Chilean Salmon and Trout Industry Booms Due to High Global Demand

January 2021 was not a very optimistic month for Chilean farmed salmon and trout exporters, as trade was still heavily affected by numerous closures of economies in the main destination markets. UN Comtrade data show that Chile's shipments of the mentioned fish were $438.1 million worth, down 14% year on year. However, the situation improved significantly during the following months of 2021, as international trade was quickly rebounding following COVID restrictions. The export values for each month from February to December 2021 were higher than in 2020. The most substantial growth was registered in November when Chile's deliveries exceeded $544.7 million, 50% more than in November 2020. This has helped the country's sales to go back to pre-pandemic levels.

Source: UN Comtrade, Chile Salmon Council

Positive trade dynamics are attributed to the increase in export prices. In November 2021, the export price for Chilean salmon averaged $8.37/kg, 63% more than in the comparable month last year. From June through November 2021, the average price for the mentioned fish was 55-69% more than in 2020. There are two main factors behind a price leap. The first factor is limited supplies of farmed salmon and trout in Chile in 2021, which led to a fall in export quantities. The export volume of salmonids in 2021 decreased by 7% year on year and stood at 723,689 tonnes. After a significant drop in seafood export prices in 2020 amid lockdowns in the key importing countries to tackle COVID spreading, Chilean salmon farmers decided to reduce production to avoid profit losses. According to preliminary industry expert estimates, salmon and trout output in 2021 was expected to be 14% lower than in 2020 at 915,038 tonnes.

Source: UN Comtrade

The second factor is the recovery in import demand in 2021. As nations worldwide were ramping up on vaccinating the population, economies started to open quickly. This boosted the reponing of the gastronomy and catering sectors, which accounts for the lion's share of salmon consumption.

The USA drives export sales

The US was the biggest importer of Chilean salmon and trout in 2021 and accounted for 44% of all exports in value terms. Exported volumes to the USA jumped to 239,600 tonnes, showing an increase of 7.7% year on year. After numerous closures, the reopening of restaurants has helped boost the appetite for salmon in the domestic market. On top of that, retail sales of salmon have been growing strongly since the beginning of 2020, as people started cooking at home more amid lockdowns. US fresh salmon sales totaled $1.2 billion, 9.3% more than in 2020 and 28% up from 2019 figures.

Source: Chile Salmon Council

Salmon and trout exports from Chile to Brazil were $668 million in 2021, showing a 63.5% increase versus 2020. Export volumes grew by 4.4% year on year to 127,200 tonnes in 2021. The main reason behind a positive trend is the willingness of the local population to eat healthier as a reaction to the current pandemic. Contrary to USA and Brazil, Chile's salmon and trout exports to China did not show promising results last year. Chile's exports of the mentioned seafood to the major Asian economy plummeted to $103 million in 2021, down 23.4% from the 2020 level. Quantity-wise, shipments dropped by 47% compared with 2020 to 16,090 tonnes. After finding traces of COVID-19 in frozen seafood packages and on cutting boards for salmon in one of the local markets capped domestic consumption in the country. Due to health reasons, all seafood consignments in China were subject to more strict hygiene inspections, which created delays in deliveries.

However, the end of the year brought some cheering news to Chilean exporters. On December 15, 2021, the Chinese Ministry of Finance announced a temporary tariff reduction on selected seafood, including salmon, to create sufficient supplies ahead of r the upcoming Olympics. Starting from January 1, 2022, the tariff rate for Atlantic salmon (HS code: 03021410) has decreased from 10% to 7%.

Sources

Roda International. From next year, China will reduce 954 commodity import tax rates, and salmon, pollock, and redfish are on the list.
Consejo del Salmon Chile. Annual Salmon Export Report
Seafood Source. Chile’s salmon exports jumped 33 percent in Q3, with US market leading recovery
Food and Agricultural Organization. Farmer margins squeezed by COVID-19 impact but 2021 looks brighter

Seafood Source. US fresh, frozen seafood sales hold gains through first half of 2021

Food and Agricultural Organization. Optimism persists in farmed salmon sector despite price lull