It is likely the trade sanctions imposed by the EU on herring landed by the Faroe Islands will raise pelagic prices in Europe, at least on a temporary basis, according to traders.
At the end of August, Brussels carried through with its threat of implementing a ban after the Faroes refused to budge on its unilaterally set quota of 105,023 metric tons (MT) for Atlanto-Scandian herring. Its new quota upset both the EU and Norway because it was three times as much as the share it was entitled to under the original five-party management agreement with Norway, EU, Iceland and Russia.
The sanctions, which EU Fisheries Commissioner Maria Damanaki called "a very last resort," mean European countries are currently banned from importing herring from the self-governed Danish territory.
Not surprisingly, the Faroese Prime Minister, Kaj Leo Holm Johannesen, slammed the decision as an "unacceptable abuse" of the EU's power. Similar criticism of the EU's latest move came out of Iceland. Again, this is little surprise to observers as the Faroes and Iceland are also locked into a dispute and face similar measures with the other Northeast Atlantic fishing nations regarding mackerel fishing. The two coastal states set unilateral 2013 mackerel quotas of 159,000 MT and 123,000 MT, respectively.
There are vastly differing opinions on how the herring ban will affect the Faroese industry and the country's economy as a whole, but while some industry members, mostly in the Norwegian and EU pelagic sectors, hope the sanctions will give enough incentive for the coastal state to return to the fold, most Faroese exporters remain bullish.
According to sources in the islands, while the seafood industry is very much dependent on its fisheries exports and ships about USD 230 million (EUR 174.1 million) worth of herring and mackerel overseas, half of which traditionally goes to EU member states, it has long anticipated the trade sanctions and has been busy building markets outside Europe, such as Africa and Asia.
At the same time, Europe will have less herring available, which will drive prices up, traders have claimed.
Frozen Atlanto-Scandian herring at the start of September was being exported at around USD 1,300 (EUR 984) per MT, up from USD 1,200 (EUR 909) in September 2012.
The Faroes' 5.16 percent share would have equated to around 32,000 MT. Such a low volume would not reflect the biological shift of the stock, says its fisheries minister Jacob Vestergaard.
Norwegian fisheries authorities have also imposed a ban on the import of herring caught by Faroese vessels. — Jason Holland
