Snow Crab Market Update

May 6, 2021 – This week, NL snow crab started being quoted on the Urner Barry index, which is a key benchmark in the setting of prices to harvesters. The quote for 5-8 oz of snow crab came out on Tuesday, May 4th, at a high level and increased again on Thursday, May 6th.

Given these high prices, we think that the likelihood that processors will be seeking a price reconsideration is low. Supporting our conclusion is the following comment from John Sackton, who provided a price update today to the province:

The crab market normally goes through an annual cycle where once a market price is established, prices tend to rise over time as sellers are able to add their incremental costs for holding product.
Unless there is an unexpected general market reversal in the United States, there is every indication that this year will maintain this pattern.
Once confidence is established at these price levels, there is little incentive on either buyer or seller’s part to push for price changes. They would only happen under duress, and over the past two weeks the risk of such an unexpected development has lessened, not increased.

With that said, we cannot predict the future. The market could change at some point, but right now we do not see any market conditions supporting a decrease in price.
Please also note that it is likely that the currency provision in the crab agreement will trigger a 7 cent per pound price decrease starting Monday, May 10th. This currency provision has been in place for several years and prices to harvesters have moved up and down at different times. The advantage of the currency provision is that it removes currency as a cause for a reconsideration.
The Canadian dollar has strengthened in the last few weeks and as a result next week’s price will likely be $7.53. We will post an update if that does occur. An explanation of the currency provision can be found at the FFAW website: https://ffaw.ca/our-fish-prices/crab-prices-2021/