Drop in air freight market pushes salmon prices further down.
The Chinese New Year celebration is reducing demand for large salmon.
“It has dropped significantly in recent weeks. The biggest fall has been for 5+ kg salmon, as the market for air-shipped fish has shrunk. Next week, Monday packing is the key—if you miss that, you’re too late for Chinese New Year. You need delivery to Oslo no later than Wednesday to make it,” an exporter told SalmonBusiness.
“On Monday, you might get a better price for 6+ kg salmon, but the rest of the week will be a completely different game since that fish will have to go to a completely different market.”
Large Parts of Asia
The exporter expects the following prices (to the farmer) for salmon to be harvested next week:
- 3-4 kg: NOK 88 ($7.74/€7.48)
- 4-5 kg: NOK 91-92 ($8.01-$8.09/€7.74-€7.83)
- 5-6 kg: NOK 95 ($8.36/€8.08)
- 6+ kg: NOK 100 ($8.80/€8.50), but two distinct prices: NOK 110 ($9.68/€9.35) on Monday and a different price for the rest of the week.
The Chinese New Year celebration, which starts at the end of January and lasts into February, is a key driver of demand for air-shipped large salmon.
“This affects all of Asia—China, Korea, Taiwan, large parts of the Asian market shut down. That’s why it’s like this.”
Low Season
This means that last week’s price drop is not stopping.
“There is a decline, but prices have been even lower than this. Bad weather in the north has pushed prices up slightly. A number of cancellations today. But there’s no momentum in the market. I can’t say there is. It’s low season.”
“I wouldn’t buy at this level. Not in our portfolio. Too high right now,” said a buyer when told of the prices above.
“The market is significantly lower going into next week. Expectations for Chinese New Year have failed. Overhyped and overpriced, leading to a collapse. This week isn’t even over. There’s still a lot of unsold fish. Just like last Friday. It’s been a bleak week for sales.”
Unsold Fish
A farmer finds some optimism in the slight price increase.
“Prices have gone up a bit from where they were,” he said, referring to prices of NOK 92, 95, and 98 ($8.09, $8.36, $8.62/€7.83, €8.08, €8.33) for the most commonly sold sizes, 3-6 kg.
“The 3-4 kg size was down to NOK 87 ($7.66/€7.40) during the week, and if you have unsold fish, the price is much lower than this. The 5-6 kg size was down to NOK 90 ($7.92/€7.65)—it’s gone up NOK 8. A week ago, 5-6 kg was at NOK 130 ($11.44/€11.05),” he remarked.
“Just look at historical graphs—we came from high peaks and then dropped much lower than last year or the year before. Almost down to an average of NOK 90 ($7.92/€7.65). Now, it’s starting to turn around.”
A Trader’s Perspective
A trader anticipates even lower prices.
“We haven’t sold anything yet, but I’m seeing 3-4 kg at NOK 85-87 ($7.48-$7.66/€7.23-€7.40), 4-5 kg at NOK 88-90 ($7.74-$7.92/€7.48-€7.65), and 5-6 kg at NOK 93-95 ($8.18-$8.36/€7.90-€8.08). The 5-6 kg size has really been flooding the market this week. It’s been tough.”
He also points to Chinese New Year as a significant factor in price formation.
“Both that and the fact that, like last year, many positioned themselves for Chinese New Year with large fish. The big integrated players have more 5-6 kg fish, and we’ve bought quite a bit of 5-6 kg from them as well. If 5-6 kg drops to the level of 4-5 kg, many will opt for the 5-6 kg size instead,” he said.
