An increase in Canadian Atlantic salmon prices has started to close the unusual gap between Canadian and Chilean farmed salmon prices, several sources told Undercurrent News.
At the end of last month Undercurrent reported that prices of farmed Chilean salmon — typically known to be the least expensive farmed salmon on the market — had risen above Canadian salmon prices.
At the time the price gap between the two products was roughly between 30 cents and a dollar per pound.
But several sources said that although the gap still exists, they have seen the gap start to shrink over the past two weeks.
According to Undercurrent’s prices portal, the latest price for FOB Miami trim D Chilean salmon fillets have increased over the past two weeks, which some sources agreed has been caused by a drop in supply.
“My understanding of the Chilean situation was that there was a backlog of production from the strike, which when supply opened up, brought prices down. That surplus is now gone, supply and tightened and we have seen prices move back up,” Hamish Walker of Seattle Fish Company, a supplier based in Denver, Colorado, told Undercurrent in an email.
One source who wished to remain anonymous had predicted in early June that salmon supply out of Chile would drop off at the end of the month, and expected prices in North America to increase by 30%.
The most recent information shows price stands at $5.36 per pound, which represents the second rise in Chilean salmon prices following three consecutive weeks of price decreases, during which prices went from $5.91/lb to $4.97/lb, a jump of nearly 19%.
Although sources agreed that there has been a decrease in salmon supply out of Chile, one source said that he has not seen much of a corresponding price increase.
Art Kavoukjian, of Golden State Seafoods, an LA-based wholesaler, said prices of product coming out of Chile have been “pretty stable”.
“From what I’m experiencing the Chilean offers I’m getting are pretty stable, their pricing is set and I don’t see any movement [for the last two weeks], they brought the prices up close to $6 a pound to this west coast LA market, and it seems like they’re happy with that, so I haven’t seen too much change there.”
Canadian prices up ‘exponentially’
Prices of Canadian farmed fish, which is generally sold whole rather than filleted like the product out of Chile, has been increasing significantly over the past two weeks.
Bob Mankita — fresh fish buyer at JJ McDonnell, a supplier based in Jessup, Maryland — said that prices of farmed salmon coming out of Canada’s west coast “have been going up exponentially from last week, and the east coast market is following suit”.
He also added that with Norwegian producers on holiday, “taking some of that fish out of the market is just another driver and will push prices up.”
Kavoukjian also said that he has seen salmon prices out of Canada increase.
“Canada is up, way up…As far as the Canadians go, they are definitely pushing their prices up…to give you an idea, we were paying, at one point, as low as $2.40-$2.50 for our smaller sized 6-8s. [We’re] now paying $3.10,” he said.
Despite this, Canadian prices remain lower than Chilean, which has prompted some wholesalers to decrease the amount of Chilean product, opting for whole fish out of Canada.
“I’m sure everybody did that and they put more pressure on Canadian stock. At this time Chile would typically crash and burn because they would get stuck with product. But now that they don’t have that much fish they’re okay with not getting as many orders, so Chile maintains their prices high and the Canadians got all the business and raised prices. Now Canada’s inching their prices up,” Kavoukjian said.
Future situation uncertain
Mankita predicted that price patterns will eventually go back to what the market has generally come to expect: Canadian product priced higher than Chilean.
“[Prices] are going to be at even values [between Canadian and Chilean product], then Canada is going to be higher at some point,” he said.
However some think the situation may signal a larger shift in the market.
“I [don’t think] Chile can afford to be the cheap salmon anymore. I think this is going to start a new trend,” Kavoukjian said. “Every story ends with Chile losing money…it’s a terrible thing, how long can an industry continue to operate on a loss? It’s got to hit a wall somewhere.”
Moving forward, Kavoukjian said he expects the two products to be “more neck and neck” in terms of pricing. (webdesk/undercurrentnews)