October 17, 2016 / 12:52 PM / 2 years ago

Lower expected Norwegian salmon output support prices

OSLO, Oct 17 (Reuters) - ** The world’s biggest salmon producer, Marine Harvest, on Monday cut its 2016 production guidance due to lower output in Norway, with new 2016 and 2017 guidance well below analyst expectations ** Broker Norne Securities says the 20-percent miss in guided volumes for the fourth quarter explains why Norwegian farmers last week achieved 60 crowns ($7.41) per kilo compared to close to 50 Norwegian crowns per kilo a month ago ** Norne says this is also why the price for one-year contracts last week jumped to NOK 63 per kg from NOK 57 per kg ** Marine Harvest says biological issues are reducing production. It will not give further details about its Q3 results before the full results are published on Nov. 2, CFO Ivan Vindheim told Reuters ** Marine Harvest’s new 2016 guidance of 381,000 tonnes is a drop of 9 percent against its 2015 production. It has 61 percent of its estimated 2016 production in Norway and the rest in Chile, Scotland and Canada ** Norway is the biggest salmon producer in the world ahead of Chile with more than 50 percent of global supply in 2016 ** The Norwegian Seafood Federation expects a 5-percent drop in Norwegian salmon production in 2016 to around 1.235 million tonnes compared with 2015, the federation’s head of aquaculture, Jon Arne Groettum, told Reuters on Monday, which is about the same as he expected in an interview on Sept. 21 ** For 2017, Groettum expects a further decline in volumes in Norway, with lower volumes in the first half next year and slightly more in the second half ** Groettum says at the end of August there was two percent less fish in the sea for salmon generation which should be harvested this autumn and the first half of next year compared with the same time a year ago ** For salmon expected to be harvested in the second half of 2017 there is 1 percent more fish in the sea, he said * Groettum says sea lice problems is cutting back on production but he is convinced Norwegian producers will win back the control * Groettum says producers have initiated so many measures against sea lice, so there will be a solution. But it is difficult to know how long it will take * Broker Norne says the trend with tight volumes and higher prices will continue for the rest of the year * Norne says the most pure farming stocks, Grieg Seafood and Norway Royal Salmon, will benefit most from Marine Harvest’s lower output guidance

$1 = 8.0919 Norwegian crowns Reporting by Ole Petter Skonnord, editing by Gwladys Fouche

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