Chinese New Year celebrations combined with reduced salmon supply are sending spot prices to new highs.
“We are somewhere between NOK 93 and NOK 98 ($9.30–$9.80/€8.09–€8.53). There are big jumps and a lot of volatility in prices right now, and it seems few people dare to take clear positions. There is also a noticeable difference between slaughtering early in the week and in the final week. With such large volumes going to China in the final week, the downside risk could be significant towards the end of the week,” a trader tells SalmonBusiness.
The pull in demand is coming from the East. China imported close to 3,000 tonnes of fresh, air-freighted Norwegian salmon last week, according to statistics from the Norwegian Seafood Council.
“It has risen quite a bit, it really has. Chinese New Year comes to a halt, we have been through this before, and then a drop comes. They want packing on Monday and Tuesday, which have higher prices than the rest of the week,” an exporter comments.
Large differences
“Many are talking about NOK 90–94 ($9.00–$9.40/€7.83–€8.18) to farmers, but I don’t think we will get that again towards the end of the week. Some will probably ask NOK 100 ($10.00/€8.70) for 6+, but that is not the market price. There are very large differences in prices out there,” he points out.
“You probably hear many asking for very high prices. Maybe on Monday if you hit air-packed fish in the south. I have a feeling they are chasing prices unnecessarily higher. I miss stability,” he adds.
The big driver that has sent salmon prices straight up over the past two weeks is the major Chinese New Year holiday. This runs from 17 February to 3 March.
“It’s not just China that shuts down. All of Asia shuts down. South Korea, Thailand, Taiwan.”
“It’s allowed to say no,” he says laconically.
Risk
At the same time, fish supply is tightening.
“Some larger slaughterhouses are pausing. I’m hearing prices of NOK 94–100 ($9.40–$10.00/€8.18–€8.70). That’s a NOK 10 ($1.00/€0.87) spread. We haven’t sold anything, but it is absolutely certain that prices are roaring upwards,” says a farmer.
“There are several factors. China is at 3,000 tonnes this week,” he says.
“As we see it, 3–5 is at NOK 96 ($9.60/€8.35), 5–6 at NOK 97 ($9.70/€8.44) and 6+ at NOK 99 ($9.90/€8.61). It is driven by Chinese New Year. What people fail to sell today they will lose money on next week,” says an exporter.
“NOK 25 ($2.50/€2.18) up in two weeks. The market can’t handle that. That’s just how it is. The risk is completely insane.”
Several sources underline the price gap between early- and late-week sales.
“NOK 92 ($9.20/€8.00) on 3–4 and 4–5, and NOK 94 ($9.40/€8.18) on 5+. The market can only pay extra on Monday slaughter, not for the rest,” an exporter remarks.
“There is talk of prices up in the 90s. They are hyping it. Lower harvesting volumes and Chinese New Year, high prices and no ‘production fish’,” says another.
Unnecessary
“It will only intensify week by week towards Easter. It is as much Europe as other markets that are pulling this right now. There is simply too little fish,” says a farmer.
He sees significantly higher prices than all other sources:
“Right now we are getting between NOK 105 and NOK 108 ($10.50–$10.80/€9.14–€9.40) on all 3–6 delivered Oslo next week. There are not big differences on air fish (over six kilos – ed.) – we get exactly the same.
“It was an unnecessary fall and pessimism, based on tariff fear, currency and a bit too much fish from Norway, Scotland, the Faroes and Iceland at the same time.”