Marine Harvest, the world's largest salmon producer, recently released its 2018 annual report.
The annual report shows that the interest and pre tax profit of Meiwei's annual market operations in 2018 was 752.8 million euros, which is a decrease from 792.1 million euros in 2017. The main reason is the increase in supply, and the reference price of salmon has decreased by 1.9% from its high level in 2017.
The demand continues to grow, and the salmon industry has great potential
From the annual report of Meiwei, it can be concluded that the demand for salmon is showing a continuous growth trend. In the fourth quarter of 2018, the demand for salmon in the US market increased by 18.5%, while the consumption of salmon in China increased by 38% year-on-year during the same period.
According to Gorjan Nikolik, an analyst at Rabobank, the future salmon industry is predicted to have a conservative algorithm of 4.4% annual demand growth. By 2028, global salmon consumption will reach 3.5 million tons, which is 1.2 million tons more than the current production (2.3 million tons), equivalent to Norway's annual production.
The rise of emerging markets such as fresh e-commerce has become a growth engine for the salmon industry and paved the way for the development of the domestic salmon market.
As supply and demand increase and prices fall, salmon may usher in a new consumption boom
According to data released by the Norwegian Bureau of Statistics, the average export price of Norwegian fresh salmon in the 18th week of this year was 62.85 Norwegian kroner/kg (approximately 6.43 euros/kg). The price has dropped by 10% compared to the previous week and by 12% compared to the same period in 2018.
Norwegian investment bank Fearnley Securities predicts that "prices plummeted by 20% year-on-year in the second half of 2017, and the same situation is likely to occur this year.".
Fearnley Securities also stated that global salmon production is expected to increase by 9.8% in the second half of 2019, with an increase of 57000 tons in absolute output in the third quarter and 59000 tons in the fourth quarter. The annual output is expected to increase by 7%.
Based on Meiwei's 2018 annual report and Q1 2019 quarterly report data, we can reasonably estimate that the salmon market may usher in a new round of consumption boom in the second half of 2019.
