Supplies & prices
Significantly lower prices during 2012 compared with 2011 have boosted salmon demand in most markets, despite falling consumer confidence in Europe. Supply has been ample and prices are not likely to increase soon, but could start firming during December because of the hike in fresh salmon demand and again from January onwards.
Norway continues to focus on fresh shipments mainly to Europe, and to Japan. During the first semester Norway, the largest salmon producer in Europe, and in the world, saw shipments grow 30% to 450 000 tonnes. The fresh round product form saw the largest increase but all product categories registered higher volumes. Lower prices were a major factor behind the growth in demand. By September, however, it was evident that market growth was slowing down; Norwegian shipments were up only 7% on September 2011.
The second largest salmon producer in Europe saw its positive export development continue during the first semester of the year. It is in fact the fifth consecutive semester that UK salmon exports have grown. The USA market has become the major destination, overtaking France.
Europe’s third largest salmon producer and exporter saw shipments jump to around 27 500 tonnes, an increase of 34%, during the first semester compared with 2011. Lower average prices caused export values to decline by 2% however. The USA remains the principal market followed by the UK, Germany and Denmark.
Salmon and trout prices have reached their lowest levels since the 2010 crisis in the sector. During the first semester of 2012, prices dropped by 17% compared with the same period last year. On average, salmon and trout export prices were USD 6.46 per kg, compared with USD 7.12 per kg registered in the same period in 2011.
Although Chilean salmon companies have managed to increase production and sales (influenced by on-going demand from the Japanese market), this was not enough to compensate for losses resulting from low prices. Across the board all companies were also severely affected by the increased cost of raw material, caused by a high mortality rate during summer, a consequence of high temperatures.
With the come-back of Chile’s production, traditional markets in Japan and the US have been the main focus of Chilean exporters. Shipments to Europe have fallen to very low levels despite some recent recovery in France whereas Chile’s regional markets led by Brazil and Mexico are taking substantial volumes of mostly fresh salmon and at good prices.
The largest salmon market in Europe saw moderate growth during the semester. Fresh round and fresh fillets registered positive development as did smoked salmon imports. Shipments of frozen fillets were down drastically in particular from China, which supplies mainly frozen Pacific salmon. Chile, in contrast, saw its shipments of frozen salmon start approaching levels reached before its production problems during the years from 2009 to 2011.
For the first time in years, the German market registered falling imports during the semester with all major suppliers showing lower shipments. The decline affected all product categories except for smoked salmon, which saw a moderate growth of 3% in imports, and fresh fillets (6%).
The Japanese market has shown remarkable growth during 2012, with total salmon imports exceeding 100 000 tonnes during the semester, up a solid 24% over 2011. The main driver has been increased supplies of frozen salmon from Chile, which saw shipments top records established in 2007 and 2008 before the production crisis. Norwegian exporters have also reason to be satisfied with volumes as Japan’s imports of fresh Atlantic salmon from Norway bounced 53% to 13 000 tonnes.
Chile continues to be the USA’s main salmon fillet supplier, leaving Norway behind in terms of quantity of exports.
During the first semester of 2012, imports of salmon rose by 18.6% in comparison with the same period last year, in terms of volume; however, in terms of value, a rise of only 1.73% was registered, mainly because of lower prices.
The USA also showed a drop in exports: these were considerably higher in 2011. Statistics show that in terms of volume exports dropped by 6.46%, while value was also down by 9.25% over the first semester of 2012.
From January to June 2012 the USA exported almost 40 000 tonnes valued at USD 185 million, compared with over 42 000 tonnes and USD 203 million in the same period in 2011.
The slowdown in the world economy and the persistent economic problems in Europe, the main market for salmon, are dampening salmon demand, despite the lower prices compared with most of 2010 and 2011. The big question is what will happen in 2013, which could see Norway’s salmon output slowing down considerably. In Chile, producers are seeking to regain previous production levels but remain dependent on the long-term profitability of Chilean companies.
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