Norway salmon prices hit highest levels for 30 years

Spot prices for farmed Norwegian salmon have leapt dramatically to the highest levels in 30 years.

Norwegian salmon news site iLaks.no reported earlier this week that salmon had begun to go for NOK 70 per kilogram, and prices have continued rising on Jan. 8, with buyers purchasing for next week.

A salesman at a northern Norwegian farmer put prices, freight on board (FOB) at:
NOK 58- 61.5/kg for fish sized 2- 3kg; NOK 62- 63 on 3- 4kg; NOK 63- 64 for 4- 5kg; and NOK 66 for 5- 6kg.

"6 kg we have sold very little, a few hundred boxes, at NOK 72 to Europe," he said. "Early next week, fish are sold at this level. Monday and Tuesday we are completely sold out at this level."

Last week, Dec. 30, prices were lower at: NOK 57 for 3- 4kg; NOK 58 on 4- 5kg; NOK 59 for 5- 6kg.

Kolbjorn Giskeodegard, director of seafood for Nordea, reports prices even higher: NOK 63- 67 for 3- 6kg and NOK 70- 75 for 6kg .

"Driven by low availability and weak NOK, salmon prices have continued up during the week," the analyst wrote. "We are now seeing one of the highest weekly prices ever coming up."

"The biomass situation is challenging as the volume available for harvesting over the next six months are substantially lower than last year. In addition, extreme changes in temperatures in Norway are coming. Air temperatures have dropped 15-20 degrees since late December, and the outlook for the next weeks are very cold. We do expect this to have a negative impact for the on-growing as from February."

Lower sea temperatures are expected to negatively influence feed sales and on-growing of salmon. Hence, a tighter supply situation in H1, 2016, he said.

"There is a desperate battle out there," said this farmer, calling losses "formidable" for major processors in Eastern Europe, knowing the contracts they have with the German supermarket chains.

"They can not take many weeks at this level. Even at a moderate rate, this is tipping over the €7/kg mark delivered on the continent." He does not believe these extremely high price levels can last long.

In the fall of 2015, many salmon were harvested because of the prevalence of sea lice in pens, and sources at the time warned this could lead to a shortage of fish before long. "This could have had its impact in December; it did not, therefore the effect is even stronger," noted iLaks' source.

An exporter in western Norway recognized this price picture.

"It is a very big leap in the pricing here. Prices in the south are as much as NOK 55- 56 for 2- 3kg; NOK 62 for 3- 4kg; NOK 65- 66 on 4- 5kg; NOK 66- 68 for 5- 6kg; and NOK 73 on 6 kg."

"This price picture is so strong that there are reports of extra fish being slaughtered. This suggests supply will increase slightly next week. Some industrial companies are beginning to lay off and halt their production. Some say it is a better business to pay a penalty to its customers than to process," he said.

The average spot price in 2015 was NOK 40.4, which was 1.5% higher than in 2014, Giskeodegard noted. As the NOK suffered a 13% trade-weighted weakening in 2015, customers enjoyed a price decline of over 11% on average compared with 2014. "We believe this has been a major demand stimulus, resulting in higher price forecasts for 2016."

Resource: "https://www.undercurrentnews.com"