The recent trade ban from Russia could lead to a net loss in global demand for salmon, along with a reshuffling of salmon distribution from Norway and Chile, according to one analyst.
Gorjan Nikolik, a senior analyst for Rabobank, stressed that details regarding the new trade sanctions are emerging by the hour, but at the moment it seems clear based on the state of the markets over the past 12 months that Chile will have a chance to capitalize, while Norway could face its biggest redistribution challenge yet.
Russia consumed 133,000 metric tons (MT) of imported salmon over the past year, representing about 8 percent of the global market. No matter what happens to supply,
“Overall, it’s a net loss,”
Norway is by far the country that will suffer the most — it supplied 75 percent, approximately 100,000 MT of farmed salmon, to Russia in the past year — with 8 percent coming from the EU and 17 percent, about 27,000 MT, coming from Chile.
Since Chile was not named in the trade ban,
So where would all that salmon go? The obvious choice is the EU, but the United States is a good possibility too. Right now,
Fortunately, Norway has a history of success with reshuffling, first to compensate in North America for the loss of product from Chile back during the Infectious Salmon Anemia crisis, and again in 2010 after Norway issued the Nobel Peace Prize to Chinese dissident Liu Xiaobo, hurting exports of Norwegian seafood to China. While none of those difficulties demanded as much of a restructuring as the Russian trade ban could,
“I think this industry has very good logistics,” he said.
Despite the hit to global demand,
“That’s not going to happen next year,” he said.
As a result, analysts have expected salmon prices to top NOK 42 (USD 6.72, EUR 5.03) starting this fall and into 2015, according to the 2015 future salmon price from the Norwegian commodity exchange Fishpool. If demand drops due to the Russian trade ban,
“That tight situation will now be slightly less tight,” he said.
Keep checking SeafoodSource for all the latest news on Russia’s ban on seafood exports