The salmon industry is experiencing the severe hit of lowered sales this Easter, which is usually an increased sales season for salmon.
“We are usually swamped with orders up to Easter. This is not the case this year,” says Thomas Lyngvang, sales manager at Polish processor BG Production to SalmonBusiness.
BG Production is located in Białogard/Koszalin and processes around 250 tonnes of salmon a week, under normal circumstances. Generally, the sales go up with 100-125 % around Easter. This has not happened this year.
“Usually there is a lot of activity in the whole market right now,” he says.
The company’s production has the last weeks been down to 150-200 tonnes of salmon a week.
If you don’t sell to supermarkets you won’t survive
BG Production produces mainly fresh salmon to retail. This fact they are grateful for at the moment, as they too are experiencing that all sales to hotels and restaurants, HORECA, have been washed away.
“If you are not a retailer or selling to retail, you will not survive at all. We are still here because of the sales to retail, had we only sold to HORECA, then I would probably not be as positive as I am right now. We will still be here when this crisis is over,” says Thomas Lyngvang.
BG Production sold before the pandemic 60-70 pct. to retail and the rest to hotel and restaurants, HORECA, this is now 90 pct. to retail and 10 pct. to wholesale.
People are afraid of buying
Thomas Lyngvang explains that overall, they are experiencing that both processors and exporters are afraid of buying fish at a price, where they could potentially lose money later on.
“We only have our regular appointments right now. People are really scared to buy because they are afraid the price will be lower than it is when they buy it,” he says.
Therefore, so-called spot sales are almost gone, as only few dare to speculate on buying salmon at a lower price to sell later, when the prices of salmon are up again. Usually, the business buys 50-70 per cent. at spot price from salmon exporters, but this is completely gone now. In addition, BG Production also usually sells some products at spot prices.
“More sales are very difficult at the moment, and the prices that customers are willing to pay are still far from today’s salmon prices. There is simply not much demand, and those who have such a low target that you have to go under 4 EURO for 3-6 kg of salmon to move any significant volume,” he explains and concludes:
“We dare not buy more ourselves, because it must be back to back. Right now we have to work a little harder than usual.