The tight supply situation in China's squid market may continue in September, which will drive the squid price index to remain high and volatile

China's offshore squid (August 2024 review)

CHINA
Friday, September 06, 2024, 07:00 (GMT + 9)

Introduction: The China Ocean Squid Price Index Review is jointly compiled and released by Zhejiang Zhoushan International Agricultural Products Trading Center Co., Ltd. and Shuliang Technology.

The content and views of this article are for reference only. The squid market is volatile, and the price index trend is only used to reflect the changing trend of domestic squid prices. In this issue, the China Ocean Squid Price Index for August 2024 is calculated based on the ocean squid price data from various sea areas provided by Zhejiang Zhoushan International Agricultural Products Trading Center Co., Ltd. and the Shuliang Technology index model, providing an authoritative and scientific analysis of the index operation for manufacturers and consumers.

I. Overall performance of the index

According to data from Zhejiang Zhoushan International Agricultural Products Trading Center Co., Ltd., from the perspective of the monthly price index, the monthly price index of China's ocean squid rose to a high level in August 2024 , closing at 191.16 points, up 3.58% from the previous month. From the perspective of the weekly price index, the price index rose steadily in each week of August . Among them, the index rose the most in the second week, reaching 2.79%; at the end of August, the index closed at 187.11 points, up 6.23% from the end of July.

2. Analysis of the monthly price index trend of squid

In August 2024, China's offshore squid price index rebounded from a high level and closed up again at 191.16 points, up 3.58% from the previous month. Recently, there is still no sign of improvement in the global squid catch, and the market supply continues to be limited. Although the high price has a certain inhibitory effect on market demand, the impact is limited, and the squid price is still running high.

Figure 1 Trend of China's Ocean Squid Price Index (monthly)

In August 2024, except for a slight decline in the squid price index in the northwest Pacific Ocean, the squid price indices in other waters all increased to varying degrees.

The squid price index in the Southeast Pacific Ocean rose the most, closing at 196.84 points, up 4.20% from the previous month. Peruvian squid produced in the Southeast Pacific has always occupied a large share of the global squid market, and its production will have a great impact on the price trend of squid. However, since the beginning of this year, the production of Peruvian squid has dropped sharply. According to official data from the Peruvian Ministry of Production, the squid catch in the first half of this year was only 140,000 tons, a decrease of 70% from the same period in 2023. In August, the catch of Peruvian squid was still weak, and as the inventory continued to be consumed, the price increase momentum was strong.

The squid price index in the southwest Atlantic Ocean rose the second, closing at 182.42 points, up 2.70% from the previous month. In August, the market supply of Argentine squid produced in the southwest Atlantic Ocean was relatively sufficient, but due to poor fishing conditions in other waters, the supply of squid decreased, resulting in an increase in market demand for Argentine squid, which pushed the price index up.

Driven by the increase in prices of some specifications of squid products, the squid price index in the Indian Ocean rebounded to close at 181.64 points, a month-on-month increase of 2.13%.

Contrary to the trend of the other three major sea area indices, the squid price index in the Northwest Pacific Ocean fell slightly, closing at 161.54 points, a month-on-month decrease of 0.40%. At present, China's annual output of offshore squid fishing is about 600,000 tons, more than 85% of which are Peruvian giant squid, 12% are Argentine squid, and the output of North Pacific squid and Indian Ocean squid is relatively low. The reason for the low output of North Pacific squid is the depletion of squid resources in the high seas of the North Pacific. Therefore, the squid price in the Northwest Pacific Ocean has been relatively stable. Although the index has declined this period, the decline is small and the overall fluctuation is not large.

Figure 2 Monthly price index trend of pelagic squid in various sea areas (click image to enlarge it)

3. Analysis of weekly squid price index trend

From the weekly price index trend: In August 2024, China's offshore squid price index continued to rise, with an overall outstanding performance. Specifically, the index continued its upward trend at the end of July in the first week of August, closing at 178.05 points, a month-on-month increase of 1.08%; the index rose in the second week, reaching 2.79%; the index rose slowly in the third week, with the increase lowered to 0.23%; the index closed at 187.11 points in the fourth week, and the month-on-month increase expanded again, with an overall increase of 6.23% compared with the end of July.

Figure 3 Trend of China’s Pelagic Squid Price Index (weekly) | (click image to enlarge it)

In terms of details, the trend of the squid price index in the southwest Atlantic Ocean is similar to the overall price index, and it has been rising for four consecutive weeks. The index closed at 150.06 points at the end of August, up 7.59% from the end of July, and the overall increase ranked first among the four major sea areas. The squid price index in the northwest Pacific Ocean basically ran smoothly, closing at 147.61 points at the end of August, down 0.50% from the end of July. Compared with the other two major sea areas, the squid price index trends in the southeast Pacific and Indian Oceans have certain commonalities. First, the two operating levels are similar, both at relatively high levels; second, both are fluctuating upward. At the end of August, the two indices closed at 201.27 points and 202.63 points, up 6.30% and 4.82% from the end of July, respectively; finally, the overall volatility levels of the two are relatively consistent. The amplitudes of the two indices in August were 10.49 percentage points and 10.99 percentage points, respectively, with a difference of only 0.50 percentage points.

Figure 4 Weekly price index trend of deep-sea squid in various sea areas | (click image to enlarge it)

4. Index trend forecast

In the short term, there is no sign of improvement in squid catches in the southeastern Pacific Ocean, and China's voluntary fishing moratorium in the southwest Atlantic Ocean will last until the end of September. During this period, the supply of Argentine squid in the market mainly depends on imports, and the short-term shipping price is likely to remain high. Taking various factors into consideration, the tight supply situation in China's squid market may continue in September, which will drive the squid price index to remain high and volatile.

Source: Shuliang Technology (translate from original in Chinese)

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