Norway poised to boost global salmon production in 2024, shrimp sector faces challenges

By Jane Byrne

- Last updated on GMT

© GettyImages/franckreporter
© GettyImages/franckreporter

Related tags Salmon shrimp algae bloom El Niño Ecuador Norway

Rabobank anticipates a rebound in the global salmon supply for 2024, breaking a two-year trend of negative growth.

The key driver behind this resurgence is the expected 4-5% growth in Norway's supply, fueled by enhanced productivity and an increased fish harvest.

While the Chilean industry prioritizes value over volume growth, the potential production for the year hinges on the risk of El Niño, as highlighted by analysts. Drawing from past experience, in 2015-2016, when a significant El Niño event led to a 15% year-on-year decline in Chilean supply due to an algae bloom, analysts remain cautious about potential weather-related challenges.

Despite this, the team acknowledges that the Chilean industry is now better equipped to handle such changes, potentially mitigating the impact and preventing a repeat of the dramatic decline witnessed in 2015.

Rabobank's Animal Protein Outlook reveals that salmon prices have become competitive again, following a correction from record levels in the second half of 2023 attributed to seasonal patterns and slightly weakened demand. The team predicts a softening of prices, but they are expected to remain at elevated levels, sustaining a period of high profit margins in the salmon industry.

Shrimp sector in oversupply scenario

Nevertheless, the upcoming year poses considerable uncertainty for the global shrimp sector, as highlighted in the Rabobank report.

To adapt to the challenging landscape of low prices and oversupply, the shrimp industry is anticipated to curtail production growth to a modest 0%-3% year-on-year in 2024, aiming to restore equilibrium to the worldwide market.

Ecuador, having experienced rapid supply growth in early 2023 due to enhancements in the supply chain and the reopening of the Chinese economy, is expected to face a slowdown in 2024. Factors such as increased domestic production in China, lower-than-anticipated demand, and elevated inventory levels are projected to contribute to this deceleration, with the seafood market specialists forecasting a potential 5% growth in 2024—significantly below the 12% growth recorded in 2023 in Ecuador’s shrimp sector.

Following a year of profitability challenges for Asian shrimp farmers, the report predicts these producers will reduce stocking densities in an effort to navigate the market dynamics.

The analysts caution that a decline in shrimp supply from Asia is imminent if substantial improvements in prices do not materialize before the crucial peak stocking period in early 2024.

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