Five Key Factors to Watch in the Salmon Market This Week
As the salmon industry moves into the final week of February, market participants are navigating a mix of strong pricing, increasing biomass, and shifting supply pressures. Here are five key factors to monitor in the coming days:
1. Can Prices Hold Steady Amid Rising Biomass?
Last week’s data showed an 8.6 per cent increase in biomass year-on-year, with standing salmon biomass at 894,551 tonnes compared to 824,030 tonnes in January 2024. Despite this, prices remained resilient. The question this week is whether this trend continues or if larger available volumes begin to put downward pressure on prices.
2. Spot Market vs. Contracts – Who Holds the Advantage?
Exporters reported a slight increase in prices last week, yet some suggested that prices could have been even higher. A lack of long-term contracts has resulted in more fish being traded on the spot market, which has led to pricing fluctuations. Will producers begin locking in more contracts, or will the preference for spot trading continue to shape pricing?
3. Larger Fish Abundance Compressing Margins
The availability of 5+ kg fish remains high, reducing the usual premium seen for larger fish. This has led to a narrowing price gap across weight categories, with some exporters noting minimal differences between 4-5 kg and 5-6 kg sizes. If supply remains high, farmers may need to reconsider their harvesting strategies to maintain profitability.
4. Market Resilience or Imbalance?
While demand remains strong, exporters noted increasing pricing pressure towards the end of last week, signaling that the supply-demand balance is becoming fragile. Some believe that while demand can absorb current supply levels, any further increase in harvesting could disrupt the market.
5. A Test for Buyer Sentiment
While farmers benefited from a profitable week, buyers are watching closely for signs of softening demand. With slightly more fish left at the end of last week than expected, there is a risk that buyers may start pushing back against price increases. The coming days will test the strength of buyer sentiment and purchasing behavior as market participants assess whether current pricing levels remain sustainable.
