Industry information

In response to the recent import ban on Japanese seafood by China, Japan Delica Co ., a leading seafood import and process company, is strategically expanding its operations to Bangladesh. The company is set to begin processing Japanese scallops in Bangladesh this October, specifically focusing on scallops sourced from Hokkaido and Aomori prefecture. This move aims to diversify export destinations, with the processed scallops being shipped to Europe, the United States, and other key markets.

Japanese scallops Strategic Expansion to Bangladesh

Japanese Delica, headquartered in Nishinomiya, Hyogo prefecture, is a subsidiary of Japanese Food service company. The decision to shift part of its processing operations to Bangladesh is a strategic response to the closure of the Chinese market, which was previously a significant destination for Japanese scallops. This marks the first instance of a Japanese company exporting scallops to Bangladesh for processing.

The company’s new facility, located in Cox’s Bazar, will begin operations in October with an initial workforce of 500 employees. This expansion builds on Japan Delica’s earlier venture into crab processing in Bangladesh, which began in 2018. The company aims to leverage Bangladesh’s growing seafood processing industry to maintain and grow its global market presence.

Hokkaido Scallops: A Premium Product in the Global Market

Hokkaido scallops are renowned for their premium quality and are a staple of Japan’s seafood exports. By expanding processing operations to Bangladesh, Japan Delica aims to maintain the high standards associated with Hokkaido scallops while accessing more cost-effective processing solutions. The processed scallops will be exported to high-demand markets such as Europe, the United States, Hong Kong, Taiwan, and Singapore.

The company plans to achieve an annual sales target of 8 billion yen within three years. With a monthly processing capacity of up to 1,000 tons of scallop shells, about 200 tons of scallop meat will be exported to these international markets.

Diversifying Export Destinations: Reducing Reliance on the Chinese Market

In the past, Japanese scallops were primarily exported to China, where they were shelled and consumed locally or further exported to the United States. However, with the loss of access to the Chinese market, Japan Delica and other Japanese companies are seeking to reduce their reliance on this single market. The Japanese government is actively supporting these efforts by encouraging companies to establish new processing plants in other countries, such as Vietnam and Mexico.

This strategic shift is not only a response to current market challenges but also an effort to secure the future of Japanese scallops in the global seafood market. By diversifying processing locations and export destinations, Japan Delica is positioning itself to better withstand market fluctuations and geopolitical risks.

The Future of Japanese Scallops in the Global Market

The expansion into Bangladesh is expected to significantly boost the global reach of Japanese scallops. With the new processing plant set to become fully operational in October, Japan Delica is poised to meet the growing international demand for high-quality scallops, particularly those from Hokkaido. This move also reflects broader industry trends as Japanese seafood companies adapt to changing market dynamics and explore new growth opportunities.

Japan Delica’s experience in Bangladesh, particularly in crab processing, provides a solid foundation for this new venture. The company is confident that the strategic location of the new plant and its capacity to process large volumes of scallops will play a crucial role in meeting its ambitious sales targets.

Strengthening Japan’s Seafood Export Industry

As Japan Delica embarks on this new chapter, the company’s efforts to process Japanese scallops in Bangladesh represent a significant milestone in the global seafood industry. This initiative not only addresses the immediate challenges posed by the Chinese import ban but also lays the groundwork for a more resilient and diversified export strategy. By tapping into the processing capabilities of Bangladesh and targeting high-demand markets in Europe, the United States, and beyond, Japan Delica is setting a new standard for the international seafood trade.

Current Scallop Market in the US

The 2024 scallop fishing season in the United States has witnessed significant price increases for Atlantic scallops, particularly for the largest U-10 specification, Placopecten magellanicus. These scallops, known for their size and quality, have seen a substantial rise in market value, reflecting a combination of slow supply and robust demand. This article delves into the dynamics of this surge, providing insights into how these trends are shaping the industry and the broader economic implications.

Price Trends for Different Scallop Sizes

Throughout the 2024 season, the scallop market has experienced notable price fluctuations across various sizes:

• U-10 scallops have reached an average price of $25.32 per pound by the 23rd week, marking a dramatic increase from $17.54 per pound at the beginning of the season—a rise of over 47%.
• U-12 scallops saw their prices climb to $22.98 per pound, reflecting a 27% increase within the same timeframe.
• Common 10-20 size scallops were priced at $14.51 per pound, with the premium for larger U-10 scallops widening to $10.81 per pound, highlighting the premium value placed on larger scallops due to their scarcity and high demand.

