Chile’s salmonid farming industry is still coming to terms with the deadly algal bloom that so far caused the deaths of around 25 million Atlantic salmon, coho salmon and trout in southern Chile, with many of the leading production companies in the region affected. While no one can be certain at this early stage, it’s widely felt that the event could cost the industry around USD 800 million (EUR 716.1 million) in lost trade this year.
The South American country harvested more than 721,000 metric tons (MT) of salmonids last year, including 609,000 MT of Atlantic salmon. This sector was already expected to reduce its output by around 10 percent this year due to farms deciding to stock less biomass in attempts to improve profitability. Now, following the algal event, its 2016 volume can be expected to be significantly lower. Subsequently, Chilean salmon prices have soared this month. As the country’s main market, the United States will be the most affected, and prices quoted in Miami last week were 25 percent higher year-on-year at USD 5 (EUR 4.48) per pound.
A lot now hinges on how quickly Norway can react to fill the voids in the market. Although it should be remembered that Norway has struggled with its own significant biological problem this past year, namely sea lice, and its own total production is expected to reduce slightly in 2016. Markets should therefore be prepared to pay more for Atlantic salmon, as global production will most probably not increase for at least another two years.
