Norwegian farmed salmon prices are swinging close to the NOK 40
(€4.05/$4.46) mark this week, however, analysts are unsure how long the low
will last. "We believed prices hit bottom, but they've fallen even further,"
Nordea Markets Senior Analyst Kolbjorn Giskeodegard said. "In a nutshell, there seems to be an imbalance the amount of salmon in
the market and how much the market can take." Price levels are now close to production costs for some salmon businesses
-- a situation that most companies haven't experienced in 4-5 years. Norwegian exports of salmon are up more than 30,000 metric tons compared to
last year, while exports are also increasing from the United Kingdom, Iceland
and the Faroe Islands. Ironically, the improved production is the result of improved fish health. "The industry had been struggling with biological issues and growth
for several years but is now doing better than it has in a long time," the
analyst said. Demand for the fish is weaker than normal, however, driving prices lower
than what the stock market expected, Danske Bank Equity Analyst Knut-Ivar
Bakken says. Prices may remain on the low until after October according to Bakken's
expectations. Given the low price level, Danske Bank has settled for a "hold"
recommendation on most listed salmon company stocks. Leroy Seafood is Danske Bank's top recommendation in salmon shares at the
moment, the result in part of its "large smolt" strategy. Salmon shares have fallen about 5.1 percent over the past week on the Oslo
Stock Exchange, but are up 4 percent so far this year. The consensus is that analysts' expectations of salmon farming companies'
earnings are too high and need to be downgraded, Bakken said. 
| 
