The export value of Norwegian seafood has never been higher in the first half of the year than in 2022. During the recent January through June period Norway shipped product to customers abroad worth NOK 70.1 billion, according statistics posted on July 5 by the Tromsø-headquartered Norwegian Seafood Council. This is a value growth of 31 per cent, or NOK 16.4 billion, compared with the first half of 2021.
At the same time, results in June of this year were the strongest ever for the month, with an export value of NOK 12.3 billion. This is an increase of 35 per cent, or NOK 3.2 billion, compared with the same month last year.
Rising global food prices, lower raw material supply and strong growth in demand are the main reasons for both monthly and half-year records. After just six months, exports have exceeded the value generated during the whole of 2015.
“I am delighted that the seafood industries are recording another export record for the first half of the year. Over NOK 70 billion in just six months is a very impressive result. This underscores how important the sector is for value creation, job security and coastal economic activity,” said Norway Minister of Fisheries and Marine Affairs Bjørnar Selnes Skjæran.
Fantastic Year for Salmon
Salmon still accounts for the largest share of export value, while other species including trout, cod, saithe and haddock also contributed to a record-breaking six months.
Measured in export value, 2022 has so far been a fantastic year for Norwegian salmon. Lower production volumes and increasing demand have resulted in record high prices, which provided a significant contribution to the export record in the first half of the year.
The first half of the year has seen major and drastic changes in the world community, with the negative impact of war launched by Russia in Ukraine and the positive shift toward reopening and commercial normalization following coronavirus pandemic lockdowns. In addition to the horrific human suffering in Ukraine, the war has affected global trade and sparked a food crisis.
Despite the strong value development of seafood exports in the first half of 2022, the following challenges may slow down growth going forward: high food inflation; weakened purchasing power; logistics strains; increased costs for seafood producers and processors; lower supply of species such as salmon, cod, mackerel and herring.
Norway exported 534,500 tons of salmon worth NOK 48.4 billion during the first half of the year. While the volume fell by 5 per cent compared with the first half of 2021, export value rose by NOK 13.2 billion, or 37 per cent, when measured against the like period last year. The average price for fresh whole salmon increased from NOK 58.29 per kg to NOK 87.37 per kg, with importers in Poland, France and the USA ranked as the largest buyers.
Increasing Demand and Falling Production
“Both record price and record value come as a result of a combination of demand growth and reduced production of Atlantic salmon globally. From a historical perspective, we see that years without growth in volume globally give strong price growth. This is the fourth time since 2010 that the price has risen, so it is a pattern we see from time to time,” said Paul T. Aandahl, a seafood analyst with the Norwegian Seafood Council.
At the same time that supply volume is decreasing, demand is increasing. This is partly due to rising sales to the hotel and restaurant sector.
Closed Airspace Results in Export Declines
“The war in Ukraine has led to reduced exports to that country and Belarus. For the export of fresh salmon to Asia, closed Russian airspace has had a great effect. In particular, this has affected shipments to countries such as South Korea and Japan. In total, exports of salmon to these countries have fallen by 18 and 20 per cent, respectively, measured in volume,” said Aandahl.
The price increase has also led to a distortion in the flow of goods from countries where salmon largely go for smoking before further export. Volume shipped to Poland, for example, has fallen by 18 per cent.
Strong Growth in French and Italian Markets
“The largest increase in value has been to France and Italy. To France, the value increased by 50 per cent, while the export volume increased by 7 per cent. Exports to Italy increased by 62 per cent in value, while volume increased by 3 per cent,” said Aandahl.
Salmon exports in June were the best single month ever measured in value. The previous record was set in December 2021. In June of this year 87,800 tons were exported at a value of NOK 8.8 billion. While this represents a decrease in volume of 11 per cent, value rose by NOK 2.6 billion, or 41 per cent, compared with the same month last year.
Solid Six Months for Trout
Norway exported 23,800 tons of trout that generated NOK 2.1 billion during the first half of the year. While volume fell by 5 per cent, value increased by NOK 562 million, or 35 per cent, compared with the first half of last year. The USA, Thailand and Japan were the largest markets. Measured in export value, trout ranks as the third-largest species so far this year, surpassed only salmon and cod.