These trends illustrate a sharp increase in scallop prices across different specifications compared to the previous year, driven by various market factors.

Factors Influencing Scallop Prices

Several key factors have contributed to the surging prices of scallops:

• Supply Constraints: The supply of large U-10 scallops has been limited, accounting for only 2% of the catch this season. This scarcity has been a primary driver of the price increase.
• Strong Market Demand: Despite the limited supply, demand for scallops remains high. This demand is particularly strong in high-end markets where the quality and size of scallops are highly valued, pushing prices upward.

Market Share and Pricing of Medium and Smockr Sized Scallops

While large scallops have seen the most significant price increases, medium-sized (10-20 pieces) and smaller (20-30 pieces) scallops have also experienced price adjustments:

• Medium-Sized Scallop Pricing: Holding the largest market share, medium-sized scallops have seen steady price growth, indicative of a solid demand base.
• Smaller Scallop Pricing Trends: Smaller scallops priced at $13.17 per pound have shown a slight increase, demonstrating a balanced market even for less premium sizes.

Implications of Price Trends on the Seafood Industry

The rising prices of scallops are impacting various segments of the seafood industry:

• Consumers are facing higher retail prices, which may affect purchasing decisions and potentially lead to a shift towards more affordable seafood alternatives.
• Seafood Distributors and Restaurants are adjusting their buying and menu pricing strategies to cope with the increased costs, affecting profitability and menu offerings.

Outlook and Predictions for the Scallop Market

Based on the current data and market dynamics, predictions for the future of the scallop market include:

• Market Trends: The prices for scallops are expected to remain high if the supply constraints continue.
• Strategic Industry Responses: Stakeholders may need to explore diversifying supply sources or investing in aquaculture to meet ongoing demand and mitigate supply risks.

Conclusion

The US scallop market is currently experiencing significant challenges due to the interplay of restricted supply and strong demand, particularly for larger scallop sizes. As the industry navigates these complexities, strategic planning and market adaptation will be crucial for maintaining sustainability and profitability. The continued demand for high-quality scallops, despite rising prices, underscores the importance of this seafood segment in the culinary and economic landscapes.

In a significant shift driven by international trade disruptions, the Japanese scallop market has seen a dramatic rise in domestic consumption following China’s import ban. This development stems from China’s decision to halt imports of Japanese seafood due to concerns over the Fukushima nuclear incident, profoundly impacting Japan’s seafood export strategy. The focus of this shift has been particularly pronounced in regions such as Hokkaido, which is pivotal to Japan’s scallop industry.

Dramatic Increase in Domestic Consumption

The fiscal year 2023 witnessed a remarkable 42% year-on-year increase in the consumption of frozen scallop meat in Japan, totaling 13,500 tons. This surge is unprecedented, marking the first time in nearly three years that domestic sales have surpassed exports. The reduction in prices, which saw a significant drop last October—23% for 3S specification scallops to JPY 2500/kg—has played a crucial role. This price adjustment has made scallops more accessible to consumers, boosting sales across supermarkets, conveyor belt sushi restaurants, and online platforms.

Impact of China’s Ban on Japanese Seafood Exports

The full import ban imposed by China in response to environmental concerns has necessitated a rapid pivot in Japan’s seafood export approach. With one of their largest markets now closed, Japanese exporters have been compelled to redirect their focus toward other international markets like the US and to strengthen the domestic market. This strategy has not only helped mitigate the immediate fallout from the ban but also spurred significant growth within the local market.

Production and Sales Trends in Hokkaido

In 2023, Hokkaido saw an 18% increase in the production of frozen scallop meat, reaching 24,800 tons. Despite the challenges posed by China’s ban, which drastically reduced raw meal exports, the region has successfully shifted its focus towards enhancing scallop meat processing and boosting domestic sales. Yoshihisa Kawasaki of the Hokkaido Fisheries Cooperation Association highlighted this trend at a national conference, noting the strategic pivot to more sustainable market practices.

Future Outlook for the Japanese Scallop Industry

Looking ahead, Japan’s scallop supply, including production and inventory, is expected to increase by 20% to 30,000 tons by the end of 2024. This optimistic forecast anticipates a recovery to levels not seen in nearly a decade, facilitated by continued focus on domestic market enhancements and export diversification. The industry’s resilience is evident in its ability to adapt to changing market dynamics and leverage domestic opportunities.

