Norway’s Atlantic salmon farming industry is enjoying another stellar year and is on course to set a new record for export value thanks to increased output and sustained high prices.
In the first-half of 2014, the Scandinavian country exported 389,771 metric tons (MT) of whole fresh salmon, an increase of 8.5 percent year-on-year. At the same time, the average price increased to NOK 43.56 (USD 6.99, EUR 5.21) per kilogram (kg) – up from NOK 38.38 (USD 6.16, EUR 4.59) in the first half of 2013.
The EU is the most important market for Norwegian whole fresh salmon, with imports of 285,824 MT in the first six months of this year, an increase of 12.8 percent. Within the EU, Poland was the No. 1 market with imports of 52,261 MT, followed by France with 43,229 MT.
In addition to whole fresh salmon, Norway also exported 35,458 MT of fresh salmon fillets and 16,816 MT of frozen salmon fillets in the first half of 2014, representing year-on-year increases of 10 percent and 9 percent, respectively. France was the largest market for fresh salmon fillets with imports of 8,525 MT, followed by Poland with 5,395 MT and the United States with 4,625 MT. It should be noted that U.S. imports of Norwegian salmon during this period increased 175 percent and saw that market leapfrog Japan in terms of imported volumes.
In total, Norway’s salmon exports achieved a value of NOK 21.5 billion (USD 3.5 billion, EUR 2.6 billion) in the first half of the year, an increase of 24 percent or NOK 4.1 billion (USD 658.9 million, EUR 490.3 million) year-on-year and the sector’s highest export value for the first six months of any year.
With no slowdown anticipated in the trade, the industry is set to eclipse its 2013 performance when exports achieved a record value of NOK 39.8 billion (USD 6.4 billion, EUR 4.8 billion), 35 percent higher than the previous year. That total was reached with 960,000 MT of products and an average export price of NOK 39.74 (USD 6.38, EUR 4.75) per kg, which was 44 percent higher than the average for 2012.
Norwegian salmon prices dropped by a few krone at the end of July, which is the usual trend for the industry, coinciding with the country’s main holiday month. However, the future price for fresh fish weighing 3-6 kg in August is NOK 37 (USD 5.95, EUR 4.42) and NOK 37.90 (USD 6.09, EUR 4.53) for September. Looking further ahead, analysts are forecasting supplies to remain tight for the foreseeable future, particularly as the Norwegian government recently took the decision not to issue any new licenses until 2017. They therefore, expect the average price for Norwegian salmon to be NOK 42 (USD 6.74, EUR 5.02) per kg in 2015 and NOK 41 (USD 6.58, EUR 4.90) in 2016.
If there is one chink in the industry’s armor, it’s that in recent years the cost of salmon farming has increased by an average of NOK 4 (USD 0.64, EUR 0.48) per kg as fish farmers contend with biological challenges such as sea lice infestations and outbreaks of the amoebic gill disease.
From a global perspective and barring any production disasters, salmon buyers shouldn’t anticipate any dramatic changes in the sector as global production is expected to only grow slightly this year to just under 2.1 million MT and then by a further 3 percent next year.
The global market for Atlantic salmon is currently valued at around NOK 70 billion (USD 11.2 billion, EUR 8.4 billion).
