Analysts see a need for lower price levels on the fish indexes to absorb coming supply growth
In the middle of November, Carnegie analyst Lage Bohren stuck his neck out and predicted that salmon prices would stay high a good bit into the first quarter of 2018.
That prediction didn’t hold water, and the salmon price in the fourth quarter was the lowest of 2017. So far in 2018, the salmon price is a good EUR 2 below its level of a year ago. As a function of this, shares in salmon growers on the Oslo Stock Exchange have fallen about 12 percent since the middle of November.
Supply growth
“The reason shares have been weak over the past months is that expected supply increase in the fourth quarter sent prices farther down than expected. At the same time, when we know more salmon are entering the market this year than last it naturally creates fear that we’re about to see a price correction that’ll persist.
But, the extent of that growth is significant, and especially dependent on the positive biological development in Norway continues. That’s why the companies’ guidance both for their own growth and the industry as a whole is getting a lot of attention,” Boehren told TDN Direkt.
Contracts
Boehren said he also thinks any comments on demand will be followed closely, as well as what salmon farmers say about price and volume on their firm contracts 2018 deliveries, since they’re of great significance in determining price levels in stores.
“We know there’s been an unusually big divergence between seller and buyer in contract markets over the past months, and now we’ll get the answer on who has given up the most in those negotiations.
“The pattern of salmon sales in the EU at least shows that we need a lower price level on the fresh food stands to absorb the coming growth in supply in a good way,” he said.
