Norwegian Farmed Fresh Atlantic Salmon Export Volume Falls as Prices Soar to New Highs

According to Norway Statistics data, cumulative Norwegian exports of farmed fresh or chilled Atlantic salmon in Q1 2023 (Weeks 1 to 13) registered their lowest volume for comparable periods since 2017, at 201.9 thousand mt. This represents a decline of 11% year-over-year (YoY)

On the other hand, export prices averaged their highest level since at least the year 2000 (for the first 13 weeks of the year) at NOK 105/kg this 2023. This represents an increase of 33% YoY. In turn, this sharp growth in prices caused export value to rise to a record high of NOK 21.2 billion during the same period, up 19% YoY.

Source: Tridge and Statistics Norway

As the graph above shows, there’s a clear negative correlation between exported volume and prices. This indicates that demand has been sensitive to price hikes and that there is a lower supply of salmon.

According to Akvafakta, from Norway’s Seafood Federation, salmon biomass in February 2023 was down 1% from the previous year, at 746 thousand mt. Stocked salmon was 3.0 million, down 34% compared to the previous year. Adding to the bullish sentiment, there is also concern over the Norwegian government's new tax proposal, first announced in September but which was recently modified and detailed further. Its main feature consists in a 35% resource-rent tax applicable to fish farms’ profits exceeding NOK 70 million. It will be applicable from January 1st of this year, but it has yet to be voted on by Parliament. The proposal could be modified further before it turns into law. As it is, it is expected to further pressure down production, as the incentives for more output diminish.

Prices could peak soon and decline in the upcoming months in accordance with their seasonal trend (typically reach their highest level in the year by week 20), but in terms of year-over-year change, they are likely to remain above 2022 levels, perhaps in the double-digits. If the Norwegian tax law is enacted as it was proposed, it will likely hamper domestic supply, which could further pressure prices up. Despite lower numbers reported in early 2023, there are still expectations of higher supply as the year progresses. But demand and production costs are expected to remain high, capping the downside of prices.

Source: Tridge and Norway Statistics