Salmon Price Increase - Partly Seen as a Jump up to a "New Normal"

Short-term and temporary drivers behind the price spikes seen in the past weeks. 

The extent of this spot price increase, especially on the European scenery, has already been a hot topic for weeks. Knowing that the combination of a close to unprecedented supply decline seen this winter/spring, with HORECA-segments throughout the continent, eager to re-open and make up for lost time, the upwards pressure in the price dynamics is obvious. However, there are other drivers that have notably contributed to the changes in the spot price that are not as easy to track and quantify.

For the first quarter of 2022 versus last year, the combination of a lower share of the European total harvest has been available as fresh whole, and certainly as superior. In addition, the contract share has increased notably, further reducing the availability of “free uncommitted” salmon in the spot market. Our calculations suggest that the volume change during the quarter for this specific volume, declined by more than 3 times the rate, than the full harvest volume.

Still, with the macro-picture in mind, with cost increases on raw material/cost inputs for salmon, increase on other and competing proteins, as well as commodities in general, we believe that part of the price increase seen is also a jump up to a “new normal”.

More importantly, and the major rational behind our belief, is perhaps that there are no new indications that suggest either a long-term supply growth stronger than we have anticipated, nor that demand will weaken.

This is an extraction of the Monthly Salmon Report. For more insight such as this, make sure to subscribe to our monthly report here. 

Image: Shutterstock by reinatsu27