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Fish Pool and DNB offered last week a seminar in Barcelona where they discussed the rising prices of salmon and its future stabilization. The conference was attended by Ståle Johansen from DNB, Alexander Aukner from DNB Markets, Thomas Farstad from Milarex and Christián Swett Plá from Multi X.
Firstly, Johansen, who works with risk management and contract strategy within a currency, commodity prices, and interest rates, confirmed they didn’t believe prices will return to normal (around the 60s NOK). “The situation is quite dramatic for the end customer’s prices,” he stated.
In addition, he said “the risk is on the upside”. Due to the limited liquidity in a market where interest rates still rise and reign commodity prices. It is worth remembering that the salmon price has doubled in four months. “This is a liquidity issue,” he added.
The shadow of shortage
On the other side, salmon analyst Alexander Aukner warned that the global supply of salmon will fall by 1% in 2022. “We are struggling to see where there will be significant production growth from the traditional salmon-producing regions,” Aukner said.
Regarding this, he mentioned the challenges land-based fish farms are facing with financing for several players. Also, how Atlantic Sapphire had recently struggled with biological challenges. Looking to the future, “investors should hedge their investments in addition to the exposure in salmon stocks”, according to Johansen.
Furthermore, Aukner predicts “on the cautious side”, €7.26 (71 NOK) on average for the salmon price in 2022. “It can easily be ten kroner higher than that. I also believe that prices will be quite robust also in 2023 and 2024. It will come down from current levels, but the question is where it will stabilize.”
Finally, Aukner admitted: “There are several risk elements that can stop the price party for the farmers”. For example, new taxes, inflation, a new president in Chile, or an escalating war in Ukraine.
Consequently, this leads us too to ask whether consumers will be willing to pay more for their salmon.
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