Rabobank analysts bullish on salmon prices

HARD times are hitting consumer demand for farmed shrimp, but demand for salmon is set to remain resilient in the first half of this year. That’s the prediction from Netherlands-based Rabobank in its latest global aquaculture report.

The report, Global Aquaculture Update H1 2023, says that, worldwide, “recessionary behaviour” is affecting the market for seafood.

Gorjan Nikolik, Senior Global Seafood Specialist at Rabobank, said: “Shrimp demand is more affected than salmon, which seems to be resilient.”

The report says the firm demand for salmon, combined with tight supply, creates expectations for high prices in 1H 2023. However, costs for producers are also expected to remain high until later in the year.

Salmon supply growth in 1H 2023 is expected to return to positive, but remain low. The Norwegian government’s proposed tax on the industry introduces a key uncertainty, and if it becomes reality, Rabobank says, it will have considerable consequences for the industry.

Meanwhile, shrimp supply growth in 1H will be much lower than in 2022, but will still be positive, mostly due to Ecuador’s expanding production. According to Nikolik: “Softer demand for shrimp and high supply have generated a low-price scenario that will persist in 1H 2023. Although costs are below the peak, it is expected to be a very challenging period for shrimp farmers globally.”

China remains a source of uncertainty as the country’s economy emerges from a period of rolling lockdowns only to face a renewed threat from the Covid-19 pandemic itself.

Nikolik said: “Demand for shrimp and fish meal in China has increased, but it remains an unpredictable factor. China is back as the driver of demand, although its foodservice industry, at least in early 2023, will be impacted by fears of Covid infection.”

In spite of recent corrections in feed commodity, energy and freight costs, overall costs for producers are still high.

“Global supplies of fish meal and its co-product fish oil remain relatively stable. In 1H 2023, possible upsides in Peru and Chile are likely to be balanced by declining supply in Europe,” said Nikolik.

The ongoing global scarcity of feed proteins means fish meal prices are expected to be firm, despite the partial correction in soymeal prices.