FUTURE SEAFOODpascal @ surimi.us - tel +33 6 76 20 59 15

SURIMI MARKET UPDATE

OCTOBER 2016

FUTURE SEAFOODPascal GUENNEUGUES

FUTURE SEAFOOD

Surimi Supply From Around The World

Specialist of Tropical Fish Surimi

SURIMI SUPPLY

Global surimi production: 800,000 MT in 2015

260,000 MT Cold water fish surimi:Alaskan pollock, PW, SBW, Hoki, NBW

500,000 MT Tropical fish surimi: Itoyori, Eso, Flying Fish, Sea Bream, Ribbon Fish, etc

25,000 MT fresh water fish : Silver carp (Aquaculture, China)

10,000 MT other : Sardine, Mackerel, etc

Tropical Fish

(Itoyori, etc)

500,000 MTThailand, Vietnam, India, China,

Indonesia, Malaysia,

Pakistan, Myanmar …

WORLD SURIMI PRODUCTION

800,000 MT (2014/2015)

Alaska

Pollock

200,000 MT

USA

Pacific

Whiting

25,000 MT

USA

North Blue

Whiting

3,200 MT

France

China

Silver Carp

25,000 MT

Japan

Pollock

30,000

MT

Southern Blue Whiting & Hoki

6,000 MT

Argentina/Chile

SURIMI SUPPLY 2014-2015

Supply and demand stable around 800,000 MT/year

Alaskan pollock surimi production increase by 30,000 MTdecreased production in Japan 20,000 MT and PW 10,000 MT

Tropical fish surimi stable : decrease in Thailand, increase in Vietnam

0

200.000

400.000

600.000

800.000

1.000.000 Other

Tropical Fish

Other cold water

Pollock

GLOBAL SURIMI PRODUCTION 2005-2015 (MT)

2006 2007 2008 2009 2010 2011 2012 2013 2014 20152016 est

Pollock USA 178000 161000 126000 86000 105000 148000 167000 170000 183000 202000 210000

Pollock Japan 41000 35000 42000 46000 55000 60000 64000 52000 37000 34000 30000

Pollock Russia 0 0 0 150 900 800 100 2000 0 0 0

Total Pollock 219000 196000 168000 132000 160000 208000 231000 224000 220000 236000 240000

Alaska Pollock quota:USA 1.53 million MT, Russia : 1.84 million MT

Pollock surimi production in 2016 expected to remainaround 230,000-240,000 MT

0

50000

100000

150000

200000

2500002

005

200

6

200

7

200

8

200

9

201

0

201

1

201

2

201

3

201

4

201

5

201

6 (

est)

Pollock Russia

Pollock Japan

Pollock USA

POLLOCK SURIMI 2005-2016exp (MT)

Pacific Whiting TAC and Catch (MT)2005 to 2015

0

100.000

200.000

300.000

400.000

500.000

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

TAC

Catch

2015: Decreased Catch by 100,000 MT due to no catch in fall (fish is spread out and vessels cannot catch) -> Decreased surimi production by 10,000 MT

2016: Quota increased 15% (367,000 MT); Factory vessels increase their catch in Spring and Fall Season -> PW surimi production increase 10,000-15,000 MT (?)

Other Cold Water Surimi

Northern Blue Whiting Surimi : stable around 3,200 MT

Southern Blue Whiting and Hoki : increase from 6,000 MT to 10,000 MT due to increased production by San Arawa in Argentina

TROPICAL FISH surimi production slightly deceasing in historical processing countries in 2016 (-20,000 MT?) due to reduction of illegal fishing and lower demand due to supply of pollock surimi

THAILAND : 55,000 MT (-10,000 MT)VIETNAM : 150,000 (-10,000 MT)INDIA : 55,000 MT (stable)CHINA : 200,000 MT (-10,000 MT)

Production slowly increasing in other countries in South East Asia

INDONESIA : 40,000 MTMALAYSIA : 20,000 MT PAKISTAN : 5,000 MTMYANMAR : 3,000 MT

0

200.000

400.000

600.000

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016(est)

