Expects pressure on earnings after two record years
Ragnar Nystoyl, outgoing manager at fisheries-focused, Kontali Analyse, kickstarted the Norwegian Seafood Seafood Association conference at the Scandic Hell Tuesday morning. As usual, Nystoyl had his crystal ball with him, well-ready to gaze into the coming salmon year.
The most important conclusion was that number-crunching company from (oil-rig base) Kristiansund is expecting global supply growth for Atlantic salmon of seven percent in 2018.
“We’re expecting 100,000, seven percent up, for Europe’s salmon production this year. We expect to see the same relative growth, seven percent, in North America, too, but those volumes are just the half of it,” said Nystoyl.
“These are sizes you have to back a few years to see the likes of,” he said.
It wasn’t that long ago. Seven percent production growth is the highest since 2014. That’s when world production rose 10 percent.
“2018 will become a different year than the previous two, based on earnings,” Nystoyl added.
Even though last year was affected by falling salmon prices, those prices were, collectively, roughly the same levels as in 2016.
“The salmon price has never fallen so much in kroner during a year. It fell more than 10 percent in 2011, but we estimate a pre-tax result (for the worldwide industry) nearer 24 billion kroner versus an estimate of 23 billion for 2016,” Nystoyl said.
High price levels slammed price-sensitive parts of the total market. Salmon consumption in central markets like the European Union, Russia, China and Japan all saw volumes shrink back in 2017.
“The USA pulled the cart — the whole cart — last year,” Nystoyl asserted.