(Adds quotes, prices, data)
By Ole Petter Skonnord
OSLO Aug 8 Norwegian salmon prices are expected
to fall 10 percent in the next week as a result of Russia's food
sanctions, traders and analysts said on Friday, forcing farmers
to scramble for new markets at a time when prices are already
Russia, which consumes nearly 7 percent of global salmon
production, banned all Norwegian seafood on Thursday, along with
a wide range of agricultural products from countries which have
imposed sanctions against Russia over its role in the Ukrainian
The ban also comes at a sensitive time for the market as
salmon prices are already down around 30 percent from record
highs hit at the start of the year, due in part to lower
consumption during the holiday period and increased production
as fish grow during the summer.
Market sources said they expected salmon prices to fall to
around 30-31 Norwegian crowns per kilo for delivery next week
from around 34 kilos a week earlier, and added the market was
Norway is the world's biggest fish farmer and accounts for
about 50 percent of the global salmon trade, well ahead of world
number two Chile. The sector exports nearly $1 billion of
seafood each month, including about a tenth of its salmon
produce to Russia.
"Russia has been a very unpredictable market so far but now
it has become predictable... We'll be selling nothing perhaps
for one year or more," said Klaus Hatlebrekke, vice president
for marketing at fish farmer Norway Royal Salmon.
He added however that "salmon bound for Russia next week is
being sold to other markets and that seems to be going well,
though at lower prices."
Brokerage Carnegie said the import ban situation in Russia
had created an overhang of around 120,000 tonnes (of salmon) but
added that would "be absorbed by global demand growth in the
next 6-12 months."
Russia will eventually replace some of its imports with
produce from places like Chile, creating opportunities for
European salmon elsewhere, letting the market settle over the
next few months, especially as supply growth is seen limited and
other markets are growing rapidly, analysts added.
Salmon farming shares fell for a second day in a row on
Thursday with world number one Marine Harvest down 4.5
percent, Grieg Seafood 7.9 percent lower, and Cermaq
down 3.9 percent.
(Writing by Balazs Koranyi; Editing by Sophie Walker)