The spread of the COVID-19 coronavirus is set to cause significant disruptions to farmed salmon supply chains, according to Kontali Analyse CEO Ragnar Nystøyl.
Sharing the firm’s latest analysis at the North Atlantic Seafood Forum (NASF) 2020 in Bergen, Norway, Nystøyl forecasted that the total Atlantic salmon harvest would rise to between 2.6 and 2.7 million metric tons (MT) this year, with producers in Norway and Chile leading the main volume growth. At the same time, relative newcomers to the sector like Russia and Iceland will increasingly make their mark on the overall supply.
However, the arrival of coronavirus has presented the industry with considerable uncertainty, especially the Norwegian producers that export great volumes, he said.
“First and foremost, it takes away a number of occasions where consumers would or could have chosen to eat salmon. What’s key here is the out-of-home consumption. This is where it hurts most, and the markets are very different in terms of their potential loss,” Nystøyl said.
In terms of out of home (OOH) salmon consumption, Kontali has estimated the share of 2019’s top 50 to 60 salmon markets in terms of how they stand to be affected by the epidemic, finding that the impacts vary from less than 20 percent to more than 90 percent.
“China, where it all started, is predominantly out-of-home, as are many other Asian markets,” Nystøyl said.
The analysis confirmed that Asia around 21 percent of the global out-of-home consumption of the fish.
Nystøyl said that while no one knows where or when the situation will end or start to normalize, Kontali has put together some scenarios to ascertain which salmon-exporting nations are likely to be most affected and how much product will need to be redirected to other markets.
Assuming that its harvest forecast of 2.6 million MT is correct, and that COVID-19 remains predominantly in Asia, then all other markets will need to increase their salmon buying by an average 10 percent this year.
However, another scenario where more markets are affected by coronavirus, including Europe, the Middle East, and Asia, will require the remaining markets to compensate by raising their annual consumption by 22 percent.
“I think both of these scenarios are pessimistic, but who am I to know,” Nystøyl said. “Let’s hope later – in March and April – there will be some normalization in some regions.”
He said the salmon supply chains have achieved strong annual growth in the past, with world consumption growing by 21 percent in 2012, for example.
“So regardless of scenarios, it’s doable. It’s also a resilient product. So perhaps this is also an opportunity to get some rapid growth in the online retail sectors in those markets that are seriously affected,” Nystøyl concluded.
Photo courtesy of TY Lim/Shutterstock
