INCREASING EXPORTS FROM NORWAY

Norwegian exports up in January and February 2004

During the two first months of 2004 the export volume of Norwegian herring increased by 27 per cent from the same period in 2003 and reached 103 050 metric tonnes. Frozen Norwegian Spring Spawning Herring (also called Atlanto Scandian herring) made up almost half of the total export volume.

So far this year Norwegian vessels have caught larger volumes of herring than in the same period in 2002. Between January 1 and March 15, 2004, Norwegian pelagic catches included 191 350 metric tonnes of Norwegian Spring Spawning Herring and 5 770 metric tonnes of North Sea Herring, according to Norges Sildesalgslag. In the same period last year the corresponding catches came to 146 450 and 4 020 metric tonnes respectively. Norwegian exporters have indicated that the major part of their export volumes have been registered in March, so the increase in export volumes compared to last year will become evident once the figures for the first quarter of 2004 are available.

The size and the quality of herring have been good so far this year with herring >300g dominating catches.

Negative Icelandic exports development likely to remain

The negative development in Icelandic herring exports, which was noted for the first nine months of 2003, remained until the end of the year. In 2003 total herring exports from Iceland amounted to just 37 440 metric tonnes compared with 49 790 metric tonnes in 2002. The Icelandic herring winter season was on wane already by the end of 2003 (although some 9 000 tonnes were landed in Iceland in January 2004).

Icelandic exports declined in 2003 despite a 12 per cent increase in catch volumes. The Icelandic catches of herring tend to be dominated by small sizes (<300g), and the export reduction in 2003 is to a large degree explained by good prices obtained on sales to the meal and oil industry on smaller sizes combined with declining prices on sales to human consumption. As prices on herring for consumption are expected to remain at a lower level also in 2004, it is unlikely that we will see any significant increase in exports from Iceland this year.

No big changes in EU’s export volumes in 2003

Also in EU the export trend registered during the first part of 2003 continued throughout December. With a slight increase of 12 080 metric tonnes from 2003, EU’s export of herring came to 208 150 metric tonnes in 2003. The frozen herring export increased by 7 per cent to 196,450 metric tonnes. The export volume of fillets was down by 8 per cent and reached 6,010 metric tonnes. The export of herring meat (basically flaps) fell by 11 per cent to 5,590 metric tonnes.

TOWARDS MORE STABLE PRICES IN 2004?

In general the average export unit prices reached a lower level in 2003 than in previous years. The average unit price of the Norwegian export of frozen herring fell to NOK 4,36/KG in 2003 from NOK 5,43 in 2002. For frozen herring fillets the drop was from NOK 8.94/Kg in 2002 to NOK 7,23/KG in 2003.

The price drop on the Icelandic export in 2003 was – as expected - even more drastic than in the case of Norway. The average unit price of the Icelandic export of frozen fillets fell by 25 per cent from 2002 to 2003 and went down to ISK 70,8/KG. The largest average price drop was noted for the Icelandic export to Poland. Icelandic herring fillets reached an average unit price of ISK 59,5/KG compared with 92,8/KG in the preceding year.

The same negative price development was noted for EU’s export. The average unit price of frozen herring from EU reached EURO 0,46/KG, down 8 per cent from 2002. Frozen herring fillets reached an average unit price of EURO 0,98/KG, which is 26 per cent less than in 2002. The average price of herring meat (basically flaps) fell by 30 per cent to EURO 0,76/KG.

The drop in prices can bee seen as a reaction to the too high price level in 2002 and 2001. According to exporters, 2003 probably indicated a return to a more reasonable price level. They seem to expect that in 2004 the price level will remain rather stable at the same level as in 2003. This should mean a higher degree of predictability in the markets.

So far the average prices of the Norwegian export during the two first months this year supports this expectation. The average unit price for the total Norwegian herring export in January and February 2004 reached NOK 4,76/KG, which is just per cent more than in the same period a year ago. The average unit prices to Russia and Ukraine, the two largest markets of herring from Norway so far this year, reached NOK 4,10/KG and NOK 4,30/KG respectively. In both cases this indicates a drop of 2 per cent from the prices registered in the two first months of last year.

GROWING MARKET DEMAND

Norwegian exporters report a growing market demand so far this year. Particularly Russia and Ukraine are apparently showing an increasing interest in buying. However, according to trade statistics, markets such as Latvia and Lithuania are also purchasing considerable larger volumes than in 2003. The improved demand is related to stable prices and the large size of the herring as mentioned above. In addition the weaker Norwegian currency, increasing economic stability in Russia, but also in Ukraine and the fast and growing retail sector naturally also impacts the demand in a positive way.

PROSPECTS

2004 has started out well and the industry seems to be more optimistic. Both catches and market demand have increased during the first two months of the year. Cold stores are almost empty in Norway and in Iceland. According to Icelandic industry sources some minor volumes are still stored in Netherlands and Germany. The major part is of skinless fillets for the French market. In general the prospects for the autumn season looks good and, with stable price levels, the market is expected to be more predicable than in the last few years.

Kristin Reichel Teigland
© 2004 Eurofish