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Multiexport CEO anticipates favorable salmon market through 2019

‘Global demand will continue to grow above production,’ executive says.

With low growth in Chilean salmon production and no growth expected in Norway, the salmon industry is posed for an optimistic short and medium term, Andres Lyon, CEO of Multiexport told IntraFish.

“Next year we should see a reduction in volumes, or at least no growth at all, coming from Norway, and a little increase from Chile, which should keep prices strong,” Lyon said.

“Demand will definitely keep growing ahead of production.”

The current salmon biomass in Chile and Norway, as well as factors affecting production such as sea lice, suggest growth will be moderate going forward.

"Looking into different indicators such as feed sales in Norway, water temperatures, the amount of fish currently in the water and the size of these fish, you can see that the evolution for production growth is not good,” Lyon said.

According to the latest salmon overview by bank ABG Sundal Collier, feed sales between week 29 and week 36 in Norway were behind those during the same period a year earlier, showing a reduction in feeding volumes and indicating slower growth during the period.

"The year-on-year biomass growth in Norway has vanished after some months of high harvest volume growth and poor biomass growth,” said the report.

“The main reason is an increasingly challenging sea lice situation forcing salmon farmers to increase sea lice treatment activity, leading to loss of feeding days.”

Chile has a good performance in terms of productivity, it has increased volumes in 2018 but those are volumes that are already forecast, Lyon said.

According to the current biomass, salmon production should not increase more than 5 percent in Chile in 2019, he added.

With 80 percent of the global supply coming from Norway and Chile, an increase in production from any other origin should not have an actual impact in global supply, Lyon said.

However, he said that a 17 percent increase in salmon production volumes expected in Scotland in 2019 follows a decrease of 14 percent in 2018, but the effect should not be that noticeable.

Overall, global supply is expected to grow between 2 percent and 5 percent in 2019, with demand increasing 6 percent to 7 percent year-on-year.

“The price outlook through 2019 remains very positive,” Lyon said.

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