After last week’s Russian import ban, Chile's salmon producers have already received important order requests for Atlantic salmon, which is upping prices following several weeks of falls, sources told Undercurrent News.

Since Russia banned seafood imports from countries supporting sanctions against it over its conduct in Ukraine and alleged links to the shooting down of the Malaysia Airlines plane, Norwegian salmon spot prices have started to go down.

Last week, salmon sellers faced a chaotic situation after the ban announcement, with trucks arriving at the Russian border and not getting in.

On the other side, the big winners in the middle of the chaos are Chilean salmon producers, which are already having huge demand from Russia.

Chile-based Salmones Aysen is an illustrative case. Russian importers have been calling the salmon producer throughout this week, looking to buy important volumes for the period from August to October, the company's export manager Felipe Jankelevich, told Undercurrent.

"We have received much more order requests than expected, requests were very eager," Jankelevich said.

"We are not used to have this three-month contract approach with Russian clients because they usually do monthly orders," he said.

Salmones Aysen's requests from Russia in recent days are 50% up, year-on-year.

However, the Chilean producer, which focuses on coho with 10,000 metric tons in this harvesting year, wants to maintain 75% of its production exported to Japan in order to meet its commitments and keep long term relationships.

Salmones Aysen’s exports manager also said they need to be expectant on the continuity of the ban.

“We must maintain alert because, as soon as the sanction ends, the continuation of the contracts may be at risk,” Jankelevich said.

If the ban continues for long time, Chile's Atlantic salmon supply to Russia is expected to increase considerably, as producers can replace Norwegian exports.

In the first six months of the year, Russia imported 9,830t of Atlantic salmon from Chile, while Norwegian producers exported 39,721t over the same period.

Felipe Manterola, general manager of SalmonChile told El Mercurio Chile’s industry is ready to meet an increased demand, particularly from Russia.

According to Manterola, salmon exports in Chile will exceed the $169 million reached in 2013, on back of the new Russian opportunity.

In regard to prices, industry players also see a clear upward trend.

"Prices of Chilean Atlantic salmon will go up, although it's too soon to know how much," Jankelevich said.

According to an importer who preferred to remain unnamed, Chile’s Atlantic salmon asking price in 48 hours after the ban announcement went up from $5.80 per kilo to $7/kg for 5kg.

“We have seen Chilean packers canceling orders to Brazil in order to fill Russian demand, they are starting to inform all other markets that prices must go up to match the pricing and must face this new reality,” the source said.

Jankelevich, however, said his company is not especially interested in rocketing prices since abnormal high prices will not be beneficial for salmon producers.

"Long term I don't think rocketing prices will benefit Chile's producers, as they could lose established long term relationships with clients," Jankelevich said.

He said prices of Atlantic salmon may not be constantly at peak levels in the long term, as the global market will eventually stabilize prices.

“Norway will sell more volumes at lower prices to other markets where Chile also supplies, so this will settle prices,” Jankelevich said.

The importer echoed Jankelevich’s view in regard to high prices' impact on markets, saying that Chilean packers could lose a big market in the US, Asia and Europe.

“They [Chile’s producers] might say they don't care but they must not forget that Russian market is always a Pandora Box,” the source said.

What it is clear is that Chilean producers can be more optimistic now and reverse the downward trend in Atlantic salmon prices during the last months, as salmon has gone down from peak levels at $5.45/lb in mid-May to $4.47/lb in early August, according to SalmonEx.

Russia, attractive market for coho

Atlantic salmon developments in the market will be different than coho, as the first moves much higher volumes and has more demanding markets, Jankelevich explained.

In the case of coho, Japan is the main market, but Russia is also becoming important.

"We are very expectant about the particular situation of coho as Russia has shown much higher demand than expected and is absorbing production at more competitive prices than the east," Jankelevich said.

Coho prices in the Japanese market have had a downward trend, although they remain high at JPY 750/kg.

In the 2014-2015 season, Chile's coho production is projected to go up 9.6% but this will probably not see prices decrease, since Japan's stock in October is expected to be scarce at around 8,000t, down 60% from the last season, Jankelevich said.

Also, Chile will keep 25% of exports out of the Japanese market and Russian sockeye salmon expected from Japan to cover lack of coho might not be exported.

"Japan expects to receive about 27,000t of sockeye from Russia that could be used to replace coho, however this product may also suffer restrictions or can be consumed domestically," Jankelevich said.