Norway sets the tone for the 2003/2004 mackerel season

The Norwegian season for mackerel is underway. In early October there were about 40 000 tonnes left of a total quota of 160 000 tonnes. At the end of September some 109 000 tonnes had been exported, whereof about 35 000 tonnes of frozen mackerel above 600 grams. The fishing will close in about two weeks time. When studying the export figures it is important to keep in mind that the Norwegian quota for mackerel this year is about 10 per cent lower than last year. It is equally important that the export figures so far only can be taken as preliminary indications as solid conclusions based on statistics only can be drawn in November or early December when the Japanese imports from Norway are finally concluded.

Prior to this year's season several Norwegian exporters expressed cautious optimism and a certain hope that the financial problems riding the pelagic industry the last few years would finally come to an end. However, it appears that the overcapacity in the Norwegian industry continues to put pressure on the prices for raw material and the corresponding profit margins. Market prices seem to be on a lower level than last season, which is in line with expectations in parts of the industry who characterize the 2002 prices as "unrealistically high". The market prices for mackerel are stipulated in the table below.

This year's mackerel fishing came off to a slow start in August/September partially due to bad weather conditions in Norwegian waters. The bigger boats also waited for the Japanese buyers to start importing, which they did around mid-September. Demand appears to be relatively good for large mackerel (600 grams and above) and smaller mackerel. Demand appears to be less good for medium sized mackerel which may be explained by this category being particularly price sensitive and thus subject to fierce competition from Ireland, Scotland and Shetland. It is worth noting that the catches so far show that the size of this year's mackerel is bigger than expected.

Japan and Russia constitute the main markets for Norwegian mackerel exports. In very general terms one could say that the Russian market is characterized by its preference for big mackerel (600 grams and above) and Japan by its emphasis on quality. So far the Norwegian export figures for the period January 2003-28 September 2003 show almost a doubling in the exports to Russia of large mackerel (6 297 tonnes) compared to the same period last year. These figures must however be taken with the necessary caution as Russian importers bought considerable quantities earlier than normal. The corresponding figures for Japan show a reduction but also here buying patterns and shipment procedures must be taken into account.

According to the same Norwegian figures exports to China continues to increase. This increase may be due to increased Japanese business in China. Poland (small mackerel) and Ukraine (big mackerel) are importing relatively big quantities, indicating that the expectations of the industry regarding the positive development in demand in Eastern Europe may be confirmed.

As regard the issue of currency, the unstable world economy gives a complex situation of rates of exchange. The main currencies for mackerel are yen and US dollar. The fact that the dollar is weakening is to some extent balanced by a stronger yen. However, these variations have an impact on all the exporters, both in the UK and Norway. The UK and Norwegian industry compete on a more level playing field this year than last year when the Norwegians suffered from an unusually strong krone and high interest rates. The Norwegian interest rates have been considerably lowered since January and the Norwegian government is constantly reiterating its objective to keep the interest rate and the krone on a "competitive" level.

The Norwegian industry is hoping that UK vessels will land more mackerel in Norway this year, but this remains to be seen.

This summer and early autumn the issue of overfishing has been hotly debated. Norwegian fisheries associations are claiming that Ireland is massively over-fishing its mackerel quota. Irish spokespersons strongly dispute the Norwegian allegations. It is expected that discussions and possibly intensified controls of fishing quotas will be on the agenda also the months ahead.

Conclusion

Norwegian industry players have diverging views with regard to the profitability of this season and the export figures available at this stage must be taken with some caution. However, there are few indications of dramatic changes in market demand compared to last year. It would also seem reasonable to anticipate that final Norwegian export figures will show an increase to Russia for large mackerel and a relatively stable export to Japan. In general, it is expected that Eastern European markets will perform well. As regard prices, they will be lower than last season but on an "acceptable" level. As regards medium-sized mackerel in particular, it would be natural to assume that the price will reflect fierce competition from Shetland, Ireland and Scotland.

Ann-Mari Haram, EUROFISH
© 2003 FAO