Chile algal bloom salmon mortalities keep rising; uncertainty remains

[Chile, USA] Uncertain. That is one of the first words Chilean salmon producers use when asked by Undercurrent News about the ongoing algal bloom and its impact on salmonid supply.

So far, Chilean salmon producers have reported a loss of Atlantic salmon equivalent to 89,900 metric tons, if they had been harvested at the suitable weight for sale, the general manager of SalmonChile, Felipe Manterola, told Undercurrent.

That is 5.7% up from the previous update released on March 5 by SalmonChile, the industry body for the Chilean salmon sector.

Current Atlantic salmon mortalities account for 15% of Chile’s salmon production, Manterola said.

The loss for coho, on the other hand, represents the equivalent of 6,200t lost if the fish had been harvested for sale, which would have been mostly for the second half of 2016 and first quarter of 2017, SalmonChile said.

“Chile’s Atlantic salmon supply won’t be interrupted due to the algal bloom, but it will be tight,” said Manterola.

He ruled out an impact similar to that caused by the infectious salmon anemia outbreak in Chile, which decimated production from 2007 to 2009.

“Today this scenario doesn’t exist […] Mortalities are not comparable,” Manterola said.

Based on the latest mortalities update, Chile’s Atlantic salmon output would reach about 500,000t in 2016, down from 600,000t projected for this year.

This means supply will not be disrupted, but a shortage of fresh salmon to the US will be noticed by May, several Chilean salmon producers said at this year’s Boston trade show, from which Undercurrent is reporting live (see our blog here).

Thus, contract prices for Atlantic salmon are expected to increase by then. Spot prices, however, have already shown an increase.

Spot prices are now ranging between $4.40/lb-$5/lb, with two sources saying prices might go as high as $5.50/lb, from $4.04/lb seen in week 8.

Several Chilean producers said a sudden increase in prices is not necessarily beneficial for the industry.

“An abrupt change in prices is not good, as markets were already digesting the currency differences, so we were seeing prices going up from the beginning of the year. Now, we need to see how the market absorbs this price increase,” an executive with a major Chilean salmon producer said.

Others see some positive aspects to the mortalities linked to the algal bloom, also known as red tide.

“Overall, I would say the situation is negative. Even if salmon farmers are insured, refunds won’t be received straightaway. But, there are some positive aspects. There will be less workforce, and that means more cash flow available,” another executive from a salmon farmer said.

“Higher salmon prices can also help to the long-awaited recovery of the industry,” he said.

Red tide: starting or finishing?

The impact of red tide in the mid to long-term is still difficult to work out, as the algal bloom is still ongoing and with no end in sight, on the back of Chile’s summer weather conditions.

“So far, mortalities have slow down. But we don’t know if the algal bloom is starting or ending… we need rains and strong winds urgently,” a Chilean salmon producer said.

El Nino has increased seawater temperatures, which has favored the flowering of certain species of algae harmful to fish, but with Chile’s autumn coming up — it will start on March 21 — temperatures are expected to decrease and the algal bloom to end.

So far, however, Chile’s weather forecast does not show signs of heavy rain or strong wind, which would help to eradicate the algal bloom.

“We expect a critical situation throughout March, and maybe mid-April,” another salmon source said.

 

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