Supply and demand, who will win?
The salmon industry is on hold as the price of salmon can still increase because of the supply issues. Conversely, because of inflation and economic animosity on consumers demand could be affected and so benefits will start to decrease.
The supply growth is expected to be negative this year. The salmon price will go high as farmers will be unable to offer the same salmon amount as in previous years. But, will consumers be willing to pay the bulging price this will cause?
We can’t ignore that prices for petrol and diesel have reached their peak. Wheat flour, corn, and frying oil will be significantly more expensive. Besides, this contributes to the fall in fertilizer production. Furthermore, inflation will also help raise interest rates. Consequently, all these facts will have inevitably an effect on the consumer population.
What to expect
The salmon industry knows its consumers and anticipates most of them will not buy salmon at a higher price than EUR 7 per kilo. Therefore, inflation will affect them too. They will need to pay more to aquaculture workers. Steel for the boats is getting more and more expensive. In addition to this, at the end of the year, fish feed got to its all-time high point. Covid, the war in Ukraine, and the supply chain have caused scenario with great uncertainties for every sector.
Regarding this, last week we wrote about how the seafood industry fears that tight container capacity and elevated freight rates will last till the end of 2024.