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14 May 2012

Cheaper farmed salmon?

Trends for Alaska salmon prices on world market

Recently salmon became a hot topic in fishing news and sites, so I simply can not keep aside of it. In a previous post I already expressed my view on the current situation with a Russia’s ban for Norwegian salmon and some implied reasons of it, and today I will touch another “salmon issue” that concerns not less hot theme – prices for 2012 season.
Here I can see three key factors that will influence prices for salmon.
First, and probably the most important, is connected with farmed salmon, production of which has considerably increased over the past year. Compared to January 2011, in January 2012 the world total farmed Atlantic salmon imports grew by 16.1 percent. And this market can see more changes. Even though Norway remains the world's major farmed salmon producer, Chilean producers seem to have fully recovered from a virus that had nearly killed their salmon farming industry four years ago, and re-entered the market with a highly competing product at a lot cheaper price. This year farmed salmon and trout volume in Chile have already reached 700,000 metric tons, just a bit below Alaska's total salmon production in 2011.
Fast and steady increase in volumes of farmed salmon that arrived on market could not but change prices. It resulted in falling average price of imported farmed salmon by 19.3 percent, and trend looks quite stable. During the past six months we saw a notable decline in farmed salmon prices in the U.S., European, and Asian markets. I’m sure that things with the farmed salmon industry in Norway and Chile are the critical for the markets that will affect this salmon season.
Second main factor, which lies in weaker exchange rates of the currencies of biggest salmon customers, Japan and Europe, also contributed into lowering of farmed salmon prices. If for the past years we saw rising of value of the yen to US dollar, which lead to growth of salmon prices, recently that trend has suddenly changed, and Japanese currency lost 9-10 percent. On the other side, unstable economic situation in Europe Union has also pushed down the value of Euro.
And third factor is, of course, connected with a ban of Alaska salmon, of which I’ve mentioned. At least in a close prospect Norway will have to sell its huge amounts of salmon temporarily discarded from Russian market. Result is obvious.
However, there are some other things to consider. Wild salmon in the U.S. and European markets is more valued by consumers, rather than farmed fish, and respectively, its prices will probably remain higher. But nothing can be said for certain, and situation can change markets in a moment. For example, who could predict Russia’s ban?
But one thing is absolutely sure – strong demand for Alaska salmon.

Posted on 5:32 AM | with 0 comments
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