While the United States and France will continue to be the largest markets for Scottish farmed salmon, China is expected to become another major destination as Scottish producers chart their growth for the next decade.
Earlier this year, Scottish salmon producers outlined a plan to increase production 4 percent annually, from 144,000 metric tons in 2010 to 210,000 metric tons by 2020.
In January, an agreement was signed with China allowing Scottish salmon into the country for the first time, and with a growing Chinese economy and purchasing power of a rising middle class — and with Chinese salmon consumption already at 150 percent of total Scottish production — China will emerge as a major market for the world’s third-largest farmed salmon producing region.
How major? Even if only 1 percent of the Chinese people decided to try Scottish salmon, production would have to double, one producer said earlier this year.
“Everyone I speak to on the production side — I don’t get any inquiries from China, we ship to Japan but we don’t have any inquiries from China or the Russian market — says it’s just a matter of price. You hit a certain price point with either of those markets and it’s instant business,” said one U.S.-based CEO whose salmon business consists mainly of Scottish product.
“I think probably the way they look at it is, if the price gets to that point it’s just their decision if they want to move into that market. It’s kind of in their hip pocket, so if they don’t know where they’re going to go with their fish, and all things fail they’ll just go straight into that Russian or Chinese market.”
While China looms on the horizon, the United States and France will remain the predominant markets for Scottish salmon, says an executive from one producer’s group.
“It is very difficult to predict year-on-year increases or otherwise on exports as there are so many factors that can have an impact,” said the executive.
Any extra production entering the U.S. market will impact prices, which are low now at around GBP 3.80 to GBP 3.95, said the CEO. Add to that the rising cost of feed and the additional capital expenditures it would take to add staff and equipment to grow production, some producers may not see such a beneficial situation to expanding markets.
Also, he says it will be hard to pass on any price increases to American consumers, who remain skeptical about the economic recovery and will weigh any salmon purchases against other proteins.
“I don’t think it will get passed on to consumers quite that easily. I think we’re seeing now some kind of plateaus. It’s not that there aren’t more people eating fish, it’s just indecision about what to spend your money on, and if the prices keep climbing like they were, we’re going to lose some market share to other proteins,” he said. “I would be concerned about that. I don’t think there’s a lot of price expansion to be had right now.”
