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$4.3 billion massacre in salmon aquaculture stocks

Nobody on the planet can confidently say they are having a good year. But there are some clear losers on the stock exchange, and salmon appears to be one of the biggest.

Shares of the world’s largest salmon farming companies have almost all tanked, with a whopping $4.3 billion (€3.6 billion) wiped off the value of the 10 biggest publicly listed firms.

Having all taken the same V-shaped fall and rise in the Great Pandemic Sell-Off in March, nine out of 10 of the producers are yet to recover from the losses, with poor salmon spot prices and high costs leaving a lasting stain on investor confidence.

Only one major salmon farmer, Salmar, has seen its share price climb since the beginning of the year, by a modest 3.41 percent, to deliver a market capitalization of $6 billion (€5 billion).

Leroy Seafood Group – which it should be noted has a major footprint in wild fisheries, making it the most diversified of the groups — has the dubious distinction of losing the least from its share value: 3.24 percent or a mere $130 million (€109.2 million).

Multiexport and Blumar meanwhile hold the dual crown of biggest losers, with market capitalizations falling almost 30 percent each since the beginning of the year.

Mowi and Grieg were also substantial losers, with Mowi’s share price plummeting almost 20 percent, wiping $2.6 billion (€2.2 billion) off the market capitalization of the world’s biggest producer. Grieg’s fell an almost as devastating 23 percent, marking a $414 million (€347.9 million) loss of value, a descent likely to be accelerated by the announcement today of disappointing second quarter results.

Norway’s salmon producers are currently being forced to sell their fish painfully close to production costs in the spot market, although prices appeared to stablize last week after a long period of decline, according to several industry sources.

Analysts and producers are confident of a sunnier future ahead, with increasing demand pushing prices to new highs in 2021.

But while longer-view investors might see a light at the end of the tunnel, for those unwilling to dig in for the long haul, this week’s earnings may well prompt some to offload a little more of their sliding stock, with few expecting stellar news given the challenges facing the global economy.