July 27, 2006

 

Problems arise as salmon demand overheats

 

 

Norwegian and Chilean farmed salmon are gaining in popularity as the numbers of wild-caught salmon have declined sharply world-wide, according to a food production website.

The EU and US are now looking at lower quotas for wild-caught salmons or  restricting imports to stem the decline in global stocks, meaning that processors would have to look increasingly at countries such as Chile and Norway for farmed supplies, Food Production Daily noted.

 

Norwegian and Chilean salmon producers have posted record profits for the first four months of 2006 amidst red-hot demand.

 

France and Germany, the two biggest importers of farmed salmon in the EU, both saw significant price increases this year. Most of its supply is still coming from Norway, despite EU measures to prevent cheap Norwegian salmon from flooding the market.

 

Norway's Panfish, a leading salmon producer, recently proposed to merge with Fjord Seafood and Scotland's Marine Harvest. However, the merger has met with stiff opposition with Scotland's salmon farming industry.

Norway and Chile are both jousting to be the top salmon exporter to the EU market.

 

Currently, Chile is slightly ahead as its frozen salmon filet is outselling the Norwegian version in both the French and German markets.

 

In 2005, Chilean salmon exports brought in EUR1.36 billion for the South American nation and the trade association SalmonChile expects this would increase to EUR1.6 billion by the end of 2006.

 

Meanwhile, producers are struggling to keep up with worldwide consumer demand for salmon. One factor hampering growth is the shortage of fishmeal. A shortage of 1 million tonnes of fishmeal currently is keeping down the volumes of farmed salmon on the market.

 

Fishmeal, which has exceeded EUR1,265 a tonne this year, is up EUR790 from a year ago. Increased Chinese demand for feed and problems in supply from South America are root causes of the shortage. Most of the world's supply of fishmeal comes from Peru.

 

Peruvian fishmeal prices in China have reached US$1,230 a tonne. Currently, there is a 144,000 tonne stock in Chinese ports and sales are said to be sluggish.

 

Overall, reports show that farmed Atlantic salmon has reached record levels, however, industry observers believe the market would stabilise by the end of this year.