Marine Harvest ASA, the world’s biggest salmon farmer, is finding other buyers for its salmon after Russia retaliated against economic sanctions with an import ban on food products.
“The fish that should have gone to Russia now are being redirected to other markets,” Ola Helge Hjetland, a company spokesman, said by phone today. He declined to say which countries the company is sending the salmon for delivery in “coming days” and at what price it would be sold.
Marine Harvest, controlled by billionaire John Fredriksen, and salmon farmers such as Salmar ASA, Cermaq ASA and Grieg Seafood ASA fell for a second day in Oslo after Russia banned imports of food products from the U.S., the European Union, Norway, Australia and Canada. Marine Harvest fell 3.8 percent to 76.45 kroner ($12.25) as of 1:25 p.m. in Oslo, extending declines to 13 percent since the bans were announced yesterday.
President Vladimir Putin slapped import bans on an array of foods in retaliation against U.S. and EU sanctions targeting its financial, energy and defense industries over support of separatists in eastern Ukraine. While Norway isn’t a member of the EU, it said it intends to follow the European sanctions.
Russia is the third-biggest importer of Norwegian salmon after Poland and France, contributing 332 million kroner in July, more than 9 percent of salmon export revenue, according to figures published by the Norwegian Seafood Council on Aug. 6. Russia made up about 3 percent of Marine Harvest’s revenue in the first quarter.
Pareto Securities AS reduced its third-quarter salmon price estimates by 8 percent to 33 kroner as a result of the ban and 13 percent to 35 kroner for the fourth, it said in a note today. The Oslo-based broker, which reduced its valuation for salmon producers by 5 percent, said prices may rise to 42 kroner a kilogram (2.2 pounds) in the first quarter as the market adjusts distribution, it said.
The import ban will create “some turbulence” in the short term, Salmar Chief Financial Officer Trond Tuvstein, said by phone today. “This will put pressure on prices” as producers seek new buyers for seasonally higher third-quarter production that Russia would normally have absorbed, he said.
Russia will continue to import salmon from other countries, opening opportunities for Norwegian fish on the global market where supply growth will be “limited” in 2015 and 2016, Tuvstein said.
“New trade patterns will be able to establish themselves,” said the executive, who declined to comment on how long that would take. “This will stabilize. We’re confident that we’ll find buyers for our salmon.”
To contact the reporter on this story: Mikael Holter in Oslo at email@example.com
To contact the editors responsible for this story: Will Kennedy at firstname.lastname@example.org Stephen Treloar, Jonas Bergman