In the first week of September, the price of frozen H&G Atlantic salmon at Tokyo’s Tsukiji Wholesale Market ranged from JPY 750 to 800 per kilogram (USD 9.56 to 10.19 per KG), a rebound from recent lows of around JPY 700 in late June.
Rapid weight gains of Norwegian Atlantic salmon due to warm water temperatures had caused a glut that led to the June price decline. Global salmon production was up 30 percent in the first half of 2012 leading to a dramatic price drop of 35 to 40 percent.
The current price recovery in Japan is due to a decrease in Chilean imports and lower domestic landings, and is likely temporary.
On 4 September at Tsukiji, salted Chilean coho (silver) salmon filets averaged JPY 473 per kg, while frozen H&G coho ran from JPY 368 to 441. This was up from a bottom of around JPY 350 for coho in early August.
There is a considerable price difference between Atlantic salmon, which are favored for their fattiness, and coho. However, farmed Chilean salmon-trout (steelhead) have proven popular as a sashimi item this summer. Since the 2011 earthquake, Chilean coho (silver) salmon has been imported in large quantities. Chile switched much of its production to coho, as they are immune to infectious salmon anemia (ISA).
Meanwhile, the volume of farmed salmon production in Japan, which is mainly coho, has decreased year-on-year. Major farming prefecture Miyagi wrapped up harvesting for the season on 9 August, reducing domestic supply, and the wild catch also looks to be light this year.
On 27 August, harvesting of autumn chum salmon began in eastern Hokkaido. The catch was down from the previous year, sending sales prices higher at the Sapporo Central Wholesale Market. The average price for females was JPY 500 to 600 per kg (USD 6.37 to 7.65), and JPY 400 to 500 (USD 5.10 to 6.37) for males. Strong roe prices account for the difference. It was a slightly higher-than-usual starting price. Supermarkets are offering silver salmon fillet slices at around JPY 200 per 100 grams. Landings usually reach a peak in late September.
Despite the upturn in salmon prices in the Japanese market, the glut of farmed product is likely to continue. Chilean grow-out pens are holding biomass similar to that before the country was hit with ISA. The heavy supply should keep prices low.
Ratings agency Fitch has warned of reduced margins for Chilean salmon farms, and Norwegian companies have reported reduced second-quarter earnings due to low prices.
Farming operations are expected to face tighter margins as feed prices strengthen. The U.S. drought has driven up grain prices, including the soybeans used in feed. The drought has wiped out 45 percent of the corn and 35 percent of the soybean crop in the worst harvest since 1988.
Meanwhile, Peru has tightened catch limits of industrial fish like anchovy, leading to higher fishmeal and fish oil costs. After two years of declining prices, fish oil increased from USD 1,500 per metric ton (MT) at the beginning of the year to USD 2,000 per MT in August, while fishmeal jumped from USD 1,300 per MT to a record USD 1,700. The price is rising not only because of growth in fish farming, but also because livestock farmers are substituting fishmeal for grain in animal feed as corn has become too expensive.
With so much salmon on the market, it may be difficult for fish-farming companies to pass on the expense to consumers.
