Difficult trading times for herring

2006 was a slow year for the herring trade, with imports and exports falling throughout Europe. Unit values showed a couple of high peaks, but in general the trend was downwards.

The latest intelligence has it that a considerable quantity of summer herring remains in cold stores, and much of it in fillet form. While some of this will undoubtedly be turned into fishmeal, it is feared that the rest will be used as a lever to drive down the trading value of North Sea herring.

In the period January – November 2005/2006 total herring imports into Germany fell by -23% to 50482 tonnes. Imports of frozen herring saw the sharpest fall, as Germany imported just 4656 tonnes, or 43% of 2005 imports for this product. The fall in frozen herring imports accounted for 42% of the reduction in overall herring imports in 2006.

Unit values rose across all products, with a +13% increase overall. The price of frozen herring imports improved the most at +36% to 0.79€/kg, in line with the reduction of volume imported. The highest unit value achieved was for imports of frozen herring fillets from the Netherlands, which leapt by 54% to reach 5.79€/kg in 2006.

Norway continues to supply the greatest volume of herring products into Germany, accounting for 54% of total imports in 2006. Norway grew its exports into Germany by 4% to 27163 tonnes during the reference period, with unit values increasing slightly by +1% across all products.

This is in line with a reported increase in consumption of seafood in Germany, particularly of herring, which now accounts for 18.2% of the all seafood consumed in the country. Per capita seafood consumption was 14.8kg in 2005, up from 13.8kg the previous year and expected to top 15kg when the 2006 total is released.

The category of “other frozen herring products” (excluding whole and fillets) was the only category to register an increase in import volume during the period, with total imports rising +2% to 21574 tonnes. This consolidated its position as the most imported herring product category, rising +11% to 43% of all 2006 herring imports.

Imports of fresh or chilled flaps of herring decreased by -31% to 13764 tonnes in 2006, accounting for 40% of the overall reduction in herring product imports. The reduction in volume contributed to a +14% rise in unit value to 0.99 €/kg in 2006, and was largely influenced by an 0.11€/kg (+12%) increase in Norwegian imports of this product.

Despite a -14% reduction in imports of frozen herring fillets to 8648 tonnes, the product jumped one position to the 3rd most imported product, accounting for 17% of imports in 2006.

Salted herring or herring in brine was the least imported product for both years. At 1840 tonnes it accounted for just 4% of 2006 imports. However, German consumers have increased their appetite for roll-mops and Matjes herrings, with volume sales increasing by 4% to 33 400 tonnes over the first six months of 2006 with a value of € 141 million.

During the period January- November 2005/2006 the overall value of UK herring exports fell by -21% to €26,221,000. Overall unit values increased by +1% to 0.59€/kg but the volume of total herring exports suffered a -22% reduction to 44696 tonnes.

Germany and the Netherlands are the main recipients of UK herring exports although collectively their influence was slightly reduced as they accounted for 58% of the value and 63% of the volume in 2006, -6% and -5% respectively. The third largest recipient Russia, grew over the period to receive 17% of all volume and 18% of all value in 2006.

Frozen herring accounted for 79% of herring exports in 2006, but exports of this product slumped -24% over the period to 35213 tonnes. Significantly this reduction in volume accounted for 45% of the total reduction in herring exports across all products.

Unit values of frozen herring fell -4% to 0.50€/kg, negatively impacting on the total value of this export which dropped -27% to €17,552,000 in 2006.

In total Germany received 15337 tonnes of frozen herring product, -62% less than the Netherlands. However the higher unit value of product exported to Germany made it the most valuable frozen herring market during the period at €6,275,000.

In 2006, the Netherlands accounted for 40% of total UK herring exports but only 23% of total value, while the German market received just 23% of total exports but accounted for 35% of total value.

Frozen herring fillets remained the second most exported product, accounting for 16% of the market across the reference period. The unit value increased +10% to 0.97€/Kg although export volume dropped -17% to 7571 tonnes resulting in a -9% reduction in the value of these exports to €7,315,000.

In the market for chilled herring flaps, reductions in exports to Russia and the Netherlands were countered by +178% growth in cheaper exports to Germany and Latvia and overall unit values dropped -24% to 0.70€/Kg.

Exports of other frozen herring products (mainly flaps) grew a staggering +324% to 1052 tonnes. This was due to Russia which materialised as a new market, receiving 98% of the UK product in 2006. Despite the loss of all exports to Denmark (worth €56,000 in 2005), the value of this export market soared +437% to €753,000.

Russia’s turning to the UK for supplies was influenced by the country’s new import procedural rules, which brought all exports of seafood from Norway – its largest supplier - to a halt. The problem was triggered by the discovery of forged veterinary certificates on Norwegian seafood products and resulted in the introduction of more secure export certificate documentation. It also meant that all processing and handling facilities in Norway were required to undergo inspection before being allowed to export to Russia. This led to chaos in the marketplace, which is still in the process of being resolved.

The Norwegian Seafood Export Council has countered with plans to undertake marketing campaigns for herring in China, but building a new market to equal the size of that in Russia will take some considerable time.

Norwegian exports of herring products fell by -8% to 37175 tonnes in the period January – December 2005/2006 and with the average unit price across all products falling from 6.87NOK/kg to 5.96NOK/kg, it was a tough year for this export market.

Despite a reduction in the export volume of frozen whole herring in 2006, it remains the leading export product, accounting for 75% of total exports. The highest unit value was achieved on exports to the Netherlands which at 8.86 NOK/kg in 2006 was +63% higher than the next highest unit value for that product.

Despite problems in the autumn, Russia remained the largest recipient of Norwegian herring exports, receiving 185693 tonnes in 2006, which was a reduction of -16% on 2005 levels. The Ukraine continued to be the second largest recipient in 2006 despite a -19% reduction and reports that many suppliers had ceased trading with the country due to difficult market conditions.

Exports of fresh or chilled herring flaps dropped -15% and exports to individual countries were relatively small, with Poland, the largest recipient at 358 tonnes in 2006. However, this product accounted for some strong unit values, with exports to Denmark achieving the highest of all products in 2005 and 2006, at 12.29NOK/kg.

Frozen herring fillet exports grew by +7% and accounted for 25% of total herring exports in 2006. This growth in volume hit unit value, with reductions between -10% and -18% resulting in a 2006 unit price of 8.04 NOK/kg.

Salted herring and herring in brine remained at less that 1% of total exports despite good growth, but was been accompanied by a -14% reduction in unit value to 8.96NOK in 2006.

Average reported* Norwegian export prices over the past two years for frozen whole herring fell by 0.15 US$/kg, while those for flaps fell by 0.3 US$/kg. During 2006, higher unit values were reported during October and December for whole product, while flaps showed a decline from October onwards.

Nicki Holmyard (Eurofish)
© 2007 FAO