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Price-setting for A Season Surimi to Start at the End of April

April 9, 2008

The pricing of A season surimi has become the focus of discussion in the industry, now that the A season for pollock fishing in the USA has ended. Negotiations to set the price of surimi will start after free price-setting at the European Seafood Exposition in Brussels, which will run from April 22 to 24.

Supply to Japan Expected to Drop by 45% to 22,500 Tons

In light of a year-on-year decrease of 45% in surimi production during the A season, the total production being 50,000 tons, the quantity of A season surimi for supply to Japan will be 22,500 tons (as compared to 36,000 tons for the same period last year).

This represents a supply shortage of 13,500 tons, and presumably, to maintain balance between supply and demand, manufacturers of surimi products will have to think carefully and ingeniously about how to use the surimi raw material in their product manufacturing.

Last year’s B season import buy-in prices of surimi increased by 40 yen per kilo in every class, the price being 420 yen for SA class, 380 yen for FA, 360 yen for A, and 290 yen for KA. Retail prices were increased by 50 yen for bulk users and 70 yen for small-volume purchases.

Argentina, Hake and Signs of Recovery in South East Asia

It is hoped that the following developments will make up the shortage caused by the decrease in surimi production in the USA. First, the Centurion of Aker Seafoods in Argentina, a vessel which reduced its production last year, has resumed operations this month and is satisfactorily producing surimi. Moreover, the hake quota in the USA has been increased by 24,000 tons over last year’s quota to 269,000 tons. Furthermore, a recovery is expected over last year in surimi production in South East Asia, which was slow last year due to unusual weather.

Curbing Demand to Keep Surimi Prices Under Control

“I think a substantial price increase will be unavoidable in the surimi price-setting after the European Seafood Exposition in Brussels. We won’t have any choice but to accept the price increase of the A season, but acceptance thresholds have already been exceeded in the Japanese surimi products industry, and if every possible effort is not made to prevent an increase in prices after this year’s B season, the industry will be in a critical state and in danger of disappearing.

Fortunately, hake quotas are being increased, and if hake surimi is supplied to American surimi manufacturers, or to Korea, demand for B season pollock surimi will lessen, and that, I believe, will take the pressure off B season demand and prices.

I think that Japanese manufacturers of surimi products need to make efforts to keep surimi prices from reaching abnormal heights, such as increasing their production of non-surimi products and curbing demand for surimi. Moreover, to survive, the manufacturers need to quickly pass on the A season surimi prices to their products to secure profits,” said one major dealer.

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