Salmon, January 2009
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Speculations about sharp reductions in 2009 salmon production
The farmed salmon market is dominated by speculation about 2009 and whether
the reduction in Chilean production will reduce total global supply and
therefore push prices higher than today’s levels. In 2008, supply has increased both from Norway and Chile,
but in the case of Chile mainly because of
accelerated harvesting of fish with the result that 2009 output will be much
less than forecasted previously. Norway’s production in 2009 will continue to grow along with
that of the UK and the Faroe Islands.
Higher prices forecast
The overall market for salmon in 2009 is expected to be positive with
moderately higher prices due to the expected shortfall in Chilean supply. Salmon
sales have previously shown to be resilient in difficult times and with an
estimated income elasticity estimated at around 1, sales are expected to hold
up relatively well next year. Overall demand is expected to increase by about
5%. 2010 however could be difficult for producers if the Chilean production
comes back on stream.
The big question is therefore what will happen in 2009. Most analysts
forecast much stronger supplies from Norway
as well as from Scotland
and the Faroe Islands.
Chile's
production is expected to fall drastically in 2009 as a result of disease
outbreaks and accelerated harvesting in 2008. World demand is expected to
grow only moderately next year at around 4-5%. Depending on the amount of
production coming out of Chile
in 2009, the net result on supply could be a slight decline with prices
firming as a result from today's levels.
Norway
Norway’s export volumes in 2008 of both salmon and
trout continued to grow from last year although export values were only slightly
up. Trout volumes in particular showed good growth from 2007. Of interest is
that a larger share of Norway’s
exports now are represented by fresh salmon whereas frozen round salmon and
frozen fillets were both down.
Norwegian export statistics up to November 2008 show unchanged average prices
from last year at NOK 24.90/kg. Both volumes and values were up by the same
figure, 2.3% compared with the first 11 months of 2007.
On the positive side for Norwegian exporters was also the abolishment in July
2008 of the EU minimum import price regime.
The EU continued to grow as a market for Norwegian salmon, up 4.5% in volume
and 3.6% in total value. Both France
and Poland are showing
strong growth in their imports from Norway
whereas Denmark
is declining as a result of the transfer of its processing facilities to
Eastern and Central European countries. Russia
and the Ukraine are also
showing significant growth together with the much smaller markets of Romania and Bulgaria. Both Japan and US imported
less salmon from Norway
in 2008.
The industry outlook for Norwegian exports in 2009 is fairly positive, in
part due to problems in Chile,
its main salmon competitor. But competition from new players and products
such as Viet Nam’s pangasius
fillets is felt keenly, even in the domestic market.
Chile
Chile’s export volumes in 2008 show good growth but
in reality, the main reason for the increase is accelerated harvesting of
fish which was planned to be harvested in 2009 at higher average weights.
This means that the fish exported in 2008 was also at lower average weights
than before and this is one of the reasons why average prices form Chile’s exports fell significantly compared with
2007. The resulting loss of growth will hurt Chile’s
producers in 2009 with a projected decline in
production next year of dramatic proportions.
Japan is Chile’s major market followed by the US whereas its neighbouring
countries in South America have overtaken Europe
as Chile’s third largest market in volume. The EU is
still Chile’s third largest market measured in
value due a larger share of processed products.
Markets
USA
After many years of steady growth, the US market for imported salmon
declined slightly in the first nine months of 2008 although fresh fillets
still showed an increase. Chile
is by far the dominant supplier followed by Canada.
Japan
After many years of weaker salmon sales, Japan’s salmon and trout imports in 2008
have been rising somewhat compared to previous years. Chile’s exports of trout and salmon to Japan rose 8%
in volumes but fell 8% in value. On the other hand, Norway’s
salmon exports to Japan in the 11 months of 2008 fell in both
volume and value, by 17 and 11% respectively, although Norway is a much smaller player in the
Japanese market than Chile
which is dominating all segments: trout, Atlantic salmon and coho salmon markets.
The conclusion must be that the Japanese market is able to consume more
salmon and trout, given the right price.
Europe
Demand for salmon in the EU is still good. Norway’s exports to that market grew from 460,000 to 481,000
tons (round weight equivalents) in the first 11 months of 2008, or 4.5%. France is by far the largest taker
of Norwegian salmon followed by Poland
which has overtaken Denmark.
Denmark has fallen back as
an importer and processor as continental smokehouses have migrated to Poland from Denmark,
Germany, Belgium but also France
and Italy.
Russia and the Ukraine are
also showing good growth as markets for Norwegian salmon in 2008.
France
As for other seafood products, French salmon imports have increased in 2008. However,
the French consumer’s
mood appears to be changing for the worse so 2009
will probably see a stagnation in salmon sales
compared with 2008.
Germany
Germany’s total salmon imports declined by almost 9 %
over the first three quarters in 2008: the main decline was for fresh whole
salmon whereas smoked salmon imports grew and fillet imports were fairly
stable. One of the reasons why smoked imports are increasing
is the outplacement of most of the German smoking industry to neighbouring Poland.
Outlook
Regarding the salmon supply situation in 2009, the forecast goes to a
substantial growth in the European production and a massive reduction in Chile, with
the net result being a decline, although the extent is uncertain due to the
increasing severity of the Chilean problem and the range of production
estimates available.
In Chile ISA outbreaks could cause production in 2009 to fall by as much as
40-50%, a reduction from 375,000 to about 220, 000 t. according to the
various estimates.
In 2009 Norway
will grant 65 new salmon farming licenses resulting in new capacity of 7%. 5
of the licenses will be for organic salmon. This new capacity will of course
only come on stream in 2010 or 2011.
Report prepared by Audun Lem
© FAO GLOBEFISH
2009
