The price of salmon is controlled by supply and demand, and no single producer is large enough to influence the market prices, according to a Norwegian scientist.
Nofima scientist and doctoral candidate Thomas A. Larsen has studied the competitiveness for Norway’s farmed salmon industry as part of his doctoral thesis, which he shared through a Nofima press release and presented at Tromsø University Business School on Tuesday.
Larsen analyzed the use of contracts in the industry and found widespread use of fixed-price contracts between Norwegian producers and foreign importers. Despite differences between market prices and contract prices, the industry’s total income has not been significantly affected by the contracts, he said. However, for individual companies, the contracts have had a significant effect, in a positive direction for some and in a negative direction for others, he added.
The widespread use of contracts probably contributes to increased efficiency and reduced costs throughout the supply chain, explained Larsen.
“This is an important result that can contribute to further growth in the Norwegian salmon industry,” said Larsen. “This may mean that the markets perceive fresh salmon as a generic product, and that they have equal preference for the various Norwegian producers and their product. If this is the case, the Norwegian Seafood Export Council has done a brilliant job promoting Norwegian salmon out in the markets.”
