Huon Aquaculture cuts forecast for salmon harvests due to COVID-19

Published on
May 4, 2020

Due to the ongoing impacts of COVID-19, Huon Aquaculture Group Limited has modified its harvest program of its 2019 year-class salmon until the market begins to normalize.

In a 29 April market update, the Tasmania, Australia-based salmon company said it is expected to decrease its targeted harvest, which was initially projected to be at least 25,000 metric tons (MT), by between 5 and 10 percent.

“Due to the ongoing impact of COVID-19 disruptions in Australia and internationally, there is sufficient uncertainty regarding the trading outlook for the remainder of FY2020 that Huon is withdrawing its guidance in relation to the performance of operating and statutory earnings relative to FY2019,” Huon said.

The company said it is optimistic that it will recover by FY2021, predicting an increase ofbetween 20 to 25 percent above its baseline forecast of 30,000 MT for that year due to the carryover of fish from FY2020, operational improvements, and good growing conditions.

In the first part of 2020, Huon has had mixed results in terms of sales, with a strong retail market, but heavy impacts to foodservice channels due to the pandemic.

“While sales through retail channels have been strong, due to its high exposure to the foodservice channel, Huon has experienced a significant drop in sales in its wholesale market during April,” Huon stated.

Travel restrictions affecting international air freight services have made it difficult to access export markets, it said. But despite the pandemic, the company has continued  operations, following the government's declaration of food providers as essential businesses.   

In February, Huon said that because of the successful completion of its investment program, it can increase salmon supply in the growing domestic and international markets.

According to the Australian government, fisheries, and aquaculture production value is forecast to decline by 12 percent in 2019–20 to AUD 2.81 billion (USD 1.8 billion, EUR 1.6 billion) as a result of reduced export demand from China following the outbreak of COVID-19.

“The outbreak is assumed to impact markets for the second half of the 2019–20 financial year, followed by a resumption of typical market conditions by the end of the financial year,” according to the government’s outlook.

Production value is expected to increase by 21 percent in 2020–21 to AUD 3.4 billion (USD 2.1 billion, EUR 2 billion) when export markets normalize, it predicted.

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