Production rights exceed carrying capacity
Although he minimizes the magnitude of the recent decrease in production volumes, the executive stresses the importance of the deteriorated financial results recently reported by Chile's salmon producers.
"We believe there will be a production adjustment downward in the coming months," he predicted.
He explained to Salmonexpert that the reason for this decline in returns has nothing to do with an oversupply but due to the significant devaluations of several key currencies.
"Some of our main destinations, such as Russia and Brazil, have been strongly affected and have become countries with lower purchasing power. Thus, we have been forced to reduce the price of our products so they can continue consuming the same amounts," he explained.
He also stressed the need for the authorities to limit production to help ensure good fish health conditions.
"We have a big problem as an industry, as there are production rights that far exceed what we have learned in practice as the carrying capacity of each site. Therefore, we are asking the authorities to regulate the production and production growth, so that no large increase may interfere with health issues," said Balbontín, adding that experience has already shown them this situation. “We have certain years with a very good productivity and low volumes. Then, immediately after that we strongly increase our production, which has represented quite big sanitary problems.
"Our production this year will be around 28,000 tonnes of Atlantic salmon, representing a significant decrease from our volumes last year, when we produced 44,000 tonnes. This is because santiary conditions in 2013 were such that we lacked the confidence to continue expanding," he explained.
