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The contrasting impacts of COVID-19 on Chilean and Norwegian salmon prices

December 4, 2020

1 mins read

The price impact of the COVID-19 pandemic is evident in the contrasting fortunes of Norwegian and Chilean salmon producers. At USD 4.88/kg, Mintec’s average spot price of Norwegian farmed salmon fell by 9% year-on-year (y-o-y) for the quarter ending November 2020.  However, the monthly spot price for November 2020 increased by 8% month-on-month (m-o-m) to USD 5.08/kg. The average FOB price of Chilean farmed salmon (10-12 Ibs) fell by 43% y-o-y for the September-to-November quarter, to USD 3.26/kg, while the November monthly average also fell by 15% m-o-m, to USD 2.84/kg. Indeed, the November average is Mintec’s lowest price in eight years.

The main reason for the price disparities between the two regions is the relative exposure to the foodservice industry. Demand by hotels, restaurants and other out-of-home vendors accounts for around one-third of European salmon consumption, which is Norway’s primary destination market. Conversely, foodservice demand accounts for approximately 43% of salmon consumption in the US and 54% in Latin America. Thus, the largescale lockdowns caused by the pandemic have had greater significance for Chilean producers’ end-user markets. Additionally, Chilean salmon production year-to-date is around 10% higher y-o-y, thus exacerbating the downward price pressure.

However, aquaculture analysts predict that Chilean supply will contract by 10-25% y-o-y in 2021, with the financial losses incurred in 2020 anticipated to weigh heavily on production decisions. Lower y-o-y output, against a potential demand rebound, as COVID-19 restrictions ease, supports a more bullish price picture for the year ahead.Slide1-Dec-04-2020-03-40-50-34-PM

 

Topics: Fish & Seafood
Ibi Idoniboye
Ibi Idoniboye

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