The total global harvest of Atlantic salmon will rebound from its current slump within two years before setting new record levels of production, according to Regin Jacobsen, CEO of Faroese producer Bakkafrost.
Speaking at the Bakkafrost 2016 Capital Markets Day in Glyvrar, Faroe Islands, Jacobsen estimated this year’s production would reach 1,939,000 metric tons (MT), down from 2,075,000 MT in 2015 following biological challenges in both Norway and Chile.
Presenting data compiled with analysts Kontali Analyse, he forecast the global harvest would then rise slightly to 1,980,000 MT in 2017. Output would continue to increase through the next three years, reaching 2,380,000 MT in 2020, an increase of around 20 percent compared with 2016.
Jacobsen said higher growth would be delivered by a number of factors, including lower sea lice pressure in Norway and the development of antibiotic alternatives for the control of Salmon Rickettsial Septicaemia (SRS) challenges in Chile. At the same time, the strategy of introducing larger and therefore more robust salmon smolt is taking place faster than had been anticipated.
But he pointed out that yield growth could also be slowed by the current disease and sea lice challenges.
The Bakkafrost chief also said the company was “not afraid” of the effect that a 20 percent increase in supply would have on prices as it meant only an average growth of 4 percent per year.
“This is at the lower end compared with what we have had for the last 10 years, which was more like 7 or 8 percent,” he said.
“Everything comes down to whether there are shocks from one quarter to another, or from one year to another. If there is a relatively stable development, between 3 and 7 percent growth per year – that should be quite acceptable for the market. The demand will easily see the market buy 7 percent more salmon per year.”
However, Jacobsen stressed it was crucial to the salmon industry’s growth that it has access to all markets.
“Norway currently has issues with China and Russia. Of course, that is of some concern and hopefully this will be resolved soon to ease up these markets. But also, it’s crucial Norway has open markets to develop because Norway is by far the biggest producer,” he said.
