Shock over virus drops the salmon price down once again

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Coronavirus fear cuts down the salmon prices – for the fourth week in a row. Now the big salmon is cheaper than the most traded weight classes.

“A terrible week. There is a nervous atmosphere,” says one exporter to SalmonBusiness. “No air cargo. The aviation market has stopped. And we have a lot of 6+ [kg] in Norway,” he continues, calling the market “quiet”.

The heaviest salmon is usually in high demand by overseas markets, especially in the Far East and the US. This is not the case now.

“All the flight orders were packed, driven to Gardermoen [Oslo airport] and then the flights were cancelled. This resulted in losses of up to 20 kroner. We just have to wait. We can’t take that risk.”

Facts

Every Friday after lunch, SalmonBusiness report spot prices for salmon. These are fish to be delivered the following week. We contact several links in the value chain, including farmers, exporters and importers, and always have at least five independent sources, although not all sources are necessarily displayed. We vary the sources we use and do not use the same sources each time.

Coronavirus
“Prices are way down in the 60s. About the same price on 4+,” says another source. “It has gotten a hit, that big fish,” he adds.

It is the demand side, and the negative effects of the coronavirus, that is the major topic of conversation among traders today.

“There’s a lot of uncertainty. Customers are starting to stop demanding. People don’t go to restaurants anymore. Finns say there is a 50 percent reduction in restaurant visits. It is almost the same in the UK. People are afraid of infection. That’s the big problem,” says one importer.

“It’s not China – people are going out less. Then we do not know how it will develop.”

“If you look at economic theory then the price should be down in the low end. We will have to see what they offer in Norway. It will probably be in the lower half of the 60s,” he says.

Big fish
“It is incredibly difficult to see the consequences. You will not see the orders for the fish until a week or two has passed. But when it has been 100 kroner earlier on, it should be 40 kroner now. It is only now that farmers have started taking out big fish. Chile has a lot of big fish, and they do not have access to Russia,” he points out.

All indications are that even more fish will be targeted at the European market.

“It’s a shock. And people don’t see the consequences. They don’t understand what this means for demand,” says a buyer.

“I think a few people are able to understand the situation. You do not have an overview of what you actually get out. That fish should be allocated to other aviation markets. When they don’t take it, it will in Europe.”

The sellers of big fish, which saw prices upwards of a ten euro for a month and a half, have seen the lights go out.

“There is more big fish available from week four each year. What has happened this year is that the big fish prices were so high for so long. Then this happened like nobody saw, of course.”

Strong
“But there is no reason to lose your head if the price falls to NOK 60. Did people forget that we saw the 3 in the fall?” he asks.

It’s starting to be a while ago, but in week 41 last year, the salmon price was NOK 39.75 (€4).

“I’m surprised at how strong this market is, with a price of 60+. We are steeped in news of this [the corona virus – ed.] in the western world,” he notes.

SalmonBusiness’ industry sources refer to the following farmgate prices for fish to be delivered the coming week:

  • 3-4 kg NOK 60-61 (€6.0-6.1)
  • 4-5 kg ​​NOK 61-62 (€6.1-6.2)
  • 5-6 kg NOK 62-63 (€6.2-6.3)
  • 6+ kg NOK 58-60 (€5.8-6.0)