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US Salmon Market Update

Salmonids Economics

US Atlantic salmon imports in the first quarter of 2010 fell nine per cent in terms of volume, totaling 46953 tonnes. However, in terms of value imports showed a slight increase (+ one per cent), reflecting the upward trend in prices, reports Globefish, a unit of the FAO Fisheries Department responsible for information on international fish trade.

Lower supplies and higher prices lead to a rare market undertone

The drop in purchases of Atlantic salmon is fully explained by the shortage in supply from Chile, which fell by 70 per cent in terms of volume. Chile fell from the top position as supplier of Atlantic salmon to the US market in the first quarter of 2009 to third place in the same period in 2010. The gap left by Chilean exporters resulting from the spread of ISA virus was seized upon by Norwegian producers, who saw sales jump by 181 per cent in terms of volume, reaching the second position as main player in the salmon market. Canada is placed as the top supplier in the period reviewed with almost 20 900 tonnes (a 45 per cent share of total supply of Atlantic salmon, both wild and farmed).

Norway accounts for 43 per cent of total supply of fresh fillets of farmed Atlantic salmon, which in the first quarter of 2010 amounted 15 650 tonnes worth USD 157 million. This market segment was previously clearly dominated by Chilean products, but with the drop in production from this country, Norwegian exports almost doubled. Nevertheless, the fresh fillets supply is still highly concentrated, with Norway and Chile accounting for 76 per cent of total volumes. Norway, however, still has a small share in the fresh whole market, as the US Department of Commerce has maintained anti-dumping duties on fresh whole salmon from Norway since 1991. Recently, the DoC ruled that the company Nordic Group AS would be allowed to access the US market with a zero rate. This barrier may prevent some Norwegian companies from applying a strategy similar to the one used by Marine Harvest in Japan, where it opened a processing plant and imports whole fish for further filleting.

As for the frozen fillets segment, it is worth noting that the drop in purchases from Chile led to China becoming the top exporter, followed by Norway, with a share of 37 per cent and 36 per cent each in the total supply of this product (6540 tonnes).

The lower supply from Chile has pushed prices higher and, although by late June they were at a lower lever than the peaks reached in May, the market remains unsettled, given that lower supplies are adequate for the level of demand. Overall prices showed a slight downward trend, although prices for some cuts were higher. A position may have been reached where consumers begin to react to higher prices by reducing their interest, which in turn means that, although total supply is lower, demand remains adequate.

Reduced supply of wild salmon from Alaska

Imports Salmon: USA (1000 Tonnes)
Jan - Mar Jan - Mar
2007 2008 2009 2008 2009 2010
Fresh Fillets
Chile 80.1 76.4 41.5 19.9 16.5 5.1
Canada 4.2 5.4 5.0 1.3 1.0 2.0
Norway 2.3 2.3 18.8 0.6 2.3 6.8
Other 3.5 2.2 8.3 1.0 1.3 2.2
Total 90.1 86.3 73.5 22.8 21.1 16.1
All Salmon 250.2 241.8 241.9 60.0 61.7 59.4

As for domestic wild salmon, the market undertone is similar, with supplies adjusted to current demand. Prices for sockeye and king salmon showed a reduction by mid June but started recovering at the beginning of July. At the opening of the capture season in Alaska, forecasts were for a lower level of catches for king and pink salmon, while sockeye catches were expected to remain stable. Forecast captures in Alaska are 415000 Chinook, 45 million sockeye, 18 million chum salmon, 69 million pinks and four million coho salmon. Total production of salmon in Alaska for the spring season is forecast at about 137 million fish, while in 2009 it reached 163 million fish worth USD 370 million at docks. A trend that was reported by some operators in the Alaskan salmon industry it that more products are destined for the production of fresh and frozen fillets rather than the canning industry, as this market segment has become more profitable given the higher prices for these products.

On another matter, the Marine Stewardship Council announced that it would begin the certification for some sections of the Canadian salmon fisheries in British Columbia. The MSC has already certified three fisheries, while it has announced that some others are not sustainable. The announcement has caught the attention of several NGOs as it is a signal for other fisheries to preserve resources, and it also implies participation of some organisations in the follow up of the recommendations of the MSC. Canada is the top supplier of fresh and frozen salmon (not Atlantic), while China has a leading position in supplies of non-specific products.

December 2010