The sales and logistics challenges are rising.
“I hear it is quite chaotic,” says a salmon buyer to SalmonBusiness. “People are talking about low (NOK) 50s. NOK 50-55 (€4.3-4.7),” he says about next week’s salmon price.
That means a heavy fall from the levels last Friday.
“It stops. Now the first wave is over at retail. They (the processing companies – ed. note) have contracts with them on the continent, and they are told to slow down on deliveries. Foodservice is down. Retail goes well, but slows down. This is phase two (of the crisis – ed. note)”.
Stop
The air cargo market has dried up as a result of the fight against the corona virus.
“There is a full stop on the US. Not much on China. Now it’s back to basic. Focus only on Europe for Norway. Chile is about to collapse due to US air traffic. Then we’ll see where that fish goes. There are large frozen inventories,” says the buyer.
He warns national authorities against short-term measures that will increase salmon production.
“It is not wise to increase Maximal Allowed Biomass now. That’s not the solution. That’s short term thinking. What Norway must do now is deliver as much fish as possible and not be as focused on the price they get. Poland is the market.”
The message is clear from all of the industry soures. The price will go down steeply.
Risk
“I do not believe in 55 kroner (€4.7). I haven’t spent a second over 50 kroner (€4.3),” says one trader.
“I don’t think people understand what challenges we have now, with customers not paying their customers. There is no risk priced into this. People have to understand – there is not a restaurant that’s open anywhere,” he points out.
There are lots of unsold fish reported in the market.
“Some have fish left from Monday. They sell it for 40 kroner (€3.4). We cannot take on more than we can control, so we reduce quantity dramatically. It [the price] is around 50 kroner (€4.3). Some talk lower. We also freeze in, we can’t get rid of the fish,” says one exporter.
Many important markets are closed down. That obviously hits turnover and placing power.
Capacity
“We don’t have aircraft capacity. We have challenges with the heavy fish (mostly sold overseas – ed. note). Chile freezes fish. Everyone must freeze in. We see we don’t get rid of it [the fish]. There is a frozen inventory that is being built up now. That fish will be out at some point. After all, it will hurt sales for a while. Of course, we are affected, like everyone else in the world, but we are not in the worst industry,” the exporter continues.
“We’re not discussing pennies. That time is over for a while. We try to solve challenges for farmers and customers. Price will come second. We must stand together as an industry and must try to solve the challenges we have together,” he adds.
“If you are going to sell something you should have 52 kroner (€4.5). And then it will end up at 53-54 kroner (€4.6-4.7),” says another. “It’s the same thing for all fish – they (the customers – ed. note) wait longer before placing orders, and that hurts the volume. It’s not easy. They are closed, all the restaurants, so you know how it is.”
