Spend Matters welcomes this guest article by Michael Liberty of Mintec.
If you have ever watched Gordon Ramsey or Hell’s Kitchen, you will be familiar with scallops. In fact, they made up over half of US supermarket mollusk sales in the past 12 months – higher than the sales of oysters and clams combined. The market for the larger-sized Atlantic sea scallops, or giant scallops, are one of the most valuable to US fisheries. US sea scallop prices have fallen nearly 30% since November 2014 and the lowest level since September 2012.
The larger scallops are primarily caught along the Eastern seaboard in Massachusetts, Virginia and New Jersey. The price fall has been driven by a forecasted 40% year-over-year increase in total US scallop production to around 48 million pounds for the 2015 scallop season, which runs from March 2015 to 2016.
Although the US catches large volumes of scallops, the country is not self-sufficient; demand outstrips the national catch so imports tend to be required. Japan is the preferred exporter partner of the US, thanks mainly to its large scallop sizes.
Consequently, a price increase in Japan will increase the costs of US imports and could impact domestic prices. In the 2015 season, Japanese scallop production is expected to fall due to major storms in 2014 that damaged the ocean floor in the Sea of Okhotsk. Production in the Okhotsk Sea is forecast to fall to 219,000 tonnes, down 33% y-o-y.
With less supply from Japan and with fears of high catches of large scallops in the US tailing off, we might see the market dynamic change in the very near future.