Challenges and Opportunities for Scallop Industry

The Japanese scallop industry faces ongoing challenges such as adapting to new market realities and environmental uncertainties. However, these challenges also present opportunities for innovation, particularly in developing sustainable fishing practices and exploring new markets. Continued investment in local marketing and product development, especially in regions like Hokkaido and Aomori, is crucial for sustaining growth and supporting the broader fisheries sector.

Conclusion

The shift in market dynamics for Japanese scallops, characterized by increased domestic consumption and strategic realignment following China’s import ban, reflects a broader adaptation within Japan’s seafood industry. The industry’s focus on bolstering internal markets while diversifying exports demonstrates a robust response to international trade challenges. Looking forward, the Japanese scallop industry appears well-positioned to continue its growth trajectory, supported by a strong foundation in sustainable practices and market adaptability.

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Scallop Price Trends in the US

The recent reports from the US Seafood Auction have illuminated a marked increase in the prices of Atlantic scallops per pound, indicating a significant surge across various specifications. This trend underscores an ongoing escalation in scallop prices, drawing attention to its implications for the seafood industry and consumer markets. Notably, U-10, U-12, and 10/20 scallops have witnessed substantial price movements, emphasizing the need for a detailed examination of these trends.

Detailed Analysis of Current Scallop Prices

During the 21st week of May 2024 (May 20-26), scallop prices saw notable increases:

• U-10 scallops reached $25.15 per pound, marking a 4% increase from $24.51 the previous week, and a staggering 75% increase from $14.57 in the same week of 2023.
• U-12 scallops escalated to $21.36 per pound, a slight rise of 0.5% from $21.25 the previous week, and a 51% increase year-over-year.
• 10/20 scallops were priced at $13.63 per pound, up 4% from $13.09 the previous week, and 28% higher than $10.65 per pound a year ago.

These statistics not only highlight the week-over-week growth but also reflect significant year-over-year price increases, underscoring a dynamic shift in the market’s valuation of these seafood products.

Factors Influencing the Rise in Scallop Prices

The ascending trajectory of scallop prices can be attributed to several key factors:

• Supply constraints: Limited catches and reductions in quota allocations have tightened the available supply.
• Increased demand: Both domestic consumption and international demand for high-quality scallops have grown, further straining the supply.
• Regulatory changes: Adjustments in fishing regulations may have restricted the volumes of catch allowed, impacting the overall market supply.

These elements combined have contributed to the inflationary pressures on scallop prices, affecting various stakeholders in the seafood industry.

Market Response and Industry Impact

The seafood industry’s response to these rising prices has been multifaceted. Distributors and retailers are reassessing their pricing strategies to maintain profitability while ensuring consumer affordability. On the consumer front, the escalating prices may lead to a shift in buying patterns, with potential reductions in scallop consumption or a switch to less expensive seafood alternatives.

Comparison with Historical Data

Historical data from the National Oceanic and Atmospheric Administration (NOAA) shows that nearly 3.9 million pounds of scallops were caught in the early months of the 2024 fishing season, comparable to 4.5 million pounds in the same period of 2023. This data provides valuable context for understanding the fluctuations in catch volumes and their correlation with price movements over the past seasons.

Future Outlook for Scallop Prices

Looking ahead, the market for scallops is expected to remain volatile with continued price increases likely if current trends persist. Stakeholders may need to employ strategic measures such as diversifying sourcing locations or investing in aquaculture to mitigate the impact of high prices. Additionally, market players should prepare for potential regulatory changes that could further influence scallop availability and pricing.

The escalation in scallop prices per pound in the US market has posed significant challenges and opportunities for stakeholders across the seafood industry. As we move forward, understanding these trends and adapting to the evolving market landscape will be crucial for sustaining growth and profitability. Stakeholder adaptability and strategic planning will play pivotal roles in navigating this dynamic market environment.

Haidong Seafood is China’s pinnacle of premium seafood offerings, including the finest scallops available. Our carefully selected range boasts top-tier bay, sea, and pen shell scallops, complemented by tender clam meat and superior frozen octopus. Position yourself at the cutting edge of the seafood market by choosing Haidong Seafood as your primary resource for the most recent trends, updates, and professional advice. Ensure you’re always in the loop – follow, subscribe, and engage with us to secure unparalleled quality and value in premium scallops. Explore more by clicking here.