Record prices predicted
In an article Kyst.no published earlier in the week, we referred to a report by DNB and Kontali which estimated the annual global growth in salmon production at 4.8 per cent in 2015, 3.4 per cent in 2016 and 3.5 per cent in 2017. Much of this increase is expected to occur in Norway.
It is thought that demand will outstrip this relatively moderate growth rate, causing prices to rise.
“In the last 20 years there has been a global growth of 5-7 percent per year in production, coupled with long-term rising prices, showing the strong growth in demand,” Martens told Kyst.no.
Martens points out, however, that in recent years, prices have levelled off at around 40 NOK (£3.18) per kg.
“It has always been difficult to get more than 40 NOK per kg,” he says, referring to the average price over the past year for fish of 3-6 kg, which Fish Pool uses for settlement of contracts:
2013 39.59 NOK / kg
2014: 40.30 NOK / kg
2015: 40.87 NOK / kg for the first 8 months
2016: 42.00 NOK / kg which is last traded contracts
Martens thinks it is probably because salmon competes with chicken and other proteins that have hardly increased in price during this timeframe.
“When adding that the Norwegian krone is weak, which means lower prices in Euro, this compounds a drop in demand when prices get too high. However, the price developments shown above, demonstrate that there is a certain upward trend, with a moderate but significant jump in forward contracts entered into for next year.
“Producers can now expect to achieve contracts worth NOK 42.00 NOK/kg in 2015, which is history's highest salmon prices averaged for an entire year,” concludes Martens.
