Grieg Seafood is a part of a global salmon market. Aiming to be a leading player in the aquaculture industry, we supplied approximately 3 % of the global harvest volume of Atlantic Salmon in 2018, aiming to grow this to almost 5 % by 2020.
GLOBAL MARKET DEVELOPMENT IN 2018
The global harvest of Atlantic Salmon increased by 5.4 % in 2018, continuing its upward trend. Global sales of Atlantic farmed salmon are estimated to be 2 418 000 tonnes WFE (whole fish equivalent), up from 2 294 000 tonnes in 2017. The largest contributors to the increase in supply comes from Chile, Norway, and Canada, with an increase of 113 000, 45 000, and 6 000 tonnes, respectively. The Chilean industry has mustered an impressive recovery and growth after its difficulties in 2016, while Norway has seen incremental growth in harvest volumes as farmers have adapted to challenging biological conditions over the past few years. The UK and the Faroe Islands on the other hand experienced a reduction in harvest volumes of, respectively, 24 000 and 9 000 tonnes.
It is estimated that consumption in all major markets increased in 2018, except for Japan which decreased by 8 %. The largest relative increases in consumption were found in the USA and Russia with 9 % and 32 %, respectively.
Salmon spot prices noted on Fish Pool have been relatively stable throughout 2018, however there was a notable price hike from March to May. Prices normalized during the second half of 2018 and ended the year on similar levels as 2016 and 2017. Over the last five years the average price of Atlantic Salmon has increased notably, with the main increase from 2015 to 2016 and onwards. The 12 months average Fish Pool Index for 2018 was NOK 60.76 compared to NOK 60.88 in 2017.
GLOBAL MARKET EXPECTATIONS
Kontali estimates an increase in harvest volumes of Atlantic Salmon by 6 % worldwide, from 2 418 000 tonnes in 2018 to 2 561 000 tonnes in 2019. This is estimated to be driven by a 5 % increase in Norway, 3 % in Chile, 17 % in the UK and 1 % in Canada.
At year end 2018 the consensus is that the global demand for Atlantic Salmon will remain high, and with the limited possibilities for increase in harvest volumes, prices will remain high. Future prices on Fish Pool are high and indicate an expectation of salmon prices in the range of NOK 55-65 both in 2019 and 2020.
Looking further ahead, there is a consensus in the market of a modest organic growth in the existing open pen coastal industry. This development will primarily be driven by the opening of new sites and areas for farms, new and improved technologies and farming practices, and better cooperation both between industry players and with authorities. In addition to this incremental growth, more experimental attempts at producing salmon, either offshore or on land, may supplement the traditional salmon farming industry with additional volumes in the long run.
For the past 25 years, literally all new supply volume of fish has come from aquaculture. Wild fishing has long been facing issues of smaller catch, quotas, and other sanctions from different authorities. Since 1990 the volume of farmed fish has multiplied more than six-fold, with salmon making up less than 2.5 % of the volume.
In line with the ongoing global megatrends of health and sustainability there has been an increased interest in the health and potential environmental benefits that can be gained from sustainable aquaculture. At the moment, Europe is the largest and most mature market for Atlantic Salmon, consuming more per capita than other continents. There are, however, countless ongoing initiatives to introduce salmon to ever new consumers across the world. An
increase in consumption per capita in large markets and growing economies such as the USA, Brazil, China, and India is expected to contribute to increased demand for Atlantic Salmon over time.