November 17, 2017 / 1:37 PM / a year ago

UPDATE 1-Price of Norwegian farmed salmon seen down to 2-yr low again next week

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OSLO, Nov 17 (Reuters) - The price of Norwegian farmed salmon is expected to drop again to a two-year low in a range of 42-45 crowns next week, down from about 50-52 crowns this week, industry sources told Reuters on Friday.

The sources said there was a “wait-and-see” mood and so far limited salmon volumes were traded but the direction was clear.

“It’s down 10 crowns to 42 crowns per kilo in Oslo. It’s the most dramatic drop I can remember,” one exporter, who declined to be named, said.

“High prices (earlier this year and in 2016) has reduced our market. Now volumes are increasing and neither the Russian or Chinese markets are there. I expect it to be worse before it gets better and probably prices below 40 crowns,” the exporter added.

Another exporter said so far he had not made any trade but expected prices back to the level seen last week or around 45 crown per kilo in Oslo.

“I am very excited about the volumes, in recent weeks we have seen between 18,500 tonnes to 19,000 tonne per week. In light of the price correction I hope we have slaughtered above 19,000 tonnes this week,” the exporter said.

Final price and volume figures for this week are settled on Tuesday next week at the Nasdaq Salmon bourse.

A producer, also unnamed, confirmed the price drop.

“So far it’s quiet, but we are talking about prices between 40-45 crowns. Probably we will end around last week’s level (45 crowns),” the producer said.

He said the decline was volume driven and the two biggest players, Marine Harvest and Leroey Seafood, were expected to increase slaughtering.

Salmon prices peaked at around 80 crowns per kilo in early January at a time when supply constraints supported prices, but have since fallen as volumes grew.

Norway is the world’s top salmon exporter, and the share price of listed farming companies depends heavily on changes in the price of fish.

Average production costs for whole fish, including the cost of harvesting, rose by 13 percent to 34.29 crowns per kilo in 2016, according to data from the Norwegian Directorate of Fisheries.

Leading Norwegian producers include Marine Harvest, Salmar , Leroy Seafood, Grieg Seafood and Norway Royal Salmon. (Reporting by Ole Petter Skonnord, editing by Gwladys Fouche)

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