Looking for a specific product?

Make a search for products & suppliers, articles & news.

Chile loses out with Costco to switch 2/3 of salmon contract to Norway

CostcoUS retail giant Costco Wholesale will switch around two-thirds of its fresh farmed salmon fillet supply to Norway, the US retail giant told Chilean packers during the Boston seafood show.

The move from Costco, which buys around 600,000 pounds of farmed salmon a week, will impact several Chilean processors, the hardest hit being Empresas AquaChile, Blumar Seafoods, Pesquera Camanchaca and Multiexport, sources said. The new contract will start in June.

This was the “cherry on the cake” of a gloomy show for the Chileans, one source said. During the show, it also emerged prices to the US are down, after rising for several weeks.

“In 2014, many pundits where forecasting a very good 2015 for Chile,” one source said.

For various reasons, the latest being the move from Costco, this does not seem to be panning out as forecast.

“All countries have huge, high-cost inventory and there are currency issues with the weak yen, ruble and real, one source said.

In addition, the US market not performing before lent and an expected huge run in Alaska is making the Chileans think that 2015 will be a much more complicated year than expected, sources told Undercurrent.

Although the reasons for the move from Costco are not clear, price and a general shift away from buying products that have been reared with antibiotics were cited by sources.

“They [Cosco] say they got a good deal from Norway, and also this is product with no antibiotics, although this possible reason is not clear 100%. I am sure there is more issues behind this decision,” one Chilean source said.

Several sources also questioned how the Norwegians would fare supplying Costco in big volumes. “This is a huge loss for Chilean packers, but is not clear how Norwegian packers can perform with this unique spec that only Chilean can perform,” one said.

Costso uses a trim F fillet with no fat on it and is notoriously stringent as a customer, sources said.

Norwegians target US

With the Russian market closed to Norwegian salmon and prices down year-on-year, the US market is taking more salmon from Norway.

In addition, the NOK/USD exchange rate has shifted considerably in the last year, because of the fall in the oil price.

This time last year, the rate was NOK 0.16/$1, but this has switched to NOK 0.12/$1 now.

At the same time, prices from Norway are also down. In week ten of 2014, the price level from Norway was around NOK 43 per kilogram, whereas it is NOK 39/kg at the moment.

Bigger volumes of salmon are going from Norway to the US as a result. For January to February this year, the US has imported 7,259t of salmon from Norway, worth NOK 353.22 million, up 32% in volume and value.

Buck against antibiotics 

At the start of March, Reuters reported Costco is working toward eliminating the sale of chicken and meat from other animals raised with antibiotics that are vital to fighting human infections.

Sources at Boston cited this move as part of the picture of the move away from Chile.

Speaking to Undercurrent, Jon Hindar, CEO of Cermaq, addressed the need for a shift away from antibiotics in Chile, which are being used to treat salmon rickettsial syndrome (SRS) and sea lice.

“In Norway and Canada, this [fish health] is currently going quite well,” said Hindar. “In Chile, we have a mixed bag. We have, as always, very good development on coho and a weak development for trout, as well as Atlantics in certain neighborhoods.”

Antibiotics can contain the impact of SRS, but this is “definitely not about throwing antibiotics at the fish”, he said. “Significant use of antibiotics is never a sustainable solution, so you need to find other ways to deal with such problems.”

Related news

Latest news

Introducing SAL R1a Easy Tank

Innovation up to speed – Introducing SAL R1a Easy Tank.

Speed logs for 100 years

This is the story of the Consilium speed logs, helping you navigate for more than 100 years.

IAEA Mission says Research Reactor Operator in Norway is Committed to Safety

A team of eight reactor experts from the International Atomic Energy Agency (IAEA) has for one week undergone the safety of the JEEP II research reactor at Kjeller. The expert group concludes that IFE strongly emphasizes s...

New Research Center for Environment-friendly Energy

The new FME center is dedicated to development of materials, components and technology for use of batteries and hydrogen in zero emission transport systems. It will be a special focus on the maritime sector.

The Netherlands re-join the Halden Reactor Project

The Netherlands signed the Halden Agreement on December 1st and will formally become the 20th member country in the Halden Reactor Project (HRP) after the formal acceptance from the Halden Board during their Paris meeting ...

First phase of DNV GL led offshore cable and pipeline operations equipment joint industry project completed

The data analysed during phase 1 has identified and recorded various processes...

The end of the paper chase: DNV GL to roll out electronic certificates across entire fleet

Certificates are published on DNV GL’s customer portal immediately after an onboard survey is completed,

New Integrated Solution Set to Redefine DP Reference Systems

DPS i2 and DPS i4 utilise KONGSBERG's unique motion gyro compass (MGCTM) and motion reference unit (MRUTM) technology.

Servogear service hub in Asia

September 2017, Servogear announce the strengthening of our presence in Asia with the establishment of a service hub in Singapore.