(SEAFOOD.COM NEWS by John Sackton) March 11, 2013 — The 2013 International Boston Seafood show opened to good crowds and a very busy floor – but underneath the activity was a serious standoff between many buyers and sellers.
Prices for many major commodities – such as shrimp, salmon, tilapia – are either going up rapidly, or at higher levels than they have been for the past several months. With shrimp in particular, replacement costs are very high and a shortage of product is expected during the first half of the year.
At the same time, weakness in the foodservice sector – partly reflected in terrible numbers for January and February, is making foodservice buyers extremely wary of accepting any price increases.
Unlike two years ago, when product shortages and light inventories brought a surge of buying interest, this year the prospect of product shortages or unavailability is producing a yawn. Many buyers want to just wait and see what will develop.
At the same time, no seller is in a hurry to make deals at this point, because the risk is just too great.
As one importer told me, “if this was a temporary situation, we could suck it up and help out our customers. But we don’t know if the shortage and high prices will last for a few months or continue all year, and we can’t take the risk.”
Retail continues to fare a little better with good promotional opportunities. One indicator of the influence of retail is the strong push at the show to market more branded products and for companies to introduce new shelf packaging for both frozen and chilled products.
Branding will become more important, while the MSC becomes less so. One feature of the show has been the renewed push by a number of regional US seafood marketers to promote their regional brands.
Obviously Alaska is the most experienced at this, with ASMI’s long history of industry funding, some government funding, and global promotion of Alaska seafood. At the ASMI board meeting yesterday, speakers confirmed that about 80% of the Alaska salmon production will be under the RFM certification scheme this season, instead of MSC.
Even more salmon harvesters have signed on to the United Fishermen of Alaska pledge to support the RFM approach and protect Alaska’s Brand. One of the latest signers was Seafood Producers Coop, representing over 500 salmon harvesters, and virtually 100% of the troll caught salmon.
Nevertheless, ASMI is getting a lot of push back from NGO’s and some retailers over the issue.
One salmon seller said that of his four main customers in Europe 3 said they had no issue, but one was adamant that their corporate policy required only MSC. This pattern appears common where the majority of European retail customers are happy to move to the new certification; but a few are resisting.
During the meetings surrounding the show, there was little new news on the Countervailing duty suit, according to members who attended the NFI meeting on the subject. Most of the lawyers working for the various importing countries believe that in most cases minimal or no duties will be assigned. For India, for example, which has emerged as a very important supplier to the US, the de minimus duty is 3% and many expect that to be the likely range if any duty is imposed. Such a duty, while inconvenient, would not change shrimp market dynamics in a world where the price has jumped 20% in two months.
Regarding Thailand, it is still to early to know about how severe EMS will be this year, but signals apparently are mixed.
The Westin at times seemed like the NGO-Westin given the number and intensity of NGO meetings here in conjunction with the show. At the salmon meeting held by SFP, it was suggested that major buyers want to see 70% of wild salmon eventually under some type of plan, and that the major push to bring Russian salmon under the MSC would continue.
WWF, which has a partnership with Sysco among many other major players, continues to push for MSC products.
However at an Ocean Trust Science seminar held just prior to the show, one speaker said that “seafood sustainability” as a google search peaked in 2005, and has been going down since then. This can be a proxy for how an idea is trending, and we will have a fuller report on this later in the week.
From where I sit, I see the next push being on developing and strengthening individual and regional seafood brands, which do not want to get eclipsed by an all-encompassing MSC blue label. As a result, despite fierce pushback from WWF, there will be growing attempts to rationalize the sustainability label issue. GSSI will be giving their progress report later today.
This article was originally published on Seafood.com news, a subscription site, and has been reprinted with permission.