June 8, 2018 / 12:26 PM / 6 months ago

UPDATE 1-Norwegian salmon price seen recovering to NOK 63-64 next week

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OSLO, June 8 (Reuters) - The price of Norway’s farmed salmon is expected to rise to about 63-64 Norwegian crowns ($7.79-7.91) per kilo next week for deliveries in Oslo, in a partial recovery from recent sharp declines, two industry sources told Reuters on Friday.

Initially, prices for this week had been expected to drop 13-14 percent to 55 crowns, but came out somewhat higher at around 57-58 crowns, the sources said.

Stronger demand, triggered by the fall in prices from around 80 crowns two weeks ago, was the main explanation for the rebound, the sources said.

“We expect 63 to 64 crowns, or maybe higher. I fear prices are rising too fast and that we will have a backlash again. There is some madness in this market,” said a salmon producer who declined to be named.

“It’s not lower volumes,” he added.

A fish exporter also predicted a sharp rebound.

“We expect prices to rise 6 crowns to 63 on average in Oslo,” he said, adding that some customers were buying fresh fish to stockpile in freezers whenever prices fall below 60 crowns.

Norway is the world’s top salmon exporter, with fish farming the Nordic country’s second-largest export industry after oil and gas production. 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. Their shares were rising from 1.7 to 2.4 percent on Friday. ($1 = 8.0872 Norwegian crowns) (Reporting By Ole Petter Skonnord, editing by Terje Solsvik)

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