First-quarter earnings increase for Norwegian seafood exports, Chinese market starts to normalize

Published on
April 8, 2020

Norway’s seafood exporters sold 213,000 metric tons (MT) of fisheries and aquaculture products worth NOK 9.6 billion (USD 914.8 million, EUR 847.7 million) to overseas markets last month, contributing to total first-quarter sales of 664,000 MT and NOK 28.6 billion (USD 2.7 billion, EUR 2.5 billion). In value terms, Norway’s Q1 seafood exports increased by 11 percent or NOK 2.9 billion (USD 276.2 million, EUR 255.8 million) year-on-year.

Despite the upturn, the Norwegian Seafood Council (NSC) confirmed that in the second half of March, there was “major turbulence” in both the European and U.S. seafood markets due to the COVID-19 pandemic.

“Strict restrictions on exports to the United States and a reduction in air cargo capacity hit fresh seafood particularly hard last month,” NSC CEO Renate Larsen said. “At the same time, we see that the global restaurant sector is almost completely closed and that the demand for seafood within this sales channel has been sharply reduced. Despite the challenging situation in some of our most important markets, export value has continued to increase as a result of a weakening Norwegian krone.”

While there has been a fall in the overall demand for Norwegian seafood, NSC highlighted a few bright points. These include “gradual normalization trends” in some Asian countries such as China and South Korea, and an increase in online sales of seafood and food delivery services to households. The NSC said last month it will seek to maintain supply to its global markets, despite a downturn in demand and prices.

Larsen said the COVID-19 crisis has affected Norwegian seafood products very differently, and products that are exported to many markets have had more resilience than those that depend on a few core markets.

“The increased sales in online channels that we see in several markets are from low levels, but this also means that many people are trying out these types of services for the first time,” she said. “Today's situation can lead to lasting behavioral changes. Increased purchases of freshly packed seafood may be something that persists even after the corona[virus] crisis.”

Last month’s salmon exports amounted to 85,800 MT, which was 4 percent more than in March 2019. This trade achieved a total sales value of NOK 6.1 billion (USD 580.9 million, EUR 537.7 million), – a rise of 2 percent compared with a year previously – with Poland, the United States, and France providing the main markets.

The average price for fresh whole salmon last month was NOK 64.98 (USD 6.17, EUR 5.73) per kilogram, compared with NOK 68.72 (USD 6.53, EUR 6.06) in March last year. 

Increased demand from the Chinese market led to 13,517 MT of fresh salmon being exported from Norway.

“The first-quarter figures confirm the trend of a gradual return in demand for fresh products in China, while we also see further good development for frozen products,” NSC’s fisheries envoy to China, Victoria Braathen, said. “Overall, Norwegian seafood exports to China declined by 12 percent in value and volume this year. This export trend was in line with expected market development, as China is gradually moving towards a normalization.”

Meanwhile, the air traffic restrictions in place in the U.S. over the last month have dramatically impacted the market’s imports of whole fresh salmon, according to NSC U.S. Fisheries Envoy Egil Ove Sundheim.

“This is happening at a very unfortunate time, since we are now in Lent which is traditionally a very good period for seafood turnover in the restaurant sector,” Sundheim said.

Also in the salmonid sector, Norway exported 5,100 MT of trout worth NOK 316 million (USD 30 million, EUR 27.8 million) last month, up 46 percent and 20 percent, respectively, compared with March 2019. The U.S., Ukraine, and Finland provided the three largest markets for Norwegian trout exporters.

For the first quarter, 15,600 MT of trout has been sold overseas – an increase of 43 percent – for NOK 969 million (USD 92 million, EUR 85.4 million), a rise of 26 percent.

With regard to its whitefish sector, last month Norway’s exports of fresh cod and skrei fell 30 percent to 8,300 MT, earning NOK 365 million (USD 34.6 million, EUR 32.2 million), a drop of 25 percent.

In the opening three months, 23,200 MT of fresh cod and skrei worth NOK 1.1 billion (USD 104.4 million, EUR 96.9 million) was exported, representing a 7 percent decrease in volume, but a value rise of 2 percent year-on-year. 

NSC analyst Ingrid Kristine Pettersen explained that the loss of the restaurant segment hit exports of fresh whitefish particularly hard.

“March is normally the month of the year with the highest exports of fresh, whole cod, but this year export volumes fell below the levels we had in February. Some of this reduction may also be due to lower catches due to bad weather,” she said.

Also last month, 9,800 MT of frozen cod with a value of NOK 452 million (USD 42.9 million, EUR 39.8 million) was sold by Norway to overseas markets. This represented increases in volume and value of 18 percent and 27 percent respectively. In Q1, 23,300 MT of frozen cod – with a value of NOK 1.1 billion, similar to the fresh exports – was exported, down 7 percent in volume and up 2 percent in value year-on-year. 

The country’s pelagic trade exported 32,300 MT of herring valued at NOK 379 million (USD 36 million, EUR 33.4 million) last month, with the volume up 1 percent over last year and the value increasing 39 percent. At the same time, 20,800 MT of mackerel worth NOK 361 million (USD 34.3 million, EUR 31.8 million) was shipped, up 59 percent and 60 percent, respectively.

In total, 105,500 MT of herring worth NOK 1.1 billion and 81,400 MT of mackerel valued at NOK 1.4 billion (USD 132.9 million, EUR 123.4 million) were sold to overseas markets in Q1 2020.

Norway also exported 422 MT of king crab worth NOK 5 million (USD 474,854, EUR 440,647) and 3,000 MT of shrimp valued at NOK 246 million (USD 23.4 million, EUR 21.7 million) in the quarter.

In 2019, the Scandinavian country exported 2.7 million MT of seafood worth a record NOK 107.3 billion (USD 10.2 billion, EUR 9.5 billion). Salmon accounted for 1.1 million MT and NOK 72.5 billion (USD 6.9 billion, EUR 6.4 billion) of this total, while cod contributed 181,000 MT and NOK 10.1 billion (USD 960.7 million, EUR 891.3 million). 

Photo courtesy of Andrey Armyagov/Shutterstock 

Contributing Editor reporting from London, UK

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