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Salmon
and Trout - September 2007 - Chile
Chilean exports of salmon and trout during the first half of 2007
performed well both in volume and value and their share in total fishery
exports has grown. Several problems have affected the production sector, but
total production can be expected to increase further in 2007, along with
changes in the species composition of production.
Growing exports
In the first semester of 2007, Chilean exports of salmon and trout totaled
276 843 tonnes worth US$ 1 284.9 million. These levels represent a 18.7% growth in terms of volume and a 24% increase in
value compared to the same period in 2006. At the same time, the value figure
accounted for 63.9% of the total income from Chilean exports of fishery
products. This share has grown in the last few years, as can be observed in
the tables below, and the trend is the same when we compare the period
between January and June in 2006 and 2007. As for the volume, the share also
grew between both periods, but in the last few years the trend is not as
clear as that for value. The cause is not a fall in production but a
corresponding increase for other products.
Chilean exports of salmon and trout during the first half of 2007
performed well both in volume and value and their share in total fishery
exports has grown. Several problems have affected the production sector, but
total production can be expected to increase further in 2007, along with
changes in the species composition of production.
Growing exports
In the first semester of 2007, Chilean exports of salmon and trout totaled
276 843 tonnes worth US$ 1 284.9 million. These levels represent a 18.7% growth in terms of volume and a 24% increase in
value compared to the same period in 2006. At the same time, the value figure
accounted for 63.9% of the total income from Chilean exports of fishery
products. This share has grown in the last few years, as can be observed in
the tables below, and the trend is the same when we compare the period
between January and June in 2006 and 2007. As for the volume, the share also
grew between both periods, but in the last few years the trend is not as
clear as that for value. The cause is not a fall in production but a
corresponding increase for other products.
Nonetheless, a sustained growth of exports of salmonids can be observed in
the last four years, both in volume and value terms. Between 2003 and 2006,
the exported quantity grew 40.8%, and the value of sales to foreign markets
had a remarkable growth of 93.9%.
Production: change in the composition and negative shocks in 2007
The annual production of salmonids in Chile has
grown throughout the years, as can be observed in the chart below. In 2006,
the production of the three most important species reached 643 941 tonnes,
which represented a 4.8% growth when compared to the 614 144 tonnes
registered in 2005. Between 1995 and 2006, Chilean production of Atlantic
salmon, rainbow trout and coho salmon grew at a 14.8% average annual growth
rate. The main species is Atlantic salmon (Salmo salar). However, recently,
changes in the composition of production are evident. Atlantic salmon has
experienced a reduction, and production of rainbow trout (Onchorhynchus
mykiss) and coho salmon (Onchorhynchus kisutch) has increased. During the
first half of 2007, compared to the same period in 2006, the changes for
these three species were -9.7%, +51.3% and +68.7% respectively. The performance
of production during the first semester can be observed in the dotted lines. Total
production of these species in the first half of 2007 grew 11.4% compared to
the same period in 2006.
During 2007, the salmon producing sector has received a series of negative
shocks. The first of these was the earthquake in April in the XI Region, in
the area of Aysén, causing landslides and a tsumami in the fjords. The quake
and the wave caused structural damage in 14 harvest centers and one fish
farm, although not all of them were operational at the time. The XI Region is
a very important one for Chilean salmon production. One of the most important
safety measures taken after the tremor was the restriction on navigation
inside the fjords, which had a negative effect in the industry given that the
fjords are a key connecting passage to the sea for the transportation of
production. A proposed solution for this problem is the relocation of some
aquaculture centers. Nevertheless, despite the shock of the seismic activity,
exports from the Region in the first semester might not have been seriously
affected, an may even have increased in terms of value, according to
statements made by the Regional Director of ProChile (the export promotion
office).
