Farmed salmon prices have stayed high and trended up in all markets throughout this year due to the reduced volumes available. While there may be some price easing in the coming few months as supplies increase, strong underlying demand and declining production growth will inevitably drive prices up again in the latter stages of this year and into 2017.
Traditionally, the salmon market experiences a seasonal drop in prices in the third-quarter and then an increase in the final quarter. According to Alf-Helge Aarskog, CEO of Marine Harvest, who last week announced a record operational earnings before interest and taxes (EBIT) for Q2 2016, this year should follow that same pattern. And yet, he underlined that with the global farmed salmon supply expected to diminish by 6 to 8 percent this year, the future price for the next 12 months has increased to EUR 6.40 (USD 7.22) per kg.
Aarskog endorsed Kontali’s forecast that there will be a 3 percent production growth in 2017, largely driven by increased output from European production regions. However, he pointed to global demand growth of 7 to 8 percent.
In Europe, key markets like the United Kingdom, Germany and southern countries have continued to demonstrate strong demand despite the high prices, while Asia has shown strong growth this year – further tightening the market balance, he said.
Overall, the salmon industry is forecast to produce around 1,936,000 metric tons (MT) of salmon this year, down from 2,083,000 in 2015. The decline has been led by the two biggest producers – Norway and Chile – who have both suffered biological challenges in 2016.
