THE stock market value of Norway’s main fish farming companies has suffered unusually large falls over the past week as the spot price of salmon continues to drop back.
The combined worth, which included such giants as Mowi, SalMar and Lerøy, was down by 14 billion kroner (£1.2 billion) at one point, although the market did later make a modest recovery.
The situation is in stark contrast to that of just three months ago, when aquaculture companies were being flagged up as a safe haven for investment opportunities.
It has left some observers scratching their heads, but higher output from rival producers, such as Scotland, and earlier freezing in readiness for the Christmas market could also be having an impact.
According to the website and journal dn.no, the latest figures from Statistics Norway show the average price of fresh salmon had fallen back to NOK 53 per kg, a drop of four per cent on two weeks ago and down 15 per cent on the same period a year ago.
However, this figure includes fixed price contracts agreed earlier in the year and the real price may be around NOK 45 per kg, uncomfortably close to the cost of production.
Dn.no says the real dilemma facing fish farmers and investors alike is whether this reversal is just a short term setback or one that may last well into the New Year.
Financial experts say the average price in December, when demand for salmon is at its peak, could be as high as NOK 70 per kg or still hovering around the mid NOK 45 mark. No one really knows.
One analyst, Kolbjørn Giskeødegård from Nordea Markets, told the journal he believes there are a number of reasons behind the fall in prices, including the impact of the algae outbreak in Norway last May, improved salmon growth and the fact that companies had invested heavily in reducing production time, with the industry now starting to see the results of this.
And he pointed out that the international market was seeing higher output from Scotland, the Faroe islands and from Iceland. This has led to more fish to becoming available on the global stage.