Price drop predicted

Kolbjørn Giskeødegård, of Nordea markets, had downgraded his price prediction for the year ahead from NOK 45 to NOK 43, due to the risk of 'stagflation' – he predicts a 30% increase in feed costs, leading to production cost per salmon increasing from NOK29 to NOK 30, combined with a stagnation in salmon prices.

Other factors he mentions as having a negative effect on prices are the increase in Chilean production, the lack of Norwegian access to the Russian market and the good growth rate in Norway that has been achieved thanks to the mild winter.

He also predicts mixed fortunes for investors, stating: “In this report we downgrade Marine Harvest and Grieg Seafood to Sell, as we argue that the current outlook suggest that there will be margin pressure ahead. On the other hand, we keep our Buy rating for Lerøy and upgrade Bakkafrost to Buy (Hold) following what we consider an unjustified share price drop in recent weeks.”