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The price of salmon will be higher than previously predicted next year, according to analysts at Helsinki-based Nordea Bank, the largest financial group in northern Europe.

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In a sector report released this week, they said their forecast had been too conservative.

“For 2019, we now expect lower year-on-year supply growth and a further increase in salmon prices. Our new price forecast for 2019-21 is NOK 64 (up from NOK 62) per kilo,” wrote analysts Kolbjørn Giskeødegård and Anders Espedal Hagen.

According to the analysts, there has been an increase in demand in well-established markets such as the EU and the US over the last five years. They wrote in the report that they still see great potential in rebuilding the Russian market as well as Norway returning to a normal presence in China.

5% price growth

“Looking at the relationship between price and supply changes, we conclude that the market is able to absorb 6-7% more fish at stable prices. As a consequence, we anticipate a 5% [price] growth in 2019, despite 4% growth in supply.”

Giskeødegård and Hagen also argued that the sector valuation was too low.  “As a result, we raise our target prices by an average of 15% and highlight Marine Harvest (Buy/NOK 235) as our new top pick in the sector,” wrote the analysts.

Although the report is based on the Norwegian market, it spells good news for Scottish salmon, which sells at a premium compared to Norwegian fish.

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