January-april is the main season for Argentine squid (illex), and this year's production is lower than historical levels, leading to a sharp increase in prices. In addition, due to the small size, starting from May 16, Argentina's squid production season was suspended for 21 days.
According to industry sources, after a three-week fishing moratorium, the recent production of Argentine squid is recovering and although not at optimal levels, it has improved compared to earlier periods. Asian demand remains so strong that prices continue to stay high.
On July 6, Juan Redini, president of the Argentine Squid Industry Association (CAPA), confirmed to the UCN that production in Argentina has indeed increased after a short fishing moratorium, and that this year is a special situation compared to previous years.
Redini also said it was unclear how long the fishing season would last, but hoped it would last at least until the end of the month. Redini declined to comment on the price.
The reason for the strong price of Argentine squid is the strong demand in the Asian market, especially in China, Japan, South Korea and other countries. Among the many squid species, the taste and texture of Argentine squid is unique, and the combination of limited supply and strong demand has created a situation of chronic shortage.
At present, the price of Argentine squid has reached $3,800/ ton, up from $3,200-3,400/ ton in early April, setting a record high, and the cumulative production so far this year is still lower than last year.
"The January-April fishing season was very bad, and now production is starting to pick up again. The average price in all destination markets is stable at $3,800/ tonne (CFR)," the head of an Argentine fishing company told UCN. "Due to high demand, prices are unlikely to fall."
Another squid supplier said that the current offer is $3,600/ ton, and the cost and freight in the Asian market is about $600/ ton.
In Argentina, Chinese capital plays an important role in market dynamics in capture fisheries. Some Chinese investors are keen to buy South American fishing companies, especially squid fishing companies. Squid fishing has long been considered a lucrative business, but this year's harvest is lower than in previous years, and despite relatively high prices, the overall profitability of fishing companies has not increased.
In addition, Argentina's severe inflation rate has pushed up operating and production costs significantly. According to Argentina's statistics office, the country's inflation rate reached 94.8% in 2022 and soared to 114.2% in May 2023, which is the highest level since 1991.