Norway exported 556,000 metric tons (MT) of farmed salmon worth a record NOK 32.6 billion (USD 4 billion, EUR 3.4 billion) in the first-half of this year, with the volume seven percent higher than for the corresponding period of last year and the value up four percent or NOK 1.1 billion (USD 135.6 million, EUR 115.9 million).
The second quarter was particularly strong with a value growth of 10 percent, while Q1 showed a decline of two percent.
Norwegian Seafood Council (NSC) analyst Paul Aandahl said that currency shifts had contributed to the new record, with the Norwegian krone depreciating on average by five percent against the euro, and increasing by seven percent against the U.S. dollar.
Since the E.U. buys around two-thirds of Norway’s salmon, the overall outcome had been positive, he said.
Exports to E.U. markets in the first six months totaled 361,000 MT worth NOK 24 billion (USD 3 billion, EUR 2.5 billion), representing increases of 13 percent and 9 percent respectively. The United Kingdom, France, and Poland provided the largest growth markets in this period.
Conversely, Norway’s exports to North America fell by 3 percent in volume and 10 percent in value to 26,000 MT and NOK 2.3 billion (USD 283.6 million, EUR 242.4 million).
According to NSC’s analysis, the North American market actually imported more salmon in the past six months than it did a year previously, with Chile – fully recovered from the 2016 algal bloom – supplying 30 percent more volume, and Canada providing an extra four percent.
Also in the first half of the year, Norway supplied 76,000 MT to Asia, a decrease of 8 percent year-on-year. These exports were valued at NOK 5.4 billion (USD 666 million, EUR 569.1 million), which was a decrease of 11 percent against H1 2017.
"Weak currency may be one of the reasons for the weak Norwegian exports to Asia. Another explanation may be the lack of fish in the right size. Both China and other markets in the region have strong preference for large fish. A challenging loss situation in recent years has occasionally caused the breeders to slaughter the fish instead of treating [them]. This has led to a lower slaughter weight, and thus the fish may have been too small for the Asian markets,” Aandahl said.
At the same time, the competition between salmon supplier countries to Asia has risen sharply in 2018, with the region buying in 18 percent more salmon, he said. Most of this came from Chile (+67 percent), but Canada (+489 percent) and the Faroe Islands (+56 percent) also showed good growth. Exports from the United Kingdom to Asia were stable.
Measured in U.S. dollars, the global value of Asia’s salmon value has increased by around 15 percent.
Despite the market share losses, Aandahl believes that the overall value of Norwegian salmon exports will continue to increase through the second-half of this year.
From a currency standpoint, he expects to see similar trends to last year with increased earnings coming from the “dollar markets” and a contraction in the EU markets. This, along with stable production in Chile, will enable Norway to strengthen its market share in both the United States and Asia in the second-half of the year compared with the first six months.
The Asian trade will be underpinned by the removal of trade barriers with China.
Furthermore, while Norwegian salmon is often not in direct competition with Chilean salmon, strong demand growth from Russia will remove Chilean and Faroese salmon from other markets, he said.
“This provides opportunities for Norwegian salmon," Aandahl said. "Overall, I expect the current value growth to continue. This is also supported by the Seafood Council scenario model, which indicates 4 percent value growth also in the second half.”
For the full-year 2017, Norway exported one million MT of salmon worth NOK 64.7 billion (USD 8 billion, EUR 6.8 billion).