Vietnam

China

India

Thailand

TROPICAL FISH SURIMI 2005-2016 est. (MT)

0

50000

100000

150000

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

20

16

est

Thailand Surimi Production 2005-2016 (MT)

0

20000

40000

60000

India Surimi Production 2005-2016 (MT)

0

40000

80000

120000

160000

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

est

Vietnam Surimi Production 2005-2016 (MT)

0

50.000

100.000

150.000

200.000

250.000

China Surimi production 2005-2016 (MT)

TROPICAL FISH SURIMI 2005-2016

0

200.000

400.000

600.000

800.000

1.000.000

200

5

200

6

200

7

200

8

200

9

201

0

201

1

201

2

201

3

201

4

201

5

201

6…

Other

Tropical Fish

Other cold water

Pollock

GLOBAL SURIMI PRODUCTION 2005-2016 est. (MT)

Global surimi production is stable around 800,000 – 810,000 MT since 20132016 production similar to 2015

Market is stable, slightly decreasing in 2016

Import Volume in Japan, Europe, Thailand, China decreasing in 1st half of 2016 reflecting economic recession and reduced inventory of surimi seafood processors

SURIMI SEAFOOD MARKETS

Western world: Europe, Russia, USA

Crabsticks-> Salads and snacking

Eastern world: Japan, Korea, China, SE Asia

fried fish cakes, fish balls, dried snacks-> hot pot (steam boat), oden-> barbecue-> snacks, etc

SOUTH AMERICA1,000 MT

(5,000 MT)

JAPAN300,000

MT

(600,000 MT)

WORLD SURIMI MARKET: 800,000 MT-> Surimi Products: 2.7 million MT (2015)

SOUTH EAST ASIA70,000 MT

(200,000 MT)

CHINA220,000 MT

(1,200,000 MT)

KOREA120,000 MT

(350,000 MT)

EAST EUROPE20,000 MT

(60,000 MT)E.U.45,000 MT

(150,000 MT)

USA30,000 MT

(90,000 MT)

Surimi Market Raw Material -> (Finished products)

MARKET UPDATE SURIMI CONSUMPTION TREND 2015-2016

Japan: surimi consumption decreased in 2015 by 2-3% as a result of increased prices

and a mild winter. Same trend continues in the first half of 2016.

Korea: market stable ; recovers in 2016 after slight decrease in 2015

South-East Asia: market keeps growing around 10% per year in Thailand, Malaysia,

Indonesia, etc

China: market slow in 2015. Concentration : large processors take-over the domestic

market while the government closes down small processors with poor sanitaryconditions.

Europe: surimi seafood market stable, decreasing in France, growing in Spain and

Italy.

Russia: surimi seafood market keeps decreasing by 15-20% in 2016

USA: market slowly growing 2-3% per year after years to stagnation

Overall the world surimi demand is stable; surimi seafood processors tend to decrease inventory of raw material due to healthy supply of pollock surimi.

JAPAN SURIMI MARKETDecreased consumption 2-3% in 2015 due to increased prices of finished products (+15/20% in 2 years) and a mild winter.

Total Import Stable around 250,000 MTIncreased Imports of Alaskan Pollock : + 8,000 MT in 2015

JAPAN SURIMI INVENTORYAfter increasing from 50,000 to 60,000 MT in 2015 due to decreasedmarket, Japan inventory is lower in 2016 as imports decreased

40.000

45.000

50.000

55.000

60.000

65.000

70.000

75.000

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

Surimi Inventory In Japan (MT)

2012

2013

2014

2015

2016

JPY / USD exchange rate back to 100, same level as 2014 -> reduced purchase price for pollock surimi in Japan should have a positive impact on the price of finished products and surimi consumption in Japan in the coming months.

