Roller coaster spot market “the new normal”

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Price fluctuations are the new normal, not the exception, a leading professor has warned the salmon farming industry.

Bård Misund, associate professor at the University of Stavanger, said the record two weeks of wild swings which have seen the price drop from an EUR 8 per kilo to EUR 5.5, will become routine.

“Limited production and less salmon in the spot market, caused by issues such as lice, are here to stay. Producers, especially exporters, should prepare to factor in varying margins.

“We are seeing the salmon price go down one week and high next week. Exporters can lose big with such fluctuations, and their margins will vary much more compared to what they have been used to,” he said.

One purchasing manager, Ben Hustadnes from Ålesundfisk, agreed that the risk has “increased significantly” in the spot market.

“There have been bigger fluctuations and higher prices. It’s high price and high risk. It is very scary to sell in the spot market, with the potential to lose 10-15 NOK,” he said.

“Right now, the best we can do is hope for stable prices. Large fluctuations are not beneficial to anyone,” added Hustadnes.