An average 4 percent growth rate is expected for the global salmon market 2022, rising to 5 percent in 2023, according to Rabobank Senior Seafood Market Analyst Gorjan Nikolik.
Nikolik analyzed production in Norway and Chile for his analysis, which was delivered at the annual meeting of IFFO, the international trade body that represents the marine ingredients industry, in late October.
Norway should boost its salmon volumes by 8 percent in 2021, having recovered from a slump in salmon sales during the COVID-19 pandemic, Nikolik said. And Chile production is on track for a 12 percent rise in production this year, which suffered from algal blooms and a contraction in supply through the pandemic, which resulted in fewer fish being put in the water.
Nikolik said 2020 was “a very difficult year” for Chile, with lots of fish to sell but no markets buying, resulting in low prices. But one positive that came from the turmoil was a boost in sales to the retail market, Nikolik said.
“People were stuck at home and many of them started to cook fish, which is a trend that is continuing, and we see both the foodservice and retail sectors developing demand on the U.S. market, with attendant higher prices,” he said.
Chile’s advances in biology, legislation beneficial to the industry, technology, and husbandry skills have resulted in an increase in average harvest weight from 4.75 to 5.41 kilograms and a notable reduction in mortalities.
“The Chilean industry really is performing very well,” he said. “It’s above Norway.”
In contracts, Norway has faced constraints from licensing restrictions, which dictate maximum permitted biomass. However, use of new technology to produce ever larger smolts on land is seen as a possible solution to overcoming licencing issues, Nikolik said. Traditionally, smolts have been transferred to sea at 100 to 150 grams, but around 18 percent of farms are currently waiting until their smolts are at least 250 grams in size to transfer them to the sea, and this percentage is growing. Mowi for example, transfers 20 percent of its smolts at this size, and by 2026, it plans to transfer 60 percent of its fish at 500 grams.
This year, recirculating aquaculture systems (RAS) were supposed to deliver more-significant volumes of salmon, offshore farming was also supposed to be a bigger part of the mix, but progress on both fronts has been slower than expected, according to Nikolik.
“More production on land for the early stages of fish production is the future for salmon farming, as is the move to placing cages further offshore. Technology is moving at a fast pace in the salmon world, but I believe it will be five to 10 years before all the issues associated with farming in more exposed places have been resolved,” Nikolik said. “The salmon did not materialize due to a variety of production issues, which have reduced confidence in the sector. However, this is a very young market and will take time to mature.”
Nikolik said salmon prices are recovering after slumping to an average per kilo price of NOK 55.48 (USD 6.52, EUR 5.61) in 2020. The per-kilo price of Norwegian salmon has now climbed back to an average of NOK 58.34 (USD 6.86, EUR 5.89), and the futures price for 2022 is NOK 60.75 (USD 7.14, EUR 6.14), which is profitable for salmon farmers, according to Nikolik.
Photo courtesy of Rabobank
