Nutaaq® Cod Season Highlights of 2016

The market for cold water prawns has experienced a rollercoaster of highs and lows in recent years, with prices and availability fluctuating. Prices have now peaked and settled at a level slightly lower than the previous year, but supply remains unpredictable. Royal Greenland, a key player in the market, has taken measures to stabilize the market for 2017. In the early parts of 2016, the market was in a state of suspense due to high prices and uncertainty about future supply and quotas. This led to a cautious approach among buyers, resulting in a slight drop in prices and an accumulation of small prawn stocks by producers – larger sizes remained scarce. As a result, some retailers began to include small prawns in their product range as a replacement for larger ones throughout the year. Traditionally, small prawns were sold to industrial customers, but as they began to be sold more in retail, there was no longer enough to meet demand. Furthermore, the price of small prawns had increased to a point where industrial producers of items like sandwiches and salads could no longer meet their price points and began substituting with other proteins such as surimi, warm water prawns, and seabob shrimp. Despite a more stable overall supply of cold water prawns, some industrial producers are still hesitant to return to them due to the perceived ongoing volatility of prices. Throughout 2016, it became evident that the market's challenges regarding size composition were not only due to demand for large/small prawns but also reflected the current catch composition. Although catches are generally up (in Greenland), the size composition was not entirely as expected, with sizes being slightly smaller than anticipated. The reason for the changes in the size composition of the catch remains a mystery to both fishermen and biologists. There also appear to be other changes in the seasonality and general lifecycle of North Atlantic prawns. Henrik Thune Cordsen, Category Manager for prawns at Royal Greenland, states: "Traditionally, we have sold a lot of prawns with orange heads [due to roe] in China for the Chinese New Year, as they are a great delicacy there. However, the catching season for orange-head prawns has now moved slightly and to some degree takes place after the New Year celebration. The shell-changing season has also moved a bit and we are abandoning traditional fishing areas and finding new ones further north." It is unclear whether the prawns are disappearing from the well-known fishing areas or just relocating and why. It is important to note that while the stocks seem to be moving, the biomass remains stable and strong. Biologists speculate that the changes can be caused by climate change and advancement of other species influencing the prawn stock, e.g. cod whose favorite prey is prawns. In order to maintain the stock under sustainable management, both producers and customers must adapt to these biological changes, both in the way we fish for prawns and in the way they are processed, marketed, and used in kitchens. As one of the world's largest producers of cold water prawns, we at Royal Greenland recognize our responsibility to help stabilize the market in terms of supply, sustainability, and pricing. We strive to fulfill this responsibility through careful processing with respect for the raw material and allocating product to our regular customers at a price reflecting the level of quality. This way, a limited resource is utilized to the fullest. Greenlandic biologists from the Institute of Natural Resources have recently published their advice for the prawn fishery in 2017. On their website (natur.gl) the Institute of Natural Resources states "[…] data from the fishery shows stable catch rates and biological research shows that the amount of prawns is around the average level of the last 5 years. At the same time, there are fewer cod eating the prawns". Based on this advice, The Government has set the 2017 quota for West Greenland at 90,000 T. Slightly higher than in 2016, but a new fishing area in Northern Greenland, which previously only had a trial quota, has been included in the overall quota. In Canada, the quota was drastically reduced by 42% in 2016 due to some disturbing data collected on the stock by biologists. In 2017, quotas are expected to be set at the same level or even lower. With regards to pricing, Greenlandic prawns are usually valued a little bit higher than Canadian, as Greenlandic prawns are less sensitive to seasonal fluctuations and supply is thus more stable.