On another matter, several outbreaks of the ISA (Infectious Salmon Anemia)
virus have been reported. This disease had never been detected before in Chile. The
presence of the virus had only been detected until now in Norway, where
it caused very high mortality rates, even close to 100% of salmon populations
in some cases. At least 39 harvest centers had been quarantined by the end of
August due to the virus. The infections caused the mortality in centers to
increase between 11% and 12%, according to statements from the National
Director of the National Fishing Service (SERNAPESCA). Although the infection
outbreak is focused on production in the island of Chiloe, in the
X Region, the Director of SERNAPESCA stated that the salmon industry has to
work more intensively in health issues that appear as key conditions for
future sustainability.
Main
exported species and products
The main exported species is Atlantic salmon. During the first six months of
2007, exports of this species reached 101 957 tonnes worth US$ 730 million,
figures that represent 36.8% of total sales of salmonids in terms of volume,
and 56.8% of the exported value. The second species is rainbow trout, with
exports of 61 872 tonnes and US$ 309.8 million (22.3% and 24.1% share of the
total respectively). The third one is coho salmon, with 50 805 tonnes (18.4%)
and US$ 190.1 million (14.8%). The unit value of Chilean exports during the
first semester grew 4.5% compared to the same period in 2006, led by the
growth of Atlantic salmon products’ prices.
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Regarding
the different products, 65% of the exported value during the first semester
of 2007 is accounted for by frozen products, which in quantity account for
58% of the total (US$ 830.4 million; 160 738 tonnes). The second main
category was fresh products, with 27% of the exported value and 18% of the
volume (US$ 351 million; 48 819 tonnes). Categories with much lower shares
include salmonid fishmeal and fishoil (with a 10% and 12% volume share each),
smoked salmon, canned and dried and salted, which together account for the
remaining 8% of total value. As for the type of product, the most important
presentation is fillets, with exports at US$ 560.3 million and 75 273 tonnes,
followed by whole and H&G (US$ 425.1 million; 107 742 tonnes) and
thirdly, portions and pieces (US$ 186.9 million; 22 115 tonnes). The unit
value of fillets between both periods under review grew 16.1%, and the unit
value of portions and pieces grew 22.8%. The growth of the unit value of
whole and H&G was lower, +4.8%.
Inside the fillets category, the main line of sales to foreign markets is
fresh fillets. During the first half of the current year, sales of this item
reached 38 224.7 tonnes worth US$ 284.6 million (+9.6% and +23.7%
respectively compared to 2006). A breakdown of the export figures shows that
frozen whole and H&G becomes the single most important category for the
period, with sales of 98 877 tonnes worth US$ 379.6 million (+29.9% and
+34.2%).
A more detailed breakdown of the export figures shows, as indicated in the
chart below, that the main export product during the first half of 2007,
according to values, was fresh fillets of Atlantic salmon. This item
registered exports at 36 946 tonnes worth US$ 280.8 million, which represents
an increase of 7.7% in volume and 21.9% in value compared to the first half
of 2006, when exports reached 34 299 tonnes worth US$ 230.4 million. Also,
these figures show a 13.1% growth in the unit value of this product. The
second export product in terms of revenues is also the one that has the most
significant sales in terms of quantity namely whole and H&G frozen coho
salmon, with 48 177 tonnes worth US$ 176.3 million. This category showed one
of the most remarkable variations among the main export products, +38.1% in
terms of volume and +42% in terms of value. The third item in importance both
in volume and value is frozen whole and H&G rainbow trout. Exports during
the six months period were 40 557 tonnes with values at US$ 157.4 million
(+37.6% and +42.1%).
The other two products which grew strongly are salmon fishmeal and fishoil. Exports
of these products grew both in terms of volume and value. Fishmeal volumes
grew by 55.3% and values by 106.8%, which resulted in a 33.1% increase in
unit values. On the other hand, sales of fishoil produced from salmon grew
42.6% in volume and 44.4% in value.
Not surprisingly, production trends are reflected in export trends. While
sales of Atlantic salmon fell 3.1% in quantity, sales of rainbow trout grew
30.9% and coho salmon sales jumped 31.8%. Atlantic salmon showed the highest
unit value increase, +18% while unit values for exports of trout grew by 5.6%, and for coho salmon by 2.4%.