0

50000

100000

150000

Jan-Dec'13 Jan-Dec'14 Jan-Dec'15

Other

Indonesia

India

Thailand

Vietnam

China

USA

Korea surimi imports 2013-2015 (MT)

KOREA SURIMI IMPORTS

0

20000

40000

60000

80000

Jan-Aug'14 Jan-Aug'15 Jan-Aug'16

Other

Indonesia

India

Thailand

Vietnam

China

Argentina

USA

Korea surimi imports Jan-Aug 2014-2016 (MT)

Korea Surimi Imports mainly low grade surimi from China and Vietnam for fried fish cakes. Some higher grade is used for crabstickand high end products

After a slight decrease in 2015, the Korean market recovered in 2016. Imports of medium quality surimi increase in relation to the rapiddevelopment of the market for high quality fish croquettes in Korea.

0

10.000

20.000

30.000

40.000

Jan-Dec'13 Jan-Dec'14 Jan-Dec'15

Indonesia

China+HK+TW

USA

Vietnam

Thailand Surimi Import 2013/2015 (MT)

0

10.000

20.000

30.000

40.000

50.000

Jan-Dec'13 Jan-Dec'15

China

Russia

Korea

Japan

Thailand surimi export 2013-2015 (MT)

THAILAND SURIMI IMPORT & EXPORT

Thailand imports have rapidly increased since 2013 to reach 35,000 MT in 2015. Main supply from Vietnam.

2016: decreased import volume in the first half year 2016 as Thai exports decreaseand more volume is used for domestic market.

Despite economic slowdown, local processors continue to enjoy a solid growth thanksto product innovation (fried surimi, snacks, etc) and increased sales to modern trade(supermarkets, convenience stores) and to northern regions and increased export to neighbor markets (Lao, Cambodia).

0

20.000

40.000

60.000

Jan-Dec'13 Jan-Dec'15

US PollockUS HakeHoki+SBWVietnamIndiaThailand

EU surimi imports 2013-2015 (MT)EU SURIMI MARKET

The EU market stable in the past years.

French market decreased 5% in 2015 and again 10-15% in 2016 while othermarkets like Spain and Italy keepgrowing with chilled products.

0

10.000

20.000

30.000

Jan-Jul'14 Jan-Jul'15 Jan-Jul'16

Hake

Pollock

EU surimi imports from USA

US surimi dominates the exports to EU.

Pacific Whiting surimi imports increased in 2014 and 2015 to represent nearlythe same volume as pollock surimi … but it will be lower in 2016 due to no production in the fall season of 2015.

France 54,000 t

Spain 44,000 t

UK 10,000 t

Sandinavia 4,000 t

Italy 13,500 t

Benelux / Germany

10,000 t

0

5000

10000

15000

Jan

Feb

Mar

Ap

r

May Jun

Jul

Au

g

2015

2016

Russia Surimi imports Jan-August 2015/2016 (MT)

0

5.000

10.000

15.000

20.000

25.000

Jan-Dec'13 Jan-Dec'14 Jan-Dec'15

Pollock &PWTropical fish

Other

EAST EUROPE SURIMI MARKET

Russia Surimi Imports 2013-2015 (MT)

As a result of the economic situation East Europe surimi market keeps declining : after a decrease of 20% in 2015, the market has decreased by another 20% in the first half of 2016.

CHINA SURIMI MARKET

China market is over 1.2 million MT Estim. consumption ~220,000 MT of surimi raw material.

China surimi seafood market has been suffering 2 years of depression:- High competition for low-end market- Increased cost of raw material (incl.chicken meat, pork fat)

-> low/no margin products

Market stagnant in 2015 : economic recession, mild winter.

Processors try to shift from low-end fish balls to higher quality products.

New season starting in China may shape the surimi market for the end of this year.

What to expect for the surimi market in 2016

Surimi production has been stable in 2016 (similar to 2015).

Raw material prices remain high in SE Asia, surimi production costtends to increase but the price of surimi cannot follow due to the abundance of pollock in the market.

Low oil prices favorable for the fishing industry but it does not translate into lower prices for raw material.

-> problem of competitivity for tropical fish against alaskan pollock-> tropical fish surimi producers suffer from low market prices

The pollock resource should remain abundant in 2017 and the marketis expected to remain relatively stable in the coming months and year.

FUTURE SEAFOOD

pascal @ surimi.us - tel +33 6 76 20 59 15

FUTURE SEAFOODPascal GUENNEUGUES

THANK YOU