Complicated '08 for Chile salmon sector

SANTIAGO (Reuters) - Chile's salmon industry said on Tuesday it faced a "complicated" 2008 because of a U.S. economic slowdown, a sharp appreciation of the local peso against the dollar and higher energy costs.

Cesar Barros, president of trade organization SalmonChile, told the Reuters Latin America Investment Summit in Chile the sector, which is also struggling with an outbreak of Infectious Salmon Anemia (ISA), an extremely contagious virus that affects Atlantic salmon, has been feeling a slowdown for some time.

"This is a complicated year," he said. "It is a year in which the exchange rate has had an effect, as has the cost of production. It has also been a year in which the global economy and United States economy are cooling down, so for the export industry that is bad news."

He added that the impact of the ISA virus may not have yet touched bottom for Chile, which is vying with first-place Norway to be the world's leading salmon exporter.

"It is a virus about which very little is known, about how it is transmitted ... There is a hypothesis, but there is sadly not much science," Barros added.

"It has the potential to be very negative (for the industry) and we haven't yet seen that full potential."

The virus has not been shown to be harmful to humans.

After four years of double-digit growth, Chile's salmon and trout exports grew by only 2 percent in 2007 to $2.24 billion in 2007 on volume of 397,039 tonnes as production volumes increased 3 percent.

In 2006, Chile accounted for about 38 percent of the world's cultivated salmon and trout production, second only to Norway, which accounted for 40 percent of global output.  Continued...