The overall supply of farmed Atlantic salmon will grow by very little this year, and paired alongside rising demand for the product, this trend will keep average market prices at a high level of around EUR 6.50 (USD 7.14) per kg over the next 12 months, according to Marine Harvest CEO Alf-Helge Aarskog.
Delivering the Norway-headquartered producer’s first-quarter 2017 results, Aarskog confirmed that overall, the global farmed salmon supply in the last quarter fell by 4.2 percent or 20,500 metric tons (MT) year-on-year to 470,600 MT – largely as a result of a 17.1 percent or 24,700 MT decrease in the volume produced by Chile, which amounted to 119,500 MT. Conversely, the salmon supplies from Norway, Scotland and Australia were slightly higher than a year previously.
Prices in Q1 2017 remained strong, confirmed the company’s CFO Ivan Vindheim. Indeed they were at record levels in the Americas, averaging USD 6.18 (EUR 5.63) per kg, up around 10 percent compared with Q4 2016 and 40 percent higher year-on-year. In Europe, meanwhile, prices “were stable at a very decent level” of EUR 7.27 (USD 7.98) per kg.
In terms of consumption, the total salmon volume into Europe in Q1 2017 fell by 8.7 percent to 238,100 MT, while the supply to the Americas totaled 143,900 MT and 62,500 MT went to Asian markets, representing year-on-year declines of 6.9 percent and 3.3 percent respectively. The total global supply in the quarter amounted to 471,800 MT, down 6.6 percent year-on-year. In value terms, however, salmon spend was up in all markets in the quarter, said Vindheim.
For 2017, Marine Harvest expects there to be positive but low volume growth – between 1 percent and 5 percent – with a best-case global production of 2,041,000 MT. Vindheim believes that 2018 will also only see modest growth while the industry continues to contend with biological issues.
“The supply-demand balance looks favorable from a price point of view,” he said.
Marine Harvest’s own production guidance for 2017 is 403,000 MT, up 6 percent. Of this, Norway is forecast to contribute 242,000 MT, Chile 45,000 MT, Canada 42,000 MT and 59,000 MT will come from its Scottish operations.
Despite a drop in the volumes that it harvested, the all-time high salmon prices saw Marine Harvest achieve a record first-quarter operational earnings before interest and taxes (EBIT) of EUR 220 million (USD 239.1 million) in the opening three months of this year, almost doubling the EUR 112 million (USD 121.7 million) posted in the corresponding period of 2016.
