in China, the Food and Aquaculture Organization of the United Nations (FAO) said in a new report which Matilde wrote up. 

Due to the coronavirus outbreak in China, less shrimp than normal was consumed during the Chinese New Year celebrations, and the forecast is for a depressed market in the coming months, FAO said in its report.

In preparation for the Lunar New Year celebrations in January 2020, shrimp imports in China were high during the last three months of 2019, while annual imports surpassed 700,000t, according to the FAO.

However, following the coronavirus outbreak, Chinese authorities instructed families to reduce outdoor activities, which resulted in drastic sales declines in restaurants and hotels and transformed cities across China into ghost towns.

Reportedly, current inventories of unsold shrimp are high in the Chinese market and there is no sign of these levels declining in the near future, the FAO said.

Click here for the full story. 

Blue Harvest completes deal for Rafael groundfish vessels, includes a few surprises

Blue Harvest Fisheries has finalized its acquisition of 12 groundfish vessels and 27 related permits from Carlos Rafael, but not without a few surprises. 

The company won't be paying the originally agreed $19.3m, and the boats are being moved into a different New England groundfish sector, revealed Jason Huffman, who has been all over this story. 

The large New Bedford, Massachusetts-based scallop and groundfish supplier announced the conclusion of its negotiations with Rafael last Thursday, nearly three months after we first broke the news about the agreement and five months after we first reported the company's interest in the vessels.

Blue Harvest said in a press release that the move "ensures a major portion of the groundfish fishery remains in the Port of New Bedford, with vessels docked in New Bedford and crewed by local fishermen".

Click here for the full story. 

Giant squid regulator takes steps toward sustainability

The Commission of the South Pacific Regional Fisheries Management Organization (SPRFMO) has approved measures to improve the management and conservation of giant squid in international waters at a meeting held earlier this month in the Pacific island-state of Vanuatu.

The approved measures include requirements to report monthly catches, install vessel monitoring system equipment, incorporate giant squid fishing vessels to a vessel registry known as SP/ROP, and increase observer coverage. However, no measures were agreed upon to limit fishing effort.

The president of the Committee for the Sustainable Management of the Giant Squid (CALAMASUR), Alfonso Miranda Eyzaguirre, who participated in the meeting in Vanuatu, welcomed the measure.

Miranda said that CALAMASUR has been proposing "this measure" since the SPRFMO's last meeting held in Havana, Cuba.

Click here for the full story. 

Analyst forecasts farmed shrimp supply glut, lower demand in China

Global shrimp prices could face pressure over the next few months as global trade adjusts to the changing demand dynamics in China, according to Pavethra Ponniah, vice president and sector head with Indian investment bank ICRA.

"The reactionary unprecedented massive shutdown in China will lead to contraction in Chinese demand for seafood, leading to a supply glut in the global market," she wrote in a recent report.

"Apart from the reduced demand, disruption in China’s internal logistics: for unloading, storing and further processing, will play havoc with all types of seafoods, impact of which will be felt along the entire value chain, leading up to the farmers. Port clearance for seafood containers in Chinese ports would be difficult in the current environment, effectively cutting off the supply pipeline temporarily.”

This goes against the more optimistic view held by some other market commenters, who have suggested that once the viral outbreak dies down, demand for imported protein -- especially seafood -- should bounce back stronger.

Looking at the impact for India specifically, Indian shrimp exports reached 670,000t in calendar year 2019. 

Click here for the full story. 

Canada’s Canfisco adds to Alaska operations with E&E investment

Canadian Fishing Company (Canfisco) has made an investment in US salmon, black cod and halibut processor E&E Foods, an executive with the latter confirmed to me. 

Canfisco -- which is part of the sprawling $10 billion turnover Jim Pattison Group, Canada’s second-largest private company -- and E&E have a "strategic alliance on the production side in Bristol Bay", Tab Goto, the latter’s chairman, told Undercurrent.

Goto declined to comment on the size of the stake Canfisco bought. He declined to speak further on the deal or the possibility Canfisco might buy more in E&E, which acquired Cannon Fish Company last year.

