‘Too much supply and not enough demand’: Surprise Xmas price drop hits spot market

by
Aslak Berge

Norwegian salmon farmers face tough Christmas season.

As the Christmas holiday draws near, the fresh market is bustling with activity, yet it’s proving challenging for both buyers and sellers.

“We’re definitely feeling the pressure. There’s simply too much fish for the market to absorb. We’re even selling our last trucks at a loss of 5-6 NOK (€0.43-€0.51 / $0.46-$0.55),” a buyer explained to SalmonBusiness.

“The industry’s really hit a slow patch. The fresh market, which usually picks up around this time, isn’t performing as expected. We’ve got too much supply and not enough demand. This year’s Christmas sales are shaping up to be quite different from what we’re used to. Customers are getting the prices they want,” he elaborated.

He shared the current prices for farmers in Northern Norway:

  • 2-3 kg: 68 NOK (€5.78 / $6.26)
  • 3-4 kg: 75-76 NOK (€6.38-€6.46 / $6.90-$6.99)
  • 4-5 kg: 77-78 NOK (€6.55-€6.63 / $7.09-$7.17)
  • 5-6 kg: 78 NOK (€6.63 / $7.17)
  • 6+ kg: 80 NOK (€6.80 / $7.36)

“The market’s pretty firm right now. It’s tough to get any movement on prices,” he added.

A Challenging Week

“It’s been a tough week, and it looks like next week will bring even more challenges with increased volume. We need to reduce prices significantly. If we can’t secure the prices we need, we’ll have to opt out where we can,” an exporter told SalmonBusiness.

“Right now, it’s all about proactive selling. We’re not getting any inquiries. And with the influx of fish from the weekend’s slaughtering, we’re looking at having to drop prices by 4-5 NOK (€0.34-€0.43 / $0.37-$0.46). Even then, it’s a tough call,” he confessed.

“Buyers are just not interested in purchasing fish that will be slaughtered next Tuesday and Wednesday. The risk for us next week is extremely high.”

On the Hunt for Sales

“I’ve been hearing prices around 75, 76, 77 NOK (€6.38, €6.46, €6.55 / $6.90, $6.99, $7.09), but I’m hoping we can shave off another NOK. It seems like many are still dealing with excess stock from last week. The market is eerily quiet unless you’re actively out there looking for sales,” he continued.

He noted that larger fish are less abundant, with prices trending towards 83 NOK (€7.05 / $7.64).

Other breeders contacted by SalmonBusiness described the market as “quiet and on standby.”

“Next week looks like it’ll be heavy on smaller fish. I’ve managed to get lower prices for 1-5 kg sizes. The larger sizes, 5+ kg, seem to be holding their value better,” a buyer mentioned. He referred to prices of 70 NOK (€5.95 / $6.44) for 2-3 kg, 76 NOK (€6.46 / $6.99) for 3-4 kg, and 78 NOK (€6.63 / $7.17) for 4-5 kg – to breeders in Northern Norway.

Market participants observed that the high volume of fish distributed earlier this fall is leading to lower sales volumes this December.

“The Christmas market hasn’t lived up to our expectations. We’ve faced another week of downward pressure on prices. Most were paying around 79-80 NOK (€6.71-€6.80 / $7.27-$7.36) last Friday. Trading has been challenging, with prices consistently 2-3 NOK (€0.17-€0.26 / $0.18-$0.28) below expectations,” an exporter revealed.

He also mentioned that he hasn’t made any purchases so far today.

SalmonBusiness collects spot prices for salmon every Friday after lunch. These are for fish to be delivered the following week, contacting various links in the value chain, including breeders, exporters, and importers. At least five independent sources are always used, although not all are printed. The sources vary each time.

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