Salmon oil: pricing and EPA/DHA content

How does the pricing process for salmon oil work?

A lot has been said about this issue in recent months. In this newsletter we would like to provide some insight as to how pricing works. Firstly, the purchase cost of salmon oil depends on the fish quota and the market situation; it also fluctuates with world market prices. Secondly, the price depends on the EPA+DHA content of the oil. Fact is that these factors are approached in varying and sometimes incorrect ways. Below, the E.F.S. sales team has tried to give you a crystal clear overview of our price approach. We will use the price of soybean oil as our point of departure.

Suppose the price of soybean oil is € X per tonne and the price of a (fish) oil with a 16% EPA+DHA content is € Y per tonne. The difference in price between a standard oil and the EPA+DHA (fish) oil would then be € Z (€ Y – € X). In order to arrive at the value of 1% EPA+DHA, this amount is divided by the percentage of EPA+DHA. In this case the price per 1% of EPA+DHA would be € Z/16. This price (€Z/16) can be multiplied by the EPA+DHA content of various fish oils or omega-3 sources. Based on the price of the product with a 16% EPA+DHA content, salmon oil that contains 11% EPA+DHA may cost €X+11*Z/16. A lower price represents a price advantage for the customer. The price can be calculated for any situation if the current prices are put into the above formulas.

Market prices

Apart from this particular approach, E.F.S. newsletters always report on the market price situation for salmon oil. In the past quarter prices have gone up by a few dozens of euros per tonne. This price increase can be explained by the pre-announced disappointing quota in South America.