Continued civil unrest is threatening to paralyze the Chilean salmon industry with the sector working at around 50 percent capacity at the moment, Blumar CEO Gerardo Balbontin told IntraFish on Thursday.
With the political situation remaining uncertain, Balbontin said it's hard to see a quick solution. "The salmon sector is running at 50 percent but with the uncertainty in the next few days it could be paralyzed completely."
"It's a mess," is how one Chilean salmon importer based in Miami described the situation to IntraFish on Thursday morning. He said roads necessary for moving fresh product from farms to the company's processing facilities were blocked last night and today. "We have not been able to get any product out," he said.
He described the current situation as "a bit more concerning" than similar demonstrations in the past, which tended to be smaller. "...The strength of the movement seems to be increasing," he said.
The importer said he is working to keep his US customers updated but the situation on the ground in Chile is fluid and it is unclear how long the supply interruption will last.
David Caslow, Co-CEO of Acme Smoked Fish, one of the largest salmon smokers in the United States, said expectations are that just 30 percent of normal fresh salmon volumes will be shipped from Chile this weekend, which certainly could impact US buyers heading into next week.
Acme's supply from Chile depends more heavily on frozen salmon shipped from the country. And while Caslow said he doesn't believe any shipping freight is going out, there is a three to four week lag in the transportation of frozen sea-shipped product versus air-freighted product, so the company has a bit more of cushion than those in the US relying solely on fresh fish flown in daily.
News of potential salmon shortages has now reached the Brazilian media, with Ederson Krummenauer, director seafood distributor Frumar, telling the press that 70-80 percent of salmon sold in the southern city of Porto Alegre is flown in from Puerto Montt.
The situation may not be helped by a general strike by 6,000 Chilean customs workers, although at this point its unclear whether and to what extent this is further hampering efforts to fly salmon out of Chile.
Unrest erupted a week ago after a price hike was announced for fares on the metro in Chile's capital city of Santiago. Protests spread as demonstrators displayed their anger over a number of issues, including social inequality.
Despite an apology on Tuesday evening from Chilean President Sebastian Pinera, who unveiled a package of measures aimed at quelling the disorder, protests have continued. Some regions have been operating under a state of emergency that has seen curfews imposed.
The curfews have forced salmon processing operations and other business to temporarily suspend night shifts at their facilities, which is also contributing to a slowdown in salmon production, said Franco Adam, managing director of Acme Chile in Puerto Montt.
Adam said he is hopeful the supply chain will begin to correct itself next week, but noted that next Thursday and Friday are holidays in Chile, which means many workers will be off and businesses will be closed.
"The situation appears to have past from the havoc stage and now is headed into the negotiations stage," Acme's Caslow said, pointing to some potential good news on the horizon.
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