Scottish salmon sales unaffected by high prices

Published on
May 8, 2011

High prices of farmed salmon are not hurting Scottish sales, as some reports suggest. Far from it, Scottish salmon farmers can easily sell all the salmon they have, according to David Sandison, secretary of the Scottish Salmon Producers’ Organization (SSPO).

Speaking at last week’s European Seafood Exposition (ESE), Sandison said: “All salmon-producing countries are enjoying strong prices at the moment, but sales globally continue to grow.”

Sandison was at pains to point out that the current price level was some compensation for the poor prices Scottish salmon farmers had suffered from in 2004-05 when they were starved of profits and “some were going bust.”

Contrary to earlier observations that the production of farmed Scottish salmon could not be increased because of a lack of suitable farming sites, there are “sustainable growth opportunities in Scotland,” according to Sandison. By 2020, Scottish salmon farmers could be producing up to 200,000 metric tons, he said. Production in 2009 was 144,000 metric tons.

Much of the anticipated growth in production would be achieved through the re-organization of existing farming sites, said Sandison, while the remainder would come from the development of more exposed sites further out to sea.

Although, not surprisingly, the UK continues to be the single most important market for Scottish salmon, export sales are gaining ground and emerging markets such as China offer further potential. “We are very enthusiastic about China for future sales,” said Sandison, “but a lot of business development work is required to fully understand the market needs.”

However, it is not just China that has potential. “Middle Eastern countries such as Dubai, Kuwait and Qatar regard Scottish salmon as a luxury product and of premium value, so it is fetching good prices there,” said Sandison. “Israel and South Africa are amongst other markets being looked at by member companies.”

Figures released by the SSPO just prior to ESE show that fresh Scottish salmon is now exported to 54 countries and exports overall reached 78,611 tonnes in 2010, a massive increase of 20 percent compared with the year before. This follows Scotland’s first increase in production in five years in 2009 (12 percent). From now on, production is expected to grow by an average 3 to 5 percent per annum.

Sandison was at pains to point out that the Scottish salmon industry needs “sustainable economic growth to continue to invest in the sector.”

“It has to be profitable,” he said. “An increase in production requires significant forward commitment; there has to be a lot of capital to re-invest.”

The industry had been starved of investment for many years, he added, “but that is now changing and we have seen major investment in salmon farming in Scotland over recent years.”

On this point, Sandison said that foreign ownership — mostly Norwegian — of Scottish salmon companies was beneficial. “Norwegian financial institutions, unlike those in the UK, understand the seafood industry and the kind of investment in it that is required.” He added that attracting the new Polish investment — Morpol now has 20,000-plus metric tons production in Scotland — is likely to be a good thing for the Scottish economy, and emphasized that “the organization, management structure and employees of the industry are still very Scottish.”

Sandison said that farmed salmon production in Chile was likely to increase during the next few years. “It may get back to the same level as it was at its height, but that will take some time, perhaps four to five years.”

Sandison didn’t see this potential “substantial rise in production” as being a threat to Scotland. “The USA, Japan and Brazil are the main markets [for Chilean salmon]. Chile sends frozen fillets to Europe, so this makes it a different market than the one Scotland supplies with fresh salmon,” he said.

Regardless of the situation in other salmon-producing countries, Scottish salmon farmers will have their hands full for the foreseeable future coping with demand for their product from around the world.

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