Contract drought kicks off spot price jump

The market is tightening.

A salesperson at a fish farming company confirms a price increase towards next week, but not exactly how much.

“It goes up,” he says firmly to SalmonBusiness. “It’s early yet. I’ll get some answers in 30 minutes,” he adds.[factbox]

“69 – 71 – 72 – 73” (EUR 6.6, 6.8, 6.9, 7.0), writes an exporter in a text message, referring to the salmon prices for the weight classes above three kilos.

“69/71/73”, writes a northern Norwegian fish farmer.

Drive
In that case, that means a price increase of well over ten percent in one week.

Another exporter reports prices of up to NOK 70 (EUR 6.7).

“It seems that there is more drive at 3-4 and 4-5, there is enough of 5+. It is natural. Now we have reached week 40, and then it starts to be covered with 5+. 3-4 and 4-5 will probably be most sought after now,” he predicts.

He has seen the many companies that have terminated their MAB (maximum allowed biomass) purchases, which will tighten the production volume.

“It is not certain that there will be much fish throughout the autumn and winter. I think it will be pretty similar to last year.”

Fish Pool manager Søren Martens pointed out earlier today that there is a contract drought, and that is helping to push up the spot price.

Risk
“It will be a market without contracts. We have renounced everything, no new contracts will be given. The risk is too great,” says a trader.

He sees a flat price of 4+ kg.

“We work on NOK 67-68 (EUR 6.4-6.5). You do not get paid extra for 6+. There will be so much big fish ahead. It’s growing so fast and customers don’t want 6+, they want 4-6. It seems that the fish are bigger earlier this year than last year. Good growth in the sea, obviously.”

He also reports major problems getting hold of enough trucks.

“We have a huge challenge there. We cannot buy fish until we have confirmed transport. We have fish that have been stuck in the north [of Norway] for three days waiting for a truck. And it’s getting worse, it seems. Before it cost one krone (EUR 0.1) per kilo from Northern Norway to Oslo, now it costs two kroner (EUR 0.2). The trucks do not get return freight, and must drive north empty. It is really problematic,” he explains.

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