European Price January 2015--SALMON
2015-01-29 15:06:26   copyfrom:FIN    hits:

Higher water temperatures, meaning better growth conditions, in Norway this year have seen supply volumes of farmed Atlantics up significantly compared with 2013. Combined with the effects of the Russian ban, this relative surplus has pushed prices down in the last quarter compared with the same period last year. In particular, the sudden drop in early December brought temporary turmoil to the markets. From an objective perspective, however, 2014 has undoubtedly been a good year for the industry and the future remains bright. Helped by significant depreciation of the Krone, Norwegian exporters directed substantially more fish to almost all EU destinations, with the notable exception of France. In fact, 2014 was a record year in terms of export revenue, with the Norwegian Seafood Council (NSC) putting the figure at NOK 43.9 billion with an average export price of NOK 41/kg for fresh whole Atlantics. The EU absorbed an additional 11% of Norwegian salmon this year compared with 2013, while the US increased its imports by 9000 tonnes, representing a 47% increase.  Meanwhile, the UK salmon industry is booming on the back of strong demand from the US and Chinese markets, and a steady shift in French preferences toward Scottish farmed salmon.

Analysts are forecasting only minimal growth in Norwegian production volumes in 2015, and forward prices suggest the aggregate consensus expectation is for further prices increases, particularly in the first half of the year. However, there still remains some uncertainty as to the long-term consequences of the situation in Russia, where the picture is complex and involves a number of contrasting effects, including the broader economic consequences of the ban and its impact on consumer spending. In particular, there is some concern as to whether early year demand for Norwegian salmon will be as strong this year in the absence of Russia. In addition, feed price increases and other costs will likely continue climbing next year, while sea lice levels, which tend to increase in line with water temperature rises, remain a persistent problem pushing up costs and preventing growth where regulatory limits are breached. 

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