Norway's Fish Pool Index - the most comprehensive reference point for wholesale salmon prices - shows that the price for a 3kg-6kg fresh salmon (head on and gutted) has fallen by 42% over the past year [Fish Pool Index, Fish Pool ASA w/e 19 October 2011]. Global salmon prices stood at €2.74 in week 41 of this year, compared with €4.74 in the same week last year.
Salmon prices in the EU had also experienced steep falls in recent months, brought about by increased production and a decline in consumer demand, added Mintec analyst Robert Miles. "Recessionary fears and earlier higher prices led to a drop in demand, and the recent return of Chilean salmon and good Norwegian output has resulted in an oversupply in the market," he said. Total global farmed salmon production in 2011 is predicted to stand at 1.47 million tonnes, up 3.5% on last year, Miles added.
While lower prices spell good news for consumers and many in the supply chain, farmed salmon producers are coming under increasing pressure. Last week, Marine Harvest, the world's largest producer of farmed salmon, reported that its margins for the third quarter of this year had been squeezed by a steep decline in prices on the spot market, and predicted a "challenging market" for 2012. The company added that it planned to farm 11.3m fewer salmon in 2011 and 2012, which should help reduce the current oversupply.
As the current low prices could lead to greater demand for salmon, Marine Harvest was hopeful prices would start to rise again, but the company warned that the salmon market would remain challenging. "While the demand stimulus from low prices can have a positive impact on spot prices in the coming quarters, we must be prepared for a challenging market also in 2012," it said.