High salmon prices will continue into 2024 – Bakkafrost chief

Bakkafrost CEO Regin Jacobsen remains in positive mood despite various challenges at its Scottish and Faroe Island farming operations.

He told shareholders in the company’s third quarter report yesterday that the supply growth was likely to remain low for the coming quarters.

“The Chinese market has gained momentum and we have also increased our market share to US customers,” he said.

Measured in euros, salmon spot prices were 9.2% higher this quarter compared to Q3 2022. This was due to reduced supply and strong demand from China and the United States.

Jacobsen expected the strong salmon prices to continue into and throughout the first half of next year.

Regin Jacobsen, Bakkafrost CEO

But, as in Norway, tax remains a thorny issue for the Faroe Islands. Jacobsen said: “Due to the changes to the Faroese revenue tax, we will reduce production of value-added products for the contracted retail market.

“Therefore, we have only secured contracts for next year for 9% of the total harvest, compared to 22% the same time last year. This will have negative impact on the activity in this segment in 2024.”

There was 1.4% reduced salmon supply during the quarter which also included inventory movements.

“Without inventory movements, the reduction was 2.8%, according to the latest estimate from Kontali Analyse.”

The CEO added: “Bakkafrost has a strong focus on ensuring a well-balanced flow to the different markets to increase diversification and mitigate market risk.

“The global salmon product market’s long-term balance is likely to favor Bakkafrost. Bakkafrost has a long value chain and a cost-efficient production of high-quality salmon products and will likely maintain financial flexibility going forward.”