Chilean farmed salmon spot prices may end a six-week bearish streak, according to Undercurrent News. The three-month average price declined through Q2 2020 and onward, as supply outweighed demand affected by the COVID-19-pandemic. This descent has continued through Q3 2020, where Mintec data shows that, in the week ending 12th August, Chilean salmon was sold for US$ 3.37/kg FOB, compared to the July average of US$ 4.39/kg FOB. However, many observers now anticipate prices rising on tight supply, attributable to domestic truck strikes.
The Chilean truck driver’s strike began on 27th August, in response to perceived government stalling in improving driver safety. Local truck drivers, particularly those stationed in southern Chile, are increasingly reporting violent attacks, including theft of vehicles and cargoes. Chile’s salmon sector is concentrated in these southern regions, with a number of highways connecting to Santiago export terminals. With the major port highways now blocked, speculators are suggesting around 20-30% anticipated shortfall of Chilean salmon exports through the remainder of Q3 2020.
Notwithstanding the prospect of restricted exports, Mintec expects Chile to harvest around 724,000 tonnes of farmed salmon in 2020, representing 5% year-on-year growth. Production appears to be progressing at good pace, increasing the pressure on domestic cold-storage facilities to hold surplus fish until the end of the strikes. The supply pressures are further heightened by the continued escalation of COVID-19 cases in the US, Chile’s major salmon export market, weighing on demand from both retail and foodservice sectors. Thus, the likelihood of increasing frozen inventories levels in Chile supports Mintec’s more bearish short-term expectation, compared to bullish media projections.