Marine Harvest: pole position

El Niño, haven’t we all had enough? The salmon farming industry certainly has. Warm waters cause blooms of algae that can choke the poor fish. Chile, a key source of farmed salmon has suffered badly recently. Worse, the anchovies used in fish feed disappear to deeper, colder seas. That means higher costs for the salmon industry.

The operating profits of Oslo-listed Marine Harvest, the largest producer of Atlantic salmon, last year fell to their lowest since 2012. A weaker Norwegian krone has hurt since feed — half of costs — is priced in dollars.

Tell that to the traders. Shares in Marine Harvest have risen 28 per cent over 12 months. Rivals Leroy Seafood and SalMar have done even better. Norway’s OBX index lost 8 per cent during that time.

Clearly the market sees better times on the horizon. Chile has more than just algae problems; Salmon Rickettsial Syndrome has done great damage to its fish stocks, not to mention exports. US buyers such as Costco, used to get all of their salmon from Chile; that has dropped to less than half.

Norway’s industry, long fearful of disease problems, has very tight regulations restricting supply growth to around 3 per cent annually. Meanwhile demand should climb 7 per cent this year. Prices have jumped accordingly; Atlantic salmon goes for around NKr52 per kg this year, 24 per cent above last year’s average price, according to specialists Fish Pool.

This positive outlook has not stopped Marine Harvest’s key shareholder, a holding company controlled by shipping magnate John Fredriksen, selling a third of his holding on Wednesday. The stake, worth half a billion dollars, represents nearly a month’s trading volume and the news sent the shares down 6 per cent. More could come. Mr Fredriksen’s oil-related investments, such as Ship Finance, SeaDrill and Frontline, have declined sharply in value. The skies have brightened for Marine Harvest. Just watch out for more waves of selling.

Email the Lex team at lex@ft.com