Seller drought results in record high contract prices

Fewer sellers has seen the annual contract for 2023 trading at NOK 90.00 (€9)/kg at Fish Pool. 

Sellers have been withdrawing from the market over concerns about how the Norwegian government’s new salmon tax is set to be calculated, as the current proposal is that it should be calculated according to the standard price and not the actual income for the fish farmer.

Basing the new tax on this system could destroy demand for Norwegian salmon, the CEO of Fish Pool, Søren Martens, has warned, highlighting how the government’s proposal is having a dual negative effect on contracts.

“If the spot price is higher than the contract price, the fish farmer loses the contract and must pay 51.3 percent tax on the difference. If the spot price is lower than the contract price, the fish farmer wins the contract and saves 51.3 percent tax on the difference,” Martens stated.

This proposed tax, combined with concerns about the fluctuating salmon prices, means fish farmers might only want to take on contracts if they are reasonably confident that the spot price will be lower than the contract price.

“Norwegian fish farmers have done a fantastic job of developing demand. Stability in price and deliveries has enabled product development and the sale of more consumer-friendly products in supermarket chains all over the world. More and more consumers have put salmon on their shopping list and contributed to a growth in demand that few other foods have had…But we fear that the new tax will destroy the market for Norwegian salmon. Such contract prices are demanding for grocery chains and can lead to less shelf space for salmon,” Martens warned.

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