February 24, 2017 / 1:16 PM / 6 months ago

Norway salmon price seen falling to five-month low next week

OSLO, Feb 24 (Reuters) - The average price of Norwegian farmed salmon is dropping 2-3 crowns to 58-59 crowns per kilo for deliveries in Oslo next week, industry sources told Reuters on Friday.

It will be the first time since early October that prices fall below 60 crowns per kilo.

"We are still at a high level, 58-59 crowns on average. What we see is that the market is saying 'no' because prices to end-consumers have risen. We have to work hard to get back up," a producer who declined be named told Reuters.

An exporter confirmed the drop, adding that demand had weakened after months of high prices.

"In Northern Norway salmon is traded at 57-57.5 crowns, for deliveries in Oslo you have to add 1 crown," the exporter said.

"It's not because volumes are rising but the market is a bit weak. To find the right price level is difficult," he added.

Since early January, prices have fallen from around 80 crowns per kilo.

Still, earnings margins remain high by historical standards, despite a sharp rise in production costs in Norway in recent years to around 30-31 crowns per kilo.

Norway is the world's top salmon exporter, with leading producers including Marine Harvest, Salmar, Leroy Seafood, Grieg Seafood and Norway Royal Salmon.

Supply constraints are expected to support prices in the first half of 2017 before an expected increase in volumes later in the year, Norwegian salmon farmers such as Marine Harvest , Leroey Seafood and Salmar recently said. (Reporting by Ole Petter Skonnord, editing by Terje Solsvik)

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