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Salmon, EU - July 2007
General overview and price trends
The EU salmon market is dominated by imports of fresh, whole (gutted)
products, mostly from Norway, imports of Norwegian fresh salmon representing
nearly 70 percent of total EU salmon imports from non-EU countries. In
January-June 2007 Norway exported 238 600 tonnes of fresh salmon to the EU
(live weight), a 19 percent increase from the same period of the previous
year.
As reported by the past year’s issues of the European Price Report (EPR),
fresh salmon prices from Norway declined from the peak of €6.00/kg in June
2006 to the current level of €3.35/kg. Despite the decline, prices are still
maintaining profitable levels. However, they are expected to decline further
in the coming weeks, possibly going below the EU-imposed minimum price (MIP)
of €2.80/kg.
The decline of Norwegian salmon prices can be attributed to an increasing
supply: production of farmed Atlantic salmon in Norway managed to reach 600
000 tonnes in 2006. More recently, Norwegian producers marketed an increasing
number of smaller (hence, cheaper) fish in order to prevent exposure to a
pancreatic disease recently reported in southern Norway. This has led to
smaller fish coming to market now, but could lead to an overall reduction in
supplies over time (as the slaughtered fish could have reached 3 to 4 kg
towards the end of the year).
France
Salmon is one of France’s favourite seafood categories – in 2006, fresh
salmon was the main seafood import product in the country. However French
imports declined by 4 percent in the first four months of 2007 as opposed to
the same period in the previous year. French supplies of salmon are dominated
by whole fresh product from Norway.
On 1 May 2007, The Kritsen and Pan Fish companies, both located in the Finistère
département, merged to give rise to Marine Harvest Kritsen. This new,
salmon processing company (owned by Marine Harvest Norway, producing smoked
salmon and other value-added salmon products) is expected to generate a
turnover of more than €100 million in 2007, with three factories and 800
employees. It will rank first or second on the salmon market in France.
The French salmon market relies on the presence of strong brands and on a
high degree of product diversification (wide range of pack weighs, organic
salmon, quality labels, smoked salmon cubes etc.). The recent Kritsen-Pan
Fish merging is expected to lead to further innovations and stronger brands.
Germany
German salmon imports declined, in quantity terms, from 22 500 tonnes in
January-March 2006 to 21 700 tonnes in January-March 2007. However, in value
terms, they increased from €112.9 million to €121.8 million in the same
period. The increase in average unit values reflected an increase in imports
of salmon fillets from Chile.
Germany is the main importer of
smoked salmon within the EU, with 4 400 tonnes imported in January-March
2007. The main supplier of smoked salmon to Germany is Poland. Imports of
smoked salmon from Poland are expected to increase further in the months
after May 2007, when the German salmon processing company Laschinger was
taken over by the Polish Morpol. With two production plants in Poland and one
in Germany, jointly processing approximately 60 000 tonnes of fish per year,
Morpol and Laschinger are expected to generate a turnover of approximately
€300 million.
German consumers are
traditionally believed to be price-conscious. However, they are also willing
to pay premium prices for environmentally and socially responsible purchases.
The market for organic salmon in Germany is growing rapidly and the Marine
Stewardship Council’s eco-labelled wild salmon from Alaska is currently being
marketed by Lidl, one of the largest retail chains in Europe.
Italy
Consumption of salmon in Italy is rather low as opposed to other fish
species, and compared to other markets as the Italian consumer continues to
prefer whitefish from the Mediterranean (such as seabass and seabream) to
coldwater fish species. Furthermore, whilst most fish species are
traditionally consumed mainly in the summer, in southern Italy and along the
coast1, salmon is mainly consumed in the north and in big cities. Finally,
smoked salmon on toast is one of the favourite hors-d’oeuvre at the Christmas
Eve dinner in Italian homes.
Italian imports of salmon are mainly represented by whole gutted fresh
product, even if considerable quantities are also traded in smoked and
filleted form. In fact, up to 2004 Italy used to be the main importer of
smoked salmon within the EU, but its leading role was taken over by Germany
in 2005. The reason for this was that the Italian smoking capacity is low and
therefore consumption relies on imports of smoked products, and that Germany
now has outsourced most of its processing. The main supplier of (mainly
fresh) salmon to Italy is Norway (through Denmark and Sweden). Denmark is the
second biggest supplier of smoked salmon to Italy after France, mostly based
on Norwegian raw material. Approximately 1 000 tonnes of smoked salmon per
year are produced domestically in Italy, against 7 000 imported tonnes per
year. Domestic production is mostly aimed at the top end retail segment such
as luxury delicatessen shops and up-scale supermarkets.
