Russia Turns to Patagonia Fjords to Sate Salmon Appetite

Aug. 11 (Bloomberg) -- Anastasia Amoroso, global market strategist at JPMorgan Funds, discusses how a food ban will impact Russian citizens and food producers in the European Union and United States. She speaks on “Bloomberg Surveillance.”

Salmon farms nestling in Chile’s Patagonian fjords are ready to satiate Russia’s growing demand for the fish after President Vladimir Putin blocked supplies from Europe, according to an industry consultant.

Chile has the capacity to boost supplies of farmed Atlantic salmon to Russia, Carlos Odebrecht, a consultant and former head of industry group SalmonChile, said by phone from Puerto Montt, Chile. The South American country, the largest salmon exporter after Norway, tripled sales of seafood to Russia last year to about $280 million, based on Bloomberg calculations using Chilean government data.

Putin banned food imports in retaliation against U.S. and European Union sanctions targeting its financial, energy and defense industries over support for separatists in eastern Ukraine. Norwegian salmon farmers Marine Harvest ASA, Salmar ASA, Cermaq ASA and Grieg Seafood ASA plunged in Oslo trading in the two days since the measures were announced, while Chilean producers Empresas AquaChile SA and Multiexport Foods SA gained more than 7 percent today in Santiago.

“This is a tremendous opportunity for Chile,” Odebrecht said. “Without a doubt prices will go up.”

Marine Harvest, the Oslo-based global giant, is also Chile’s largest salmon exporter from its Patagonian farms.

Virus Recovery

Russia is in talks with Chile to import more fruit, vegetables, fish and seafood, Russian food safety agency Rosselkhoznadzor said Aug. 7. The agency commented after its chief, Sergei Dankvert, met with Chile’s Ambassador to Russia Juan Eduardo Eguiguren in Moscow.

Chile has stocks of about 20,000 metric tons of frozen salmon that it could sell to Russia, Nordea Markets analyst Kolbjoern Giskeoedegaard said yesterday.

Norway and Chile compete in markets across the globe.

Chile’s salmon industry surged in the 1990s as Norwegian and local business groups discovered optimum conditions for farms in 2,000-kilometers (1,243 miles) of coastline dotted with fjords and inlets to meet surging worldwide demand. Salmon demand has leaped in the past decade as consumers seek proteins rich in Omega-3 fatty acids that lower cholesterol levels.

The South American country boosted exports 20 percent in the first quarter of this year as it regained market share in the U.S. and as demand surged among Brazil’s middle classes. Chile is slowly recovering from an outbreak of infectious salmon anemia in 2007 that ravaged farms and lost the country access to key markets in the U.S., Odebrecht said.

Farms in Chile now produce 800,000 tons a year, more than double levels before 2007 when the ISA virus spread.

To contact the reporter on this story: Matt Craze in Santiago at mcraze@bloomberg.net

To contact the editors responsible for this story: James Attwood at jattwood3@bloomberg.net Jim Efstathiou Jr.

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