Salmon price

Supply is led above all by Norwegian production, which accounts for about 50% of the global farmed Atlantic salmon market, or roughly 1.6 million tonnes a year, according to the Norwegian Directorate of Fisheries. Norway’s growth is constrained by a biological ceiling: sea lice pressure, periodic algal blooms, low dissolved-oxygen levels during warm summers and the regulator-set maximum allowed biomass (MAB) together prevent production from responding flexibly to demand. That makes salmon a structurally tight commodity.

The Norwegian resource rent tax is another major market factor. Norway’s parliament imposed a 25%, profit-based additional tax on sea-cage salmon farming, using a similar rationale to hydropower and oil: part of the rent from a natural resource is captured by the state. The tax directly affects operating margins at the three largest Norwegian producers — Mowi, the world’s largest salmon producer, SalMar and Lerøy Seafood — and also feeds into longer-term supply through investment decisions. Chilean diseases repeatedly create supply shocks. Chile is the second-largest producer, at about 750 kt, but dense stocking and the hydrology of the southern fjords make fish particularly vulnerable to the ISA virus and SRS bacterial septicaemia. A serious outbreak can curb Chilean output for months. As Chile is the other major global supplier alongside Norway, such events are reflected directly in the Fish Pool index.

On the demand side, US, European and Asian retail are the main drivers. Fresh salmon fillet is a staple for European supermarket chains and the Japanese and Korean sushi industry, while smoked salmon and portioned fillets are regular products in the western premium segment. Scottish production at about 200 kt, Canadian output at about 120 kt and Faroese output at about 95 kt add to this global supply base. The Faroese producer Bakkafrost, for example, sells at a premium because of colder waters and integrated feed production. Low demand elasticity, as consumers do not easily switch to other proteins, supports higher price levels.