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Flood of wild salmon drives down Chilean prices in US

Prices were forecast to fall progressively throughout the year, but the unexpected abundance of wild stocks has shocked markets. 

Unanticipated strong landings of wild Alaska salmon are fueling further drops in prices for Chilean salmon entering the US market.

Prices for Chilean fish have been falling since week 22, but the drip has accelerated over the past four weeks, falling to $4.84 (€4.12) per pound, a level not seen since week 11 of 2016.

According to industry players in Chile, the fall is explained by the “unexpectedly high landings of Alaskan wild salmon,” flooding the US fresh salmon fillet market.

“Over the fishing season and the following week, fresh sockeye volumes partially replace fresh farmed salmon in US supermarkets,” an executive at a Chilean salmon company told IntraFish.

“This, together with a higher availability of Chilean salmon following a recovery of the algal bloom losses, is affecting prices.”

The volumes of wild salmon were “very well above original forecasts,” which led supermarkets and traders to promote and give “a bigger space to wild salmon at the disadvantage of farmed salmon,” Derek Kohn, sales director at Australis, told IntraFish.

In addition, Atlantic salmon harvests normalized towards the end of the first half of the year, following a very low fourth quarter in 2016 and first quarter of 2017.

“Prices were going to fall in 2017, we knew that because they had increased beyond forecasts, but the fact that the fall was so concentrated over the past weeks is explained by the high availability of fresh wild salmon in the US market,” Ricardo Garcia, CEO of Camanchaca, told IntraFish.

According to the companies, the price softening has slowed in the past week and it will continue to do so as the supply of fresh wild salmon decreases.

“The wild season is finished, volumes were coming from the end of June until August, but the shock is over now, and fresh wild stocks are running out” Garcia said.

They all agree that prices should start stabilizing again, and stay at this levels during the remainder of the year, with a likely increase in September.

Jose Luis Vial, CEO of salmon farmer Ventisqueros, told IntraFish the fall in prices was an "abnormal and circumstantial reaction of the markets.

"Prices should go back to previous levels given the relative scarcity of the protein."

With the biggest impact of the algal bloom behind producers  -- it mostly hit production meant to be harvested from July 2016 to March 2017 -- the other side of the coin is a recovery of supply to normal levels, and some pressure on prices.

“This was expected, but I do not think that the recovery of volumes will be greater than the wild salmon overflow, so prices shouldn't fall further down,” Garcia said.

Read IntraFish coverage on the US wild salmon season here.

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