World Market Situation for Atlantic Cod

All the way back to the Middle ages, cod has been an important food item and commodity. In the prime years of the 1950s and 1960s enormous catches were seen all over the world, especially in the North Atlantic and the Baltic Sea, until the collapse of some of the stocks put an end to the adventure in the 1980s and 1990s. Today, catches and quotas are on the rise again, while prices have been on a downward slide. In this article, the current market situation for cod will be described and we will seek to differentiate the different stocks from each other.

Less than 2% comes from Greenland

Today, the largest players in the Atlantic cod fishery are Norway, Russia and Iceland. The three nations constitute more than 80% of the yearly catches, more than 1.000.000 tons, while the remaining 15-20% are divided between around 20 different countries, the Faroe Islands and the US being two of the largest. In 2012, catches from Greenland constituted app. 1% or 10.500 tons of the total catch of Atlantic cod.

The largest markets for cod are currently Portugal (salted), the US (frozen and fresh fillets) and the UK (frozen fillets).  A bit more than half goes to retail and the rest is divided between foodservice and industry sales.

Size matters

Quite a large portion, about 1/3 of the total Atlantic cod catch, is used for fillets/blocks, the rest being divided between headed and gutted, fresh and salted/dried cod. However, in the future it may be a challenge to get enough raw materials to cover the demand for frozen fillets. The average size of the cod caught by the large Norwegian and Russian fisheries in the Barents Sea is currently 4 kg and rising. Nevertheless, the main filleting facilities in China are geared for small cod of 1-2 kg, which is also the preferred size of frozen cod fillets used in the European foodservice markets. The Greenlandic cod is generally smaller in size, 1 to 2 kg, and the locally produced fillets from Paamiut  fits well into the void left in the market from the Barents Sea cod.

Stable price development after rollercoaster years

In general, cod prices have been low for the last years due to a surplus of available cod, due to higher quotas and less demand from Portugal, Spain and Italy. Since 2010, the market price (raw material price for headed, gutted cod delivered in China) has varied between 2.10 EUR/kg up to 2.90 EUR/kg. In 2013, prices have been stable just below 2.10 EUR/kg and the prognosis for 2014 is stable at the same level. The current low prices have caused a degree of substitution of haddock with cod in the UK market, as haddock prices have risen with around 1 EUR/kg in 2013, due to lower supply. This substitution is especially prevalent in the foodservice business, but the trend is also starting to show up in retail.

Royal Greenland's position in the global cod market

At Royal Greenland, we offer both cod purchased on the world market and from our own Greenlandic fishery. About 1/3 of the total RG cod sale is from Greenlandic raw materials. The product assortment consists of both an off shore trawl fishery producing Frozen at Sea from FAO27, the Barents Sea, and a unique inshore trap- and line catch – read more about the Greenlandic inshore fishery . The Greenlandic cod only constitutes around 1% of the world market, however, the catching method using trap fishing, handling each fish by hand, compared to the normal off shore industrial trawl fishery, gives it potential for growth.

Origin and storytelling as a selling point

As a whole, the cod market is perceived as being quite uniform and in that sense cod has become a commodity. However, there are possibilities for positioning stocks, catching and production methods from each other – e.g. Barents Sea vs. Pacific cod, trawl vs. trap catch, Frozen at Sea vs. single frozen vs. double frozen – thus making it possible also for the restaurateur/retailer/consumer to stand out from the crowd. An example, which offers opportunity for differentiation, could be the Greenlandic cod, which is unique in terms of catching method, origin and processing.