It's understood Goto and Randy Patrick, E&E's president, two Alaska seafood sector veterans, will stay on after the investment, however. 

Canfisco's move for E&E comes as Maruha Nichiro is selling Peter Pan Seafoods and Cooke, Ocean Beauty and North Pacific Seafoods, owned by Marubeni, are said to be looking at merging their Alaska salmon operations. 

Click here for the full story. 

Russian H&G pollock prices dive as coronavirus delays China processing re-start

The prices for headed and gutted (H&G) pollock are dropping rapidly, with China plants struggling to get up to capacity again due to the impact of coronavirus on the workforce, sources told me. 

Plants are having to put workers in a 14-day quarantine, meaning capacity is down and prices of pollock H&G -- a key raw material -- are falling. 

Multiple sources gave the current spot market level for H&G in the 25-centimeter-plus size preferred by Chinese processors as $1,300-$1,350t. This is down from $1,420-$1,520/t at the end of January. At the end of last year, the price had hit $1,700/t, on small sales volumes, so some $450-$500/t higher than the spot current level.

“Big Russian companies are looking at other options, like selling H&G into Africa,” one whitefish sector veteran told me. They have also been diverting more H&G into the Russian domestic market, sources said.

“It [the H&G price] could fall more,” said a source with a Chinese processor, who asked not to be named.

However, a Russian sales executive, who confirmed the current spot level, said the market could soon normalize. “I’m optimistic. The quarantine period is going to be over next week. Then, plants should be back to almost full capacity and orders on double-frozen blocks will start.”

Click here for the full story. 

Cooke eyes deal for fast-growing Argentinian shrimp firm with Spanish plant

Acquisitive Canadian seafood giant Cooke is eyeing a deal for Grupo Cabo Virgenes, an Argentina-based fishing and processing firm with a plant in Spain, Alimarket first reported. I then confirmed the talks from my sources. 

Cooke is looking at buying all Cabo Virgenes' assets, which include nine vessels and a plant in Argentina, and the value-added factory in Spain, but the talks are in the early stages and a deal is not imminent. Cooke is already operating in Spain, with seabass and seabream farmer Culmarex.

If a deal for Cabo Virgenes -- founded by Eduardo del Rio in 2008 -- does go through, it would add over $70m in sales to Cooke's, which are around $2bn. For its latest reported financial year, for the 12 months to June 30, 2018, Cabo Virgenes reported sales of $74.6m, up 35% year-on-year, with a volume of 13,000t, reports Alimarket. 

The Spanish subsidiary contributed €42.6m, up 39.5% y-o-y, with a market volume of 5,757t. Sales in Spain would have fallen by around 8% in 2019, due to the drop in shrimp prices. The company is mainly selling in wholesale, but is also in retailers like Carrefour, Alcampo and Consum, among other chains, the news site said.

Cabo Virgenes' plant in Palencia, Spain was opened in 2017, after an investment of €4m. It's focused on value-added products, with a capacity to produce cooked, peeled, deveined, easy-peel and tail-on shrimp in various types of packaging.

The plant is currently being expanded with €2.5m being invested, according to Alimarket. The plan is to take the company's freezing capacity from 1,200t to 5,000t.

Click here for the full story. 

RSPCA defends involvement in Scottish salmon farming

The UK's Royal Society for the Prevention of Cruelty to Animals (RSPCA) has defended its involvement in the salmon farming industry following recent criticism of the sector, noting that by working with aquaculture it had been able to do far more than if it had turned away.

"As an animal welfare charity, the RSPCA is duty-bound to help improve the welfare of all animals and that includes salmon," it wrote.

"That's why we haven't stepped back and have instead chosen to proactively work with the aquaculture industry to find ways to help improve the welfare of farmed salmon."

Earlier this month, Lynne Sneddon, director of biovetinary science from the UK's University of Liverpool questioned the organization's support for the salmon aquaculture industry, which they described as normalizing "heavy-duty suffering".

Click here for the full story. 

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