Will cod exacerbate UK-Iceland relations?

The ongoing dispute between the United Kingdom and Iceland over the latter’s decision to set its own, much higher mackerel quota is almost certain to crank up another notch or two with the arrival in the British market of significantly increased amounts of Icelandic cod.

Fisheries and Agriculture Minister Jon Bjarnason increased Iceland’s annual cod quota by 10,000 metric tons, to 160,000 metric tons, as of 1 September.

A lot of Icelandic cod is traditionally sold in the UK, and once the new catching season starts in earnest, many observers expect the market will be flooded and prices of all cod will tumble. Already under strong financial pressure, Scottish fishing communities are worried that a number of their businesses will not be able to overcome this latest hurdle.

Icelandic fishermen had been calling for a 30,000 metric ton increase this year. Still, according to Icelandic sources, the instigated increase in the cod quota will see its value increased by around ISK 4 billion (USD 34.3 million, EUR 23.3 million).

It’s a much different picture for Scottish boats, which have had to contend with a reduction in the level of their cod landings. Normally in such a scenario, supply and demand mechanisms would come into play and the prices of Scottish-landed whitefish would increase. But with extra supplies coming in from Iceland, this isn’t expected to happen this year.

According to reports out of Scotland, the price of its cod — which sold on Peterhead Fish Market on Friday for between GBP 2.70 (USD 4.22, EUR 3.23) and GBP 3.70 (USD 5, EUR 3.83) per kilogram — may drop by more than GBP 1 (USD 1.56, EUR 1.20) per kilogram once the effects of the additional Icelandic cod are felt on the market.

Not surprisingly, the situation has the keen attention of UK buyers. A leading foodservice supplier told SeafoodSource that high profile clients — think large corporations with thousands of workers to feed — cannot afford to be tripped up by any unsustainable purchases. Such moves would contravene very precise and commonplace codes of practice.

At the moment, Iceland is using science to justify its significantly higher cod quota, said the supplier, but most of these companies have sustainability officers and questions are definitely being asked of suppliers.

In the meantime, Scottish Fisheries Secretary Richard Lochhead has unveiled a “Four Pillar” management plan designed to protect the fishing industry’s future.

More than GBP 12 million (USD 18.8 million, EUR 14.4 million) will be invested in the plan, some of which will fund a license parking program and fleet modernization. Half this investment has come from the European Fisheries Fund.

The strategy contains measures to ride out the economic recession and to maximize catch value, which amounted to GBP 433 million (USD 693 million, EUR 519 million) last year. Unfortunately, the scheme may have come too late for some.