Exports crashing, Norway vows to maintain seafood supply

Seafood producers in Norway, spanning both the wild-capture fisheries and aquaculture sectors, will strive to maintain supplies to domestic and overseas markets, with borders and air freight routes remaining open for the transport of goods, the country’s government has said.

Norway has taken drastic steps to halt the spread of COVID-19, with schools, cinemas, restaurants and bars told to close and citizens encouraged to stay at home as much as possible. However, the Norwegian Ministry of Trade, Industry, and Fisheries issued a formal letter on 14 March identifying the value chain supporting food production and delivery as critical functions to society.

Being classified as a critical societal function means the Norwegian seafood industry will aim to keep operations running. As such, the seafood sector will continue to have access to childcare, while the transport industry is exempt from some of the strictest quarantine regulations for personnel to ensure the flow of goods across borders.

“The Norwegian seafood industry plays a very important role in the food supply chain, not only in Norway, but across the world. In these difficult times it is important to keep society going, and ensure that everyone has access to healthy and nutritious foods,” the newly-appointed Minister of Fisheries and Seafood Odd Emil Ingebrigtsen said.

As Norway exports 95 percent of its seafood, the Tromsø-headquartered Norwegian Seafood Council (NSC) has also issued trade assurances, confirming that Norwegian industry and government are working together to ensure deliveries and logistics can continue to operate as smoothly as possible. 

“Perhaps now more than ever it is important to keep up the production and supply of healthy and nutritious foods, and we are very happy that the Norwegian government recognizes the vital part the Norwegian seafood industry plays in this. We are committed to playing our part and finding solutions to keep up a good supply of Norwegian seafood throughout these troubling times,” NSC CEO Renate Larsen said. “These are unprecedented times. Nobody really knows what we are facing around the corner. What we do know is that people need to eat. And we have some of the best and healthiest foods around. Ensuring a stable supply really is a critical function of society, and as a seafood nation we take our responsibility very seriously.”

The United States is one of Norway’s most-important seafood markets, and NSC U.S. Director Egil Ove Sundheim said the industry “remains committed” to providing solutions that ensures products continue to be available.

“For Americans, these are unprecedented times. There is some uncertainty about what is to come within the upcoming months,” Sundheim said. “However, what we do know is that consumers will most likely continue to place a high value on their food. Luckily for both Norway and the United States, Norway is able to provide both countries with some of the most nutritious, healthy food around. As a seafood-focused nation, ensuring that we are able to provide a stable supply is critical to Norwegian society and we do not take this responsibility lightly.”

In 2019, Norway exported 2.7 million MT of seafood worth a record NOK 107.3 billion (USD 9.9 billion, EUR 9.2 billion). Of this total, salmon accounted for 1.1 million MT and NOK 72.5 billion (USD 6.7 billion, EUR 6.2 billion), and cod contributed 181,000 MT and NOK 10.1 billion (USD 931.6 million, EUR 868.2 million).

The spread of the coronavirus is causing considerable shifts in consumer behavior and disrupting transport and logistics in many of the markets sourcing Norwegian seafood products, according to the NSC’s latest update. While the hotel, restaurant, and catering (HoReCa) sector has been particularly affected, retail and delivery services have been growing as a result of many countries’ self-isolation and quarantining measures. Additionally, the weaker Norwegian krone has been counteracting some of the effects of lower market demand at present, it said.

Despite rising retail sales, the council expects lower demand for fish and seafood as a result of lower turnover, NSC analyst Paul Aandahl explained.

“The lower demand will first hit species such as king crab, quality-labeled skrei and prawns usually sold in restaurants. We have also been given indications that the increased insecurity in Europe means retail buyers look to limit the range of products in-store. This might also affect Norwegian seafood exports,” Aandahl said. “Our country directors in the European markets are reporting several fresh fish counters closing down and prepacked fresh seafood often being out of stock.”

Norway exported more than 18,000 metric tons (MT) of fresh whole salmon in week 11, an increase of 24 percent compared to the same time last year, with the strongest growth seen in the E.U.’s traditional processing markets of Poland (up 42 percent), Denmark (up 93 percent), and Lithuania (up 141 percent). 

“The effects we have seen on exports of fresh salmon in some markets as a result of the virus outbreak so far will continue to spread other markets as the pandemic evolves. The global salmon market will have to manage increased transport costs, changed consumption patterns and unpredictable prices,” Aandahl said.

Meanwhile, the demand for Norwegian whitefish has declined. Traditionally, the main cod (skrei) season runs from January to April, when between 30 and 40 percent of the total fresh whole cod volumes are exported.

However, with increased restrictions in several European markets, another of NSC’s analysts, Ingrid Kristine Pettersen, said that large parts of the category has fallen and fish will now be used in the dried and salted channels.

“We are well into the season, so the consequences are not as dramatic as they could have been if the corona situation had happened earlier in the winter,” she said. “Reduced demand will lead to lower prices in the markets. We can already see this in the stats for fresh cod exports in week 11. Frozen products are more suitable for storing. In several markets we now see a shift from fresh to frozen fish, something we also saw in China earlier in the year. Products like clipfish and stockfish also have the advantage that they can be stored for longer periods of time without cooling. This is seen as a positive in a marketplace where people shop more infrequently.” 

Norway’s frozen, whole whitefish is primarily sold to processing industry in Eastern Europe and China, and in week 11 an increase in these exports was seen. 

The NSC also highlighted that in week 11, whole fresh salmon exports to the U.S. market fell 4 percent year-on-year to 379 MT, while fresh salmon filet exports increased by 4 percent to 426 MT. At the same time, 178 MT of fresh whole trout was sold to the U.S., up 122 percent compared to week 11 2019.

China imported 217 MT of fresh whole Norwegian salmon in week 11, up from 149 MT in week 10. However, shipments of Norwegian salmon to China dropped by 83 percent year-on-year in February.  But there are now “gradual steps” towards more activity in China, according to the NSC China Director Victoria Braathen.

“Reports from industry stakeholders suggest that operations are resuming and domestic demand for especially frozen seafood increasing,” Braathen told SeafoodSource. “The general feedback is that sale of seafood products, during this time, to some degree has shifted to retail and online.”

Any return to normalcy in China’s restaurant sector will be gradual, while the chance for online sales to pick up the slack in fresh seafood sales remains limited, given 90 percent of Norwegian salmon is consumed out-of-home in China, according to Braathen.

“The general picture is that activity from day-to-day is increasing, and more restaurants are reopening. Still, measurements in place are affecting Chinese daily life, as well as trade and distribution channels,” she said. “The current situation has also led to more restaurants looking into different modes of home delivery.”

The NSC is projecting a year-on-year decline in the Norwegian seafood exports to China of 21 percent in value and 22 percent in volume in 2020 to date.

“Looking into the figures, this is mostly due to decreasing export of fresh Norwegian salmon, as well as a slower start to the year for the Norwegian whitefish sector,” Braathen said. “February alone saw a positive development in export of frozen cod, and recent weeks’ trade figures indicate that demand of fresh salmon is gradually returning.”

China was the largest growth market for Norwegian seafood in 2019 and Braathen is optimistic about the potential for Norway to continue to count China as one of most promising regions for future sales.

“We certainly remain confident that the positive development for Norwegian seafood will continue once the market resumes,” Braathen said.

Photo courtesy of Norwegian Seafood Council


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