Cermaq: Salmon market needs Chile

Canada and the United Kingdom are expected to be the two main beneficiaries of this year’s anticipated drop in Norwegian farmed salmon production, but many industry stakeholders believe only the return of Chile to the international arena can bring much-needed stability to the sector.

The collapse of the Chilean industry following the infectious salmon anemia (ISA) virus outbreak is arguably the main contributor to the record prices and subsequent healthy balance sheets of many Norwegian producers, but these same companies and others are keen for Chile to make a fast comeback as they believe its revival could help keep prices in check.

Chile remains optimal for salmon production, insisted Geir Isaksen, CEO of Norway-based Cermaq, which is one of the world’s largest salmon farmers and one of the top three feed producers.

Isaksen told delegates at the recent North Atlantic Seafood Forum (NASF) in Oslo, Norway, that he expects Chile to harvest less than 100,000 metric tons this year, but a lot of hard work has been going on behind the scenes that will see volumes start to “steadily increase” from 2011.

“There will be a lot of changes in the way the industry operates in Chile. These will create a better environment for salmon farming,” he said. “We feel Chile has a very important role to play in salmon production.”

He highlighted that the South American country offers the ideal, long, protected coastline and water temperatures needed for salmon farming. In addition, it has low labor costs compared with the Northern Hemisphere, and geographically the farms are close to the main sources of feed.

“It has high processing capabilities and a history of good product innovation. We’re also seeing a lot of improvements in husbandry and the cooperation between producers, so I remain optimistic about Chile,” said Isaksen.

He conceded there remains a lot of debt in the industry but said “new money is being made available for new production,” and there is a growing culture of ventures renting farm sites rather than buying them.

Instead of leaving sites idle, key companies have found that they can create opportunities and revenues by following this strategy. It may also enable a swifter recovery for the sector than previously expected, said Isaksen.

In the short-term, salmon production is being limited by very low supplies of high quality eggs.

“Today, we don’t see any available Atlantic smolt in Chile at all, and in my opinion that is the most restricting factor. Healthy smolt is the best starting point.

Cermaq found the yield per smolt during the ISA crisis was just 2 kilograms, whereas historically the yield had been more than 3.5 kilograms per smolt.

Latest estimates suggest 78 million smolt will be introduced this year, not all of which will be harvested in 2011.

But Isaksen said such an amount is “optimistic.” He suggested that a more realistic input of 40 million to 60 million smolt in 2010 could increase the harvest volume in 2011 by 80,000 metric tons if the fish are kept healthy.

“But these are uncertain estimates because we don’t know how well Chile has returned to its pre-ISA standards,” said Isaksen. “In any case, it’s going to take the industry several years to recover from the ISA crisis and to make all the necessary improvements to its practices. But I have no doubt Chile will come back and it will operate in a more sustainable way and produce high quality smolts.”

Of the 100,000 metric tons of salmon it is expected to harvest this year, Chile will export around 93,000 metric tons. Approximately 42,000 metric tons, or 45 percent, of this will be exported to the United States and 14,000 metric tons, or 15 percent, will be shipped to the European Union.

According to analyst Nordea Markets, Canada is expected to harvest around 120,000 metric tons and the United Kingdom will harvest 140,000 metric tons in 2010.

Norway, meanwhile, will produce around 930,000 metric tons this year as a result of the worst winter in decades. The total global harvest is expected to drop 5 percent to around 1.35 million metric tons in 2010.

All Aquaculture stories >

Subscribe

Want seafood news sent to your inbox?

You may unsubscribe from our mailing list at any time. Diversified Communications | 121 Free Street, Portland, ME 04101 | +1 207-842-5500
None