April 7, 2010

Harsh winter in 2009, declining production in Chile, strong Norwegian Kroner and rising demand all led to the current strong prices of Norwegian salmon.

Norwegian salmon production reached 855,000 tonnes in 2009, a rise of 15.4% against 2008 levels. However, this year's production is only expected to increase by 7%, with an even more modest rise of 2% anticipated for 2011, according to Nordea analyses.

The reason for this stabling production change is that Norway has almost reached the Maximum Allowable Biomass limit, thereby limiting potential production growth.

Chilean salmon production fell by 41% in 2009 due to salmon health problems. A further drop of 70% is forecast for this year but production is expected to pick up from 2011 with revised farming strategies. However, a volume gap will remain in the market until biomass reaches marketable size probably beyond 2012.

Norwegian producers fear that the tight market situation may cause salmon prices to spike beyond control, penalising both processors and consumers and encouraging switch to other fishes.

High prices for salmon are set to continue throughout and beyond 2010, according to experts.