In posting their first-quarter results, market leaders Leroy Seafood and Marine Harvest highlighted demand growth as the key determinant of the strong price picture we’re now seeing.
Last Friday, SalmonBusiness could report that prices this week would be around EUR 8 per kilogram. Since mid-January, the spot price has grown by EUR 3 per kilo. At the same time, (Norwegian) salmon exports have, year-on-year, increased by 4.1 percent so far this year (Akvafakta).
That’s sensational and first and foremost about eager shoppers. They’re hungry for salmon. That, at least, is what the directors of the two largest aquaculture companies say they believe.
“Demand for salmon has increased compared with the end of 2017. That has yielded high prices and a good result for Marine Harvest,” chief exec Alf-Helge Aarskog said as he delivered the quarterly result this morning.
“Demand for seafood is strong, and this has caused a positive development in prices for the first-quarter of 2018,” Henning Beltestad, CEO at rival Leroy, said yesterday.
It’s demand, not a cold late-winter of slow marine grow-out that’s in focus and the main explanation, when the heads of the big salmon farmers describe the year’s price upswing.
Look closely at this overview.
Both 2016 and 2017 saw exceptionally high salmon prices. But, 2018 could be even better. The second quarter, normally the year’s best-paid, this year features salmon prices that rise higher than those of 2016 and 2017 — and by good margins.
That stands in contrast to views held as the year began. As it delivered export numbers for 2017, the Norwegian Seafood Council ventured a prediction for 2018. The marketing people in Tromso — whose job is to promote salmon — said they saw downturn and a fall of 12 percent year-on-year, when they predicted EUR 5 on average for the year. That was somewhat more optimistic than (ocean industry watcher) Nordea Markets who, just before Christmas, broadcast price expectations of about EUR 4.8.
The market wanted it oh-so different.
The literature in Marine Harvest’s first-quarter report clearly shows that which now appears to be the paradigm. Over the past five years, the salmon price has for only short periods registered below EUR 5 per kilo.
The market’s judgement is that salmon, at today’s range, isn’t an everyday fish. It’s reserved for restaurant tables and weekend dinners, and end-customers are more than willing to pay for it.