Low supply growth from Chile “likely to change global trading patterns”

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Worrying results as harvest weights now 330g lower than a year ago, say SpareBank 1 Markets.

In a financial bulletin today, SpareBank 1 Markets’ salmon analyst Tore Tonseth wrote that “supply growth from Chile is likely to come down significantly”.

“Over the next 6-12m months this is likely to change global trading patterns, as the shortage of Chilean salmon will open up for more non-Chilean salmon in airborne markets in Asia and North-America. Although Norway is heading towards +6% supply growth next year, global supply growth is expected to come down.”

Harvest weights now 300g lower than a year ago. PHOTO: SpareBank 1 Markets

He wrote that May’s Chilean harvest in May was up only 3% YoY but that total growth in biomass dropped from +15% in April to +13% in May.

“Even with double-digit higher biomass YoY, net production was lower than a year ago (-3% YoY), which is a clear signal of increasing biological problems in the region. Average harvest weight for Atlantic salmon fell to 4.8kg in May, close to 300g (!) lower than a year ago. Sea lice levels in Chile are now at 5-year high levels, in fact, we have to go back to 2013 to find similar sea lice pressure. In this period, the average harvest weight in Chile was around 1kg lower than today. The new data supports our view that growth in Chile is contracting. We are comfortable with our 6.2% volume growth estimate for 2019 and 0% in 2020,” added Tonseth.