Price cuts dampen investor sentiment on Oslo stock exchange.
The clouds are looming low. In the salmon farm, just west of Lavik Ferry Terminal, on the north side of the Sognefjord, Western Norway, Mowi has a total MAB (maximum allowed biomass) of 3,955 tonnes. The price for the inventories, that is, the fish in the sea, is the lowest recorded in July in five years.
On Friday, the salmon price was clocked in between EUR 4.3 and EUR 4.4 per kilogram, depending on the size of the harvest.
One has to go all the way back to 2015 to find lower spot prices in July. The price then was EUR 3.9, according to Akvafakta.
Falling salmon prices are not uncommon during the summer holidays.
A combination of generational change, improved sea temperatures that increase growth conditions and harvesting, combined with holiday time and subdued demand in the main markets, usually sends the price south during this period.
Downturn is due to fall
As certain as price falls over the summer is also the fact that the turnaround comes in the fall, as demand again runs faster than supply ahead of Christmas shopping.
In turn, subdued salmon prices have contributed to the fact that seafood stocks have lagged somewhat behind the other shares at Oslo Stock Exchange in recent months. After doing insolently well through the first part of the coronavirus crisis, both salmon prices and stocks have had a soft development.
When looking at the underlying salmon price, there is no reason to expect help for the shares from there in the near term.
According to Fish Pool’s forward curve, salmon will stay below EUR 4.6 on average through to October.