The gap between FAS an H&G widening

Freezer trawlers have been making a better profit producing headed and gutted (H&G) cod compared to frozen-at-sea (FAS) fillets, but the market on the latter is likely to get tighter as the year goes on, said an executive with the world’s largest supplier according to

“There’s currently quite a gap between H&G and frozen at sea fillets. So, currently people are working at a greater profit on producing H&G,” said Sturlaugur Haraldsson, now managing director of the European and US divisions of Russian fishing and processing group Norebo Holding, the world’s largest supplier of cod and haddock H&G and FAS fillets.

“But, I think later in the year, I would expect this gap to narrow, so I can see the FAS fillets increasing as we go further into the year,” he told Undercurrent News.

“My reasoning for this is that, if you look at the fillets, we saw obviously a 13% reduction in quota this year, and in addition to that, you have seen some producers moving a bit from fillets over to H&G, so they are producing slightly more H&G and fewer fillets than last year, for example,” he said.

“So the reduction in the volume of fillets, this year, will be more than 13%. There will be a significantly greater reduction in fillet production than the 13% cut. I mean, I can’t tell you exactly how much, but it will be significant. You can see Russian producers and Norwegian producers doing fewer fillets this year, and more H&G compared to last year,” he said.

As the year goes on, there will be fewer fillets available for the market, said Haraldsson.

However, Haraldsson qualified that, although the proportion of H&G production in the production mix this year is greater than last year, the absolute volume is probably not greater than last year, due to the lower quota.

Better catching

“The catching has been okay so far this year, and it’s looking like many vessels will finish their quota probably a bit earlier this year compared to last year — if everything goes to plan,” Haraldsson said.

“This year was off to a decent start in terms of catching, but the last few weeks have been more quiet. If the summer will be good, we should see most of the fleet finish earlier than last year. Overall, there will be a far lower volume of fillets, so as we go along, I think prices are gradually going to firm, and the gap will be reduced,” he said.

Haraldsson declined to comment on specific price levels for cod and haddock FAS fillets. Generally, haddock prices are up “significantly” and the cod price has been fairly stable, “we’ve not seen a big increase yet”, he told Undercurrent. “So this increase is still to come through. I believe this is going to happen soon.”

Last year, production on fillets was high, “so the market really hasn’t felt this reduction in volume yet, you won’t feel it until the second half of the year”, Haraldsson said. “Then you will see the increase in pressure. My feeling is that in the coming weeks, or if not the coming weeks then the coming months, this will come through.”

According to Undercurrent sources, prices for skinless, pin-bone-in (PBI) 5-8 ounce and 8-16oz FAS fillets are around £5-5.20 per kilogram, for delivery to the UK. For haddock 5-8 ounce and 8-16oz PBI, prices are around £5/kg, sources said.

These have increased between 5-10% this year, lower than the increase seen for H&G. Cod H&G, in the 1-2.5kg-benchmark size, is now being quoted at around $4,500/t (depending on the supplier, origin and delivery terms), having been around $4,000/t in January (See the Undercurrent prices portal for more), an increase of 12.5%. Haddock H&G has gone from around $3,100/t at the start of the year to $3,500-$3,600/t, an increase of between 13-16%.


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