A perfect storm has been brewing in both the fresh farmed salmon market and the frozen wild business that is leading to higher salmon prices to start out the year.
Chilean production is down as stricter government regulations seek to completely stem ISA outbreaks. Plus, salmon exports from the country may have been hampered this week after a dozen ports shut down in a strike. The impact on overall exports, including copper and fruit, is expected to hit USD 400 million (EUR 295 million). To make matters worse, Chilean exporters are asking the government to extend the strike to more ports.
Frozen Chilean salmon fillet supply is strained and prices have risen from the high USD 5 (EUR 3.69) range to around USD 6.50 (EUR 4.80) per pound FOB, distributors report. “The Chileans are freezing to capacity for Japan on steelhead and Coho salmon. Fresh supply has been strong, but frozen has been weak,” said Harry Mahleres, director of purchasing for distributor Seattle Fish Co.
To top it off, demand for salmon will spike during the upcoming Lenten season. “Supply is going to be tight, so they are expecting shortages of frozen [Chilean] fish,” Mahleres said.
Despite reduced production in Chile in recent years, many buyers support efforts that the Chilean government is making to turn the market around. “Hopefully we will see some stability in the pricing. If they can raise the price and keep it at a certain price, it would be better than the up and down cycles. I would rather they be profitable than cutting corners, leading to lousy production and allowing chances for disease,” Mahleres said.
The demand for all farmed and frozen wild salmon is up, distributors report. “The European market is coming back to life. There is a lot of demand for fish — including chum, sockeye, and pink,” Kevin Bradley, director of Asia Operations for distributor Tradex Foods, told SeafoodSource.
Buyers are also realizing price hikes on farmed Scottish and Norwegian salmon since mid-December, because of weather and production problems. “Holiday shipments from [Scotland] were stifled by horrible weather conditions, with constant 12-foot seas and hurricane-like winds of 80 mph,” Mahleres said.
Scottish salmon prices have risen 16 percent since October, distributors report.
Still, the demand for Norwegian and Scottish salmon has not waned. “Scotland has seen huge demand from Russia, China and other areas of the world. Consumers are accepting the higher prices,” Mahleres said.
