Salmon price slump predicted
Such is the opinion of Kolbjørn Giskeødegård, who predicts the export price of HOG salmon is due to fall below NOK 35 (£3.03) per kg.
The Nordea analyst observes: “Driven by lower harvesting, the salmon spot prices rose to NOK 37-38 last Friday. This week volumes are back and combined with a stronger NOK, this is putting new pressure on prices. Spot prices dipped below NOK 35 today and they might fall down to the levels seen 2 weeks ago (NOK 32-33) as there is unsold fish from last week and too much salmon for just 4 selling days (Labour Day tomorrow). Demand seems soft, so far in April, the harvesting in Norway is down 6% compared to 2015 and spot prices are 17% lower. The global demand was soft in Q1, being 1/3 through Q2, this impression seems to be sustained with accelerating price drops in both Americas and Europe. And with a USDNOK sliding down from 8.20 to 7.50 level in just some weeks, we can also fear that less salmon will be sent to USA and more to Europe.
Unsustainable prices
“The Q1 presentation from Marine Harvest shows a 17-34% price drop in key markets (compared to Q1 2014). This was triggered by a 6.4% harvesting growth in Europe and a 0% growth in the Americas (Chile/Canada). In our opinion this is a clear signal that the willingness to pay after all has a limit and that the high prices seen during 2014 seems to have triggered demand destruction,” Giskeødegård reflects.
No major volcano concerns
“As far as we can see from the various reports from companies and SalmonChile, most of the lost fish is fry, for which there seems to be a fair replacement capacity. Only a limited number of smolt have been lost, and we expect no or very limited effect on the 2015-16 smolt release. When it comes to coho, the situation is somewhat different; at least two companies have reportedly lost an entire generation of fish. Anyhow; we should not expect any major supply impact in 2016-17 following this event,” he predicts.
Pacific pressure
“The annual wild salmon fisheries in Alaska and Kamchatca/Sakhalin (Russia) is just around the corner. In Alaska, ocean scientists expect the third largest run in 50 years and in Russia every odd numbered year (2015) also provides a high run,” he observes.