Spain
Spanish salmon imports (mainly consisting in fresh whole product) declined by
4 percent in volume and 3 percent in value in January-March 2007 as opposed
to the same period in 2006. The Spanish market is quite similar to the
Italian one in terms of its conservativeness and preference for unprocessed
Mediterranean whitefish. Only in March this year, some smoked salmon-based
ready-meals have been launched for the first time by the Spanish smoked fish
and cod specialist Copesco & Sefrisa.
Outlook
At present, the EU market is currently well supplied with increasingly
cheaper fresh salmon from Norway. Should the MIP price be enforced against
Norwegian suppliers, they are expected to find it more expensive to enter the
EU market in the coming months, because of the punitive duty applied when
prices would fall below the MIP level. This situation would favour Chile and
especially EU suppliers such as the UK or Ireland. The latter supply the EU
market with a product which is sometimes perceived as of a better quality yet
more expensive than Chilean and Norwegian products. Therefore, EU consumers
may face the prospect of paying artificially higher prices if they want to
purchase salmon.
Even if the MIP is aimed at protecting EU salmon producers, its removal may
not necessarily mean the end of the EU salmon industry, which in any case is
now mostly owned by Norwegian companies. In fact, as the French market shows,
the range of salmon products is becoming increasingly diversified, therefore
maintaining the niche for upmarket salmon and salmon preparations from EU
countries as well as eco-labelled wild salmon, value-added products, fillets,
smoked salmon and canned salmon.
In 2007, production of salmon in Norway is projected to increase from 2006
levels, possibly slowing down in the end of the year due to the current
premature slaughtering of young fish (which would have reached 3-4 kg each
around Christmas). Should the Chilean authorities be able to tackle
effectively the lice disease, Chilean production would be projected to
increase by 7 to 10 percent from 2006 levels.
News
Norway: double the money investing in salmon
According to the to a 20-page report made by Norwegian stockbroker firm
Pareto, the operating margin (EBITDA, Earnings Before Interest, Taxes,
Depreciation and Amortization) is four times higher in the salmon
industry than what it is for comparable protein producers. The salmon
industry is a fast growing one while the production of animal proteins has a
very slow growth rate. Since 1990 production of farmed salmon has been
growing at an average 10 per cent annually. Global salmon consumption stands
at around 2.5 million tonnes, of which 60 per cent is farmed salmon. Large
companies in the wild salmon sector have now invested in salmon farms. The
conclusions of the report seem to point to investing in salmon shares to
double the investor’s money.
Russia stops Chilean salmon imports, imports of salmon from Norway
recovering
Russia has ordered a halt to seafood imports from a number of Chile-based
companies over alleged paperwork falsification. Behind the ban are the same
veterinary authorities that in 2006 placed an import ban on Norwegian salmon.
The two countries are working to introduce a new system that will make it
harder to falsify certificates and other documents. The Chilean trade attaché
invited Russian inspectors to examine the Chilean salmon industry. The
Russians are keen to learn how Chilean salmon farmers run their operations,
and to familiarize themselves with value-added processing and transporters in
that country.
Russian imports of salmon from Norway declined from 54 300 tonnes in 2005 to
37 500 tonnes in 2006 (live weight figures), due to a partial import ban
enforced from early 2006 on health and safety grounds, as Russian inspectors
claimed to have found residues of heavy metals in Norwegian salmon
consignments. As the ban was lifted for a larger number of companies, imports
of Norwegian salmon started increasing again: in January-June 2007, they
reached 24 600 tonnes as opposed to 14 600 tonnes imported in the same period
of the previous year. Interestingly, the 2006 ban on salmon imports was
accompanied by an increase of Russian imports of Pangasius catfish
from Vietnam, which reached 42 800 tonnes in 2006 against the mere 3 000
tonnes imported in 2005.
by Camillo Catarci
© FAO GLOBEFISH 2007
Footnote:
1 However, the modernization of the Italian food distribution channel has
increased fish sales all over the country with more than 50 percent now being
sold through super and hypermarkets.
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