“Trout has seen about the same change in export value as salmon. The trout price tends to follow salmon prices quite closely. The average export price for fresh whole trout was NOK 89.65 per kg, compared with NOK 87.38 per kg for salmon. Belarus and Ukraine are the markets that have declined the most in value so far this year, while Thailand and the USA are the countries that have had the greatest growth” said. Aandahl.
June saw a fall in the export volume of trout, as value rose sharply. Approximately 4,700 tons worth NOK 476 million were exported, while volume slipped by 7 per cent. The value of trout exports increased by NOK 146 million, or 44 per cent, compared with June of 2021.
Strong Half-Year for Frozen Cod
Norway exported 50,600 tons of frozen cod worth NOK 2.5 billion in the first half of 2022, registering an increase in volume of 14 percent. During the same period, value
rose by NOK 733 million, or 43 per cent, compared with the first half of last year. China, the United Kingdom and the United States were the largest takers of frozen cod from Norway in the first half of the year.
The export value of frozen cod in June increased by NOK 169 million, or 82 per cent, compared with June of 2021.
“The export volume to the USA continues to grow, and in the first half of the year the country was Norway’s third largest destination country for frozen cod. The export volume of frozen whole cod increased from 170 to 3,100 tons, while frozen fillets decreased somewhat, from 630 to 460 tons,” said Eivind Hestvik Brækkan, an analyst with the Norwegian Seafood Council.
Growing Sales in USA Market
The United States’ own cod quotas have been declining for a number of years. Meanwhile, Washington has also imposed a total ban on imports of seafood from Russia following its military invasion of Ukraine.
“This contributes to a sharp increase in the export of cod from Norway to the USA. In addition, a smaller volume of frozen cod has arrived from China to the United States, compared with before the corona pandemic,” said Anne-Kristine Øen, the Norwegian Seafood Council’s envoy to the United States.
June was also a month of growth in both volume and value for frozen cod exports, as 6,500 tons worth NOK 372 million were shipped abroad. There was an increase in export volume of 30 per cent. Export value jumped by NOK 169 million, or 82 per cent, compared with June last year.
Decline for Herring
Norway exported 142,200 tons of herring worth NOK 1.8 billion in the first half of the year. Volume fell by 15 per cent and value declined by NOK 67 million, or 4 per cent, compared with the first half of last year. Poland, Egypt and Lithuania were the most important markets.
“For Norwegian spring-spawning herring (NVG), the quota has been reduced by 8 per cent this year compared with 2021. However, landings of herring in the first half of 2022 have been reduced by 18 per cent compared with the same period last year. The decline was due to challenging fishing conditions, with a lot of bad weather experienced. In addition, parts of the fleet were busy with capelin fishing in Iceland at the same time as the herring fishing was going on,” said Jan Eirik Johnsen, the Norwegian Seafood Council’s manager for pelagic species.
Early Start to Fishing Season
The war in Ukraine has affected the export of herring both directly to Ukraine, but also to Lithuania, which is a transit market for exports to several markets in Eastern Europe.
“With regard to North Sea herring, the quota was set at 21 per cent compared with 2021. Approximately 99,000 tons have been landed here, compared with 72,000 tons last year – an increase of 38 per cent. Due to a lack of access to fishing in British waters and an increased quota, the North Sea herring season started earlier than usual. It has produced a lot of small herring of variable quality, which has led to a larger share going to the production of fishmeal and fish oil,” said Johnsen.
Fall in Export Value of Mackerel
Norway exported 84,200 tons of mackerel that fetched NOK 1.6 billion in the first half of the year. There was a decrease in export volume of 28 per cent, while value fell by NOK 188 million, or 10 per cent, compared with the first half of 2021. South Korea, China and Japan were the largest markets during the first half of this year.
Like herring, mackerel exports are largely supply controlled. In addition, the fishing and export season starts in one year and ends in the next. This presents some challenges when comparing half-year figures.
