October 27, 2010

Chilean salmon sector costs seen to surge 30%

The salmon sector estimates that industry costs will increase by 30% due to new health and environmental requirements that are involved in the new aquaculture legislation, which should be ready in late 2010.

The increase is a result of new health standards that are being implemented in the industry, according to the chairman of the Association of the Chilean Salmon Industry (SalmonChile), César Barros.

Barros claims that "the salmon industry is going through the best health status in its history", after facing a health, labour and cost crisis as a result of outbreaks of the infectious salmon anemia (ISA) virus in various culture centres across the country in 2007. The epidemic triggered not only a new way of producing salmon in the country, but also a significant increase in operating costs and transportation.

He explained that one of the largest costs will be the demand for rest periods in neighbourhoods, "they will last for three to four months a year, which means 30% less production," according to reports.

According to a salmon entrepreneur, the establishment of districts, with dates of rest required by zones, prevents them from deciding when and where to start new plantings. In addition, three months of rest will result in having to add another 18 months needed to fatten the salmon.

Meanwhile, another producer said a major cost is smolt production, because producing them on land is more expensive, between 30% and 50% more than compared to them being produced in lakes, as before.

However, the Barros believes that with the current prices, the industry will remain competitive with rising costs.

On the other hand, numerous salmon sector firms have provided for a gradual adjustment in the price of salmon due to the rise in yields. Currently, each kilogramme of farmed Atlantic salmon is sold at US$11.50, while it cost US$13 last June.