Weakened krone spurs Norwegian seafood exports on to record-breaking six months

Published on
July 7, 2020

Norway’s seafood exporters achieved a record NOK 52.9 billion (USD 5.6 billion, EUR 5 billion) in overseas sales in the first half of this year, an increase of NOK 1.8 billion (USD 191.3 million, EUR 169.4 million) or 3.5 percent compared with the corresponding period of 2019.

“Despite a very challenging spring with the corona[virus] crisis, we have still seen growth in seafood exports in the first half of the year. Salmon, trout, herring, and mackerel have increased the most compared to the first half of 2019. A weak Norwegian krone is the main factor driving growth,” Norwegian Seafood Council CEO Renate Larsen said. “Increased quotas for mackerel, increased production of trout, and a turn towards more consumption of salmon fillet have also helped to raise export value.”

While the overall value of Norway’s seafood exports grew, Larsen pointed out that several species and product types had experienced a decline in value, such as fresh cod, prawns, and king crab. Those decreases are largely a consequence of the COVID-19-based shutdown of the hotel and restaurant sectors, as well as reduced flight availability caused by the severe travel restrictions, in addition to bad weather and reduced catches in the main cod season.

“We also observe that salted fish, scallops, and codfish were hit hard in the first half of the year. This is caused by, among other factors, major challenges associated with the coronavirus in traditionally large markets such as Brazil and Italy,” Larsen said. “When we convert to other currencies, we also see a decline in the export price for some products, which indicates a fall in demand. Reduced purchasing power, the risk of the coronavirus flaring up again and uncertainty in the value chain are factors that make future prospects uncertain.”

Norway Minister of Fisheries and Seafood Odd Emil Ingebrigtsen welcomed the results.

“A new record for seafood exports in the first half of the year is both gratifying and impressive,” Ingebrigtsen said. “The seafood industry contributes to jobs along our entire coast. Even though the krone exchange rate plays in, the recent figures show that the industry has so far managed well through the corona[virus] crisis.”

Increased salmon earnings

Norway’s salmon exports for the first six months totaled 501,000 MT, worth around NOK 35 billion (USD 3.7 billion, EUR 3.3 billion), with the volume on par with H1 2019, and the value increasing 2 percent. Poland, France, and Denmark were the main markets for this product during this period, while the average price for fresh whole salmon was NOK 64.62 (USD 6.87, EUR 6.08) per kilogram, up from NOK 63.71 (USD 6.77, EUR 5.99) a year previously. 

NSC Analyst Paul Aandahl explained that salmon exports were hit hard by the coronavirus crisis, with reduced turnover in the restaurant sector, but that there has been an improvement in the situation since April.

“Important markets such as Italy, the United Kingdom, and France have moved towards normalization of demand following a sharp fall in consumption in March and April,” Aandahl said.

Overall, the E.U. increased its value share of total exports from 70 to 71 percent in the first-half, while exports of Norwegian salmon to Asia during the same period saw a slight reduction in value.

“Exports have varied widely from month to month and between markets. The largest variety has been China, with an almost stop in February. Here we have seen a gradual growth up to and including May, before it again stopped in June after a flare-up of the corona virus and the introduction of strict restrictions that affected food imports into China,” Aandahl said.

Over the same six-month period, Norway exported 31,600 MT of trout, achieving revenues of NOK 1.8 billion, with the volume and value up 29 percent and 10 percent respectively. The average price for fresh whole trout was NOK 54.37 (USD 5.78, EUR 5.12), with the United States, Ukraine, and Japan providing the largest markets for the product.

“Trout has had a weaker price trend than salmon in the first-half of the year. One of the reasons for this is that the trout is more dependent on overseas markets than the salmon and is thus more exposed to the increased air freight costs. Strong volume growth combined with increased logistics costs have pushed the price of trout below the salmon price in the first half,” Aandahl said.

Downturn for fresh cod

In the whitefish sector, Norway exported 36,100 MT of fresh cod worth NOK 1.6 billion (USD 170.1 million, EUR 150.6 million) in the first half of this year, representing a 9 percent decrease in volume, and a 4 percent drop in value. 

“The corona[virus] eruption hit fresh products almost immediately, as the restaurants had to close. The ... outbreak occurred in the middle of the main season for fresh cod, but much bad weather limited fishing. Reduced catches and a weak Norwegian kroner helped curb the fall in prices,” NSC Analyst Ingrid Kristine Pettersen said.

Meanwhile, the frozen cod trade amounted to 41,000 MT and NOK 1.9 billion (USD 202 million, EUR 178.8 million), up 2 percent and 12 percent year-on-year.

Pettersen said the upturn in the frozen category followed increased sales of cod in grocery channels, and that a shift toward frozen and processed products in several markets resulted in larger exports of frozen fillets during the corona[virus] crisis than the corresponding period of last year.

Strong start for pelagics

Norway’s pelagic exporters sold 154,000 MT of herring, also worth NOK 1.8 billion in the opening six months of this year. While the volume was on par with H1 2019, the value was 30 percent higher, with Poland, Lithuania, and Egypt providing the most important markets.

“We can safely say that the first half of the year has been good for Norwegian herring. If we measure in U.S. dollars, the average price is about 15 percent higher so far this year than last year, while it is 30 percent higher measured in Norwegian kroner,” NSC’s Chief Analyst Frank Isaksen said.

At the same time, some 117,000 MT of mackerel worth NOK 2 billion (USD 212.6 million, EUR 188.2 million) was sold to overseas markets, representing increases of 44 percent and 47 percent respectively.

China, South Korea, and Japan were the largest markets for Norwegian mackerel in the first half of the year. Indeed, Japan increased its imports by 44 percent in volume and 46 percent in value over the six-month period.

“The export value of mackerel so far this year is the highest ever measured. This is largely due to a sharp increase in export volume, which can be explained by increased landings of mackerel in Norway by foreign vessels. The average export price so far this year has remained virtually unchanged measured in Norwegian kroner,” Isaksen said.

In the shellfish category, Norway exported 616 MT of king crab worth NOK 209 million (USD 22.2 million, EUR 19.7 million) in the first-half of the year, down 26 percent in volume and 20 percent in value.

Isaksen said trade had been affected by the closure of large parts of the restaurant sector in most markets and the challenge of accessing air cargo.

The country’s first-half prawn exports, meanwhile, totaled 5,600 MT, with a value of 449 million (USD 47.7 million, EUR 42.3 million), down 24 percent and 17 percent respectively. 

Photo courtesy of Marius Dobilas/Shutterstock

Contributing Editor reporting from London, UK

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