Can mackerel FOB price descent cover the growth of the freight?

China mackerel is less competitive over the rocket high freight?

The catching of mackerel in FAO 61 starts in August. This year’s catching volume is much better than last season. Mackerel is one of the most extensively consumed fish varieties all around the world. Consuming this fish offers a wide range of health benefits because it is packed with omega-3 fatty acids and many proteins. The price of mackerel has increased from 2019 and 2020. However, the China FOB price decreases a lot because of the high freight cost in 2021. But according to the high demand from the canning industry, the mackerel, especially the small size, is in huge demand. Why does the China FOB price decrease? And what the market trend will be in Q4? Ocean Treasure will do a short review.

The main source of mackerel is from these countries: China, Norway, and Japan. The premium catch period is from September to November.

The main size for the new catch season is 100-200; this size is mainly for reprocessing with flaps and HGT. Because in this summer season, the water is 5 degrees higher than usual, making the mackerel easy to break belly. As a result, that will affect the grade of the product. Soft mackerel may cost more for the canned factory to process and will also descend the canned products’ presentation. So, in the new catching season, the HGT FOB price has decreased a lot by nearly 8.5%.

usually, when the new season comes, if the catching is sufficient, the price will decrease a bit. In this year’s condition, there is another reason for the FOB price descent. Another reason is the freight cost. Since the freight cost from China is exceptionally high, which makes the mackerel from China less competitive. The new FOB from China is much lower than last year to order to compete with the other mackerel supply market price. 

For the raw material situation, the size in September is mainly 200-300, and at the end of September, the size can grow to 300-500 and 500+. Meanwhile, as Autumn comes, the water temperature is cooler and better for mackerel catch. The quality of the mackerel will be better after the end of September.

For the market demand, usually, the mackerel demand is from the Asia market. However, as the canning food demand increasing in the EU market, the market expanded a lot in EU market.

As the quality of the mackerel is getting better, the price of mackerel will increase for the market. Once the high-quality mackerel arrives, the price will be close to or even more than in early January this year. The peak purchasing period of mackerel is in October and November. At that time, the price will increase as demand changes. These demands are mostly from canned factory areas like Poland, Russia, and China. Since in these areas, the canned factories are so popular there. So it seems the price level now is the best of the whole season because of the sufficient raw materials.

Freight cost will be a vital issue for this cheap price fish. If the freight keeps increasing, the china mackerel will be less competitive. To get more orders, the FOB price must have to decrease again. However, if the freight cost in Norway and Japan also increases, then the mackerel from china will be an advantage. So everything about mackerel is up to the freight cost. So will China mackerel be less competitive over the rocket high freight?

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