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Export markets are highly concentrated
The main destination for Chilean exports of salmon and trout in terms of
value is the US
market. In the first half of 2007, 62 455 tonnes worth US$ 467.5 million were
destined for this market. This means an 8.2% increase in volume and a 22.8%
increase in value. Regarding the US share of
total Chilean exports of salmon and trout, it was 36.4% in value and 22.6% in
volume for the period under review. It is worth mentioning that the US market
is, among the main markets, the one where Chilean products achieve the
highest unit values. The main traded product is fresh Atlantic salmon fillets
which accounted for 58.2% of volumes and 59.1% of values. Observing the
behaviour of US imports, according to NMFS data, and taking into account the
accumulated imports during the first semester (dotted lines), and the total
annual results, it can be expected that Chilean exports to the US will
maintain an upward trend in terms of value and volume for 2007. It is
important to note that this index was elaborated as an illustration, and the information provided by the NMFS may
be slightly different to that provided by Chilean customs.
Japan
has the second place as main destination for Chilean exports. Trade with this
country grew 22.8% in terms of volume and 23% in terms of value, from 82 760
tonnes and U$S 341.4 million in the first semester of 2006, to 101 591 tonnes
worth US$ 419.8 million in 2007. Japan had in
2007 a 36.7% value share and a 35.5% volume share for Chilean sales of salmon
and trout to foreign markets. The main species sold to this market is rainbow
trout with exports reaching 41 246 tonnes and US$ 218.4 million between
January and June 2007. The main trout product is frozen whole and H&G,
which accounts for 58.9% and 42.6% of the traded volume and value, followed
by frozen fillets with a share of 27.6% and 39.2% respectively.
The American and Japanese markets together account for 59.3% of total volume
exports and 69.1% of value exports. It is also important to highlight the
growth of sales to Russia
and China.
During the first six months of the current year, sales to Russia more
than doubled, and a similar performance can be observed in exports to Vietnam,
although this market has a much lower share. Sales to China grew
strongly in both volume and value terms, +86.3% and +42% respectively.
Recent trends and outlook
The salmon industry accounted in 2006 for nearly 4% of total Chilean exports,
and is becoming an increasingly important productive sector. Recently, some
companies have listed shares in the stock market as a mean of obtaining funds
for their expansion plans. This development is seen as very positive, not only
for the dynamism that this implies for the industry, given that it is
expected that other companies follow the initiative, but because it enhances
transparency in the operations of the industry.
The boom in the industry has been supported by the increase in international
prices, which achieved record levels. At the same time, some operators expect
that these prices will decrease during the second half of the year, since a
higher production of salmon in Norway is
expected. Nevertheless, an increase can be expected in Chilean exports of
salmon and trout, both in quantity and value, following the strong
performance during the first six months of 2007.
Despite the positive outlook, some challenges remain for the Chilean salmon
industry. On the one hand, the recovery of part of the productive sector
affected by the earthquake in the XI Region. On the other, the industry has
been the target of several environmentalist claims regarding the impact of
its operations. At the same time, the industry is being affected by an
increase in production costs, and also by the outbreak of several diseases,
such as sea lice and the ISA virus which recently appeared for the first time
in Chile.
Health aspects are emerging as a key issue to be taken into account by the
industry to assure its long term sustainability.
On another matter, on September 3rd, the free trade agreement between Chile and Japan came
into effect. However, for the moment, the only products which will benefit
from the FTA are frozen and smoked rainbow trout, while the reduction of
duties for Atlantic salmon and coho salmon will be considered in five years. The
import duty for frozen rainbow trout will be reduced from 3.5% to 3.2%
immediately, and will be cut to zero in eleven years. The duty for smoked
rainbow trout, which currently is 10%, will be cut to 1.25%, and to zero in
eight years. Given that Chile is the
only country which has an FTA with Japan, this should provide
special advantages to enable it to compete with other countries. This
agreement is a positive development for the industry, although its effects
will be more noticeable in the longer term.
By Javier López (INFOPESCA)
© FAO GLOBEFISH 2007
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