The demand runs faster than the supply of salmon.
“We see that there is negative supply this year. There will be a certain increase, between one and two per cent during the autumn, but it is not particularly much seen in a historical perspective,” Andreas Kvame, CEO of Grieg Seafood, said.
“We have probably never had a decline (in global salmon volumes – editor’s note) as in this quarter. We have seen up to five per cent, but this year we have seen almost seven per cent,” he said, adding “We are coming out of the pandemic, and the kitchen must have bought in fish.”
Kvame is supported by Mowi CEO Ivan Vindheim, who stated earlier in the day that he does not see significant supply growth in the next five years.
“And demand usually tends to grow. We are optimists. The only thing that can destroy it is the world economy,” Vindheim said.
Few fish meant that Grieg Seafood has profited greatly from high spot exposure. The company earned NOK 986 million (€101 million) from operations in the second quarter.
“We tried to reach a billion, but couldn’t find it,” Kvame laughed.
For a while
The company did it particularly sharply in Rogaland:
“We achieved an operational EBIT of NOK 48 (€5) and a farming cost of NOK 46 (€4.8). We can live very well with the EBIT being higher than the production costs, but it will probably be a while before we see that again,” Kvame said.
Salmon prices have weakened significantly during the third quarter, which is seasonally not unusual. However, when the market traditionally tightens in late autumn, spot prices are expected to rise.
Salmon exchange Fish Pool shows a forward price of NOK 74 (€7.7) in the fourth quarter. Looking further ahead, annual prices of NOK 78 (€8.1) and 72 (€7.5) are expected in 2023 and 2024 respectively.
According to Kvame, it is now possible to set fixed-price contracts between NOK 70 (€7.3) and 85 (€8.8) for next year.