Salmon farmers' shares rise as Chilean algal bloom boosts prices

Reuters News
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Posted: Mar 14, 2016 3:17 PM

By Felipe Iturrieta

SANTIAGO (Reuters) - An algal bloom in Chile that has killed up to 20 percent of the nation's farmed salmon has sent shares of producers higher as the reduced supply has lifted selling prices.

Over the last month and a half, salmon farmers in Chile, the second-largest global producer after Norway, have been hit by production losses of around 100,000 tonnes, worth some $800 million, according to industry experts.

The drop in supply from Chile caused global prices last week to rise 25 percent to $5 per pound in Miami, a reference market for the industry.

Between Thursday and Friday, Oslo-listed shares in Norway-based Marine Harvest, the world's largest salmon producer, climbed 8 percent. But shares in smaller Santiago-listed firms Australis Seafoods rose 37 percent, while Camanchaca and Multiexport Foods jumped around 30 percent.

Blumar and Invermar registered similar gains, while shares in AquaChile rose a more modest 7.5 percent.

On Monday, most stocks continued to rise, with Marine Harvest shares up nearly 4 percent and others up as much as 10 percent.

"It seems a little paradoxical, but this is tied directly to the strong rise in the salmon price at the international level," said Jorge Opaso, an analyst at Bice Inversiones.

Hopes that the outbreak could speed up a long-waited consolidation in the fragmented industry also were spurring buying, analysts said.

(Reporting by Felipe Iturrieta; Additional reporting and writing by Gram Slattery; Editing by Dan Grebler)