For decades, the Norwegian aquaculture sector has served as the benchmark for global salmon farming, but according to new Rabobank analysis, the industry's most compelling growth story may be taking place 13,000 kilometers to the south.
Rabobank’s new report, “From Crisis to Competitiveness: The Re-rating of Chilean Salmon,” states that Chile's salmon sector “has never followed a linear path” and has, instead, been shaped by “alternating phases of exuberant expansion and abrupt correction.”
While the sector was expanding on paper, increasing volumes and exports “masked a growing fragility,” according to the report, with governance frameworks and biosecurity systems unable to keep pace.
Now, though, the nation’s aquaculture sector is experiencing improving biological performance, supportive political momentum, and expanding production, ushering in a period in which annual Atlantic salmon production could expand by up to 6 percent.
Thanks to favorable water conditions, producers are also able to harvest increasingly larger fish, with average weights now exceeding 5 kilograms.
Even as the industry is set to grow, Rabobank Global Seafood Analyst Gorjan Nikolik told SeafoodSource he believes strong Chilean expansion is unlikely to destabilize the global market.
"The opportunity is significant, but it should not be interpreted as unconstrained growth. Important constraints remain, and we do not expect an oversupply situation in the near term." Nikolik said. "Chilean growth of 4 to 6 percent is possible, while the rest of the world is likely to grow in the range of 1 to 3 percent. This still means global supply growth will remain below historical levels. We do not expect a situation of oversupply in the near term because important constraints remain in Chile, too."
Instead, he said he expects demand growth to continue absorbing additional production without triggering structurally lower salmon prices.
Rabobank particularly highlighted that the political landscape in Chile has become a key driver of competitiveness and has begun to change investor perceptions of the country, potentially leading to an upcoming influx in capital.
The report pointed to the election of President José Antonio Kast late last year as possibly marking a turning point for the sector, as he has promised to streamline permitting, concession relocations, and efforts to reduce regulatory bureaucracy.
According to Rabobank, these reforms could lower Atlantic salmon production costs by between USD 0.30 and USD 0.50 (EUR 0.26 and EUR 0.43) per kilogram while providing producers with greater certainty over future investments.
Still, the report explained much will depend on how quickly and effectively the proposed reforms are implemented.
"Strong and more consistent biological performance needs to be coupled with clear, supportive government policy," Nikolik said. "This will result in more predictable growth with good profitability. All of these should inspire increased investor confidence and more capital availability in the sector."
Another of the report's key findings is the rising commercial importance of coho salmon.
This fish, the report said, was historically viewed as a niche or secondary species and was largely destined for Japan, but it has become more widely recognized as possessing several biological advantages, including being naturally more resistant to sea lice, being capable of reaching harvest size in less than a year, and enjoying lower mortality rates than Atlantic salmon.
The species also costs approximately 30 percent less per kilogram to grow than its Atlantic cousins, while early data from 2026 indicates that average weights have risen to match Chilean Atlantic salmon.
At the same time, export markets for coho are diversifying rapidly beyond Japan into North America, Europe, and Latin America.
Nikolik said this expansion will complement rather than come at the expense of Atlantic salmon production.
"Some sites and regions where Atlantic salmon is struggling due to lice pressure will be converted to coho. Many companies are doing this, but they are also finding new ways to expand Atlantic salmon supply," he said, adding that maintaining coho's premium positioning will be critical to production increases. "The Chilean producers do not want to position coho as a discount salmon, so growth will depend on the price they can achieve and how quickly new markets are developed."
Despite the report's optimistic outlook, Rabobank identified biological performance as the single greatest threat to Chile's continued progress, with the report advising that a developing El Niño weather pattern, together with ongoing risks posed by harmful algal blooms and other climate-related events, could quickly undermine production performance.
"Biological cost drivers are the main risk factor and the key variable that can undermine the optimistic scenario," Nikolik said. "With a strong El Niño condition dominating the second half of 2026, this is especially concerning for the near term."
Nevertheless, he said the industry's longer-term trajectory remains encouraging.
"What we observe is a clear long-term improvement pattern in Chile when it comes to biological performance," he said. "However, it is not a straight line, and there will always be volatility. It just seems it’s now more under control."
