Peruvian flying jumbo squidGood prospects in China
The favourable situation of the flying jumbo squid (Dosidicus gigas), also know as the Humboldt squid, has been enhanced recently by different factors in China.
The unexpected strength in prices last year prompted numerous Chinese factories to rethink the possibility of having cooking facilities at the squids destination, in order to not rely on third parties.
China generates almost 80 per cent of the demand for the flying jumbo squid and has national teams available for both processing and production. They also have the neccessary technology and, above all, cheap and abundant labour.
With the start of celebrations for the Chinese New Year, a time when there is a strong increase in consumption of squid, Peru is expected to begin capturing the species, but everything remains the same or worse in the Latin American country.
For this reason, Chinese companies have decided to move their fishing fleet from the South Atlantic to the Peruvian coast, where fishing for jumbo squid will allow them to produce the raw material (tubes with skin) in abundance.
There is also another element that favours the flying jumbo squid: a poor fishing season in 2010 and so far in 2011 for the Illex squid in the Atlantic.
It is estimated that there are around 150 Chinese fishing vessels currently catching jumbo squid in waters that are 200 miles from Peru. From there, they transfer their catches to the 'mother ships' which land at ports in China every 15 days.
The species fetches a price close to USD 1,600 C&F per tonne, but with certain advantages: the buyer does not have to pay for purchases in foreign currency (USD) since they are able to pay in CNY. They can also choose the amount that they wish to purchase which avoids the expense of bank financing, insurance and customs clearance.
However, it has even more benefits: part of production, represented by the pre-prepared (prepared as a snack) jumbo squid, is re-exported to the Baltic countries, Russia, Japan and Korea, so that producers have a benefit, in addition to the draw-back (approximately 13 per cent).
In this regard, squid tubes provided by Chinese vessels result in a price equivalent to USD 1,200/t C&F China.
While the final product (pre-cooked tube), with a yield of 40-41 per cent, is not entirely white, it is preferable to offer the end customer a lower price rather than being uncertain with the purchase and delivery, as in 2010.
In principle, it is expected - this is an unofficial estimate - that there will be a mass arrival of tubes during May and June, approximately 200,000 tonnes, (more or less at a rate of 1,300 tonnes per ship).
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