Challenging weather conditions to to guarantee an extended price hike

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Storms in Scotland, the Faroe Islands and parts of the Norwegian coast make salmon logistics demanding.

“We received some cancellations due to bad weather this week,” says an exporter to SalmonBusiness. “It [the price] stays high until the beginning of next week, but in the end of the week we don’t do much. Everyone expects it to be over soon. Obviously there is not much power in the market since there has been so little fish available.”

That means average salmon prices well up in the €7s next week too. At least for the first few days of the week.

“We stay away from end week orders. It can be dangerous. There will be some more harvesting next week. And then, there is not much of market at these prices.”

“We’re not going to buy with both hands. The customers are awaiting. There is no hiding it. It is a risk for a real fall,” he says.

Downside risk
With that, salmon prices have been at record highs since mid-December. 

Facts

Every Friday after lunch, SalmonBusiness report spot prices for salmon. These are fish to be delivered the following week. We contact several links in the value chain, including farmers, exporters and importers, and always have at least five independent sources, although not all sources are necessarily displayed. We vary the sources we use and do not use the same sources each time.

“There is only downside risk here. I don’t see much upside risk,” says one trader. “Prices have been high far out in January – and this is not what usually happens. But there has been a lot of bad weather. Still, there are some farmers who want to raise the price next week. That’s pretty dangerous stuff.”

“One should not lie long buying at these levels. It seems like there is not much to earn [on trades for] next week, he says.

Access to fish has been and continues to be a challenge for the large processors.

“It’s very confusing. Obviously there are high prices. There is no doubt about that. Bad weather is reported next week as well,” says a processing buyer.

“Obviously not a lot of fish go out at these prices here. Storm in the Faroe Islands, Scotland and Norway. I’ve got the fish I need, but it’s been pretty tough.”

Chinese New Year celebration
At the same time, strong demand from overseas markets is reported.

“It’s Chinese New Year, so you have to send a little over there. Prices for the United States are also very high,” he points out.

“We will not get a real market until the weather has calmed down. Then the price slumps down to 20 kroner,” he predicts.

SalmonBusiness’ industry sources refer to the following farmgate salmon prices for next week’s delivery:

  • 3-4 kg NOK 70-75 (€7.0-7.5)
  • 4-5 kg ​​NOK 73-80 (€7.3-8.0)
  • 5-6 kg NOK 77-86 (€7.7-8.6)
  • 6+ kg NOK 85-90 (€8.5-9.0)