Impact of Bad Weather in January and February
“Lack of access to mackerel fishing in British waters means that Norwegian boats do not fish for mackerel in January and February as they did before. Thus, only foreign boats deliver mackerel at the beginning of the year. As with the herring fishery, the mackerel fishery was affected by bad weather, and this resulted in a lower volume being landed,” saId Johnsen. “If we compare the first half of this year with the same period in 2021, just 56,000 tons were fished, compared with 75,000 tons a year earlier – a decrease of 25 per cent.
Johnsen continued: “At the same time, demand for Norwegian mackerel is strong in export markets. Scarce supply and strong demand have raised prices significantly. The average price of frozen mackerel under 600 grams, which accounted for 93 per cent of exports, was NOK 18.41 per kg in the first half of this year, compared with NOK 14.82 per kg in the same period last year, an increase of 24 per cent.”
Asia is the most important destination for Norwegian mackerel, accounting for 67 per cent of exports in the first half of the year.
Growth in China and Thailand Shipments
“The total decline in mackerel exports results in a decline in most markets also in Asia, but China and Thailand stand out with growth also in this period. Growth is particularly strong in Thailand, where exports increased by 69 per cent in the first half of the year. Removal of coronavirus restrictions increased restaurant consumption, which explains explains the growth,” said Johnsen.
Decline in King Crab Exports
Norway exported 609 tons of king crab worth NOK 388 million in the first half of the year, which represented a 46 per cent decrease in volume. Value fell by 35 million, or 8 per cent, compared with the first half of 2021,
The United States, the Netherlands and South Korea were the largest importers of king crab from Norway during the six-month period.
Compared with a very strong first half last year, exports of both live and frozen king crab have declined by 46 per cent, but high prices compared with 2021 mean that the value was reduced by only 8 per cent.
Challenging Logistics to Asia
“Live seafood exports have been characterized by corona restrictions and increased infection rates in Asia, challenging logistics and increased competition for live king crab in the Asian markets. As a result, exports of live king crab to Asia have declined by 60 per cent in terms of export value and 74 per cent in export volume,” said Josefine Voraa, the Norwegian Seafood Council’s shellfish manager.
Strong Growth in North America
Shipments to North America, on the other hand, saw export value soar by 343 per cent and volume rise by 166 per cent as a result of high demand in the restaurant segment.
“For frozen king crab, there has been a decline in direct exports to the two major consumer markets of the USA and Japan, and an increase to the transit markets of the Netherlands and Denmark. High export prices for frozen compared with the first half of last year mean that the export value is only down two percent compared to last year,” reported Voraa.
June also showed the same trend, with a decline in both export volume and value. Approximately 95 tons of king crab worth NOK 65 million were shipped abroad, reflecting a volume decrease of 54 per cent and slippage in value of 23 percent to NOK 19 million compared with June of 2021.
Snow Crab Growth has Stopped
Norway shipped 3,000 tons of snow crab worth NOK 548 million abroad during the first half of this year. This was a decrease in export volume of 14 per cent, value fell by NOK 45 million, or 8 per cent, compared with the first half of 2021.
Denmark, Japan and the USA were the largest recipients of Norwegian snow crab in the first half of the year. Good fishing and increased activity in snow crab fishing have led to increased landings and a record-breaking end to the season.
Adjusted Demand
“A challenging market situation in the last quarter has led to a decline in exports compared with the first half of last year. In the first quarter, the export price averaged NOK 208 per kg, while in the second quarter it was reduced to NOK 171 per kg. It testifies to a changed demand situation for snow crabs globally,” said Voraa.
Last year, buyers in the United States could not get enough snow crab, but this year the market has been characterized by lower demand, larger inventories and an increase in quotas in Canada. This has led to a decline in direct exports to the USA of 66 per cent in volume and 67 per cent in value.
Distorted Picture for Exports
“The market situation in the United States has led to a shift in exports from the USA market to Asia and the transit market in the Netherlands. To Asia, despite the coronavirus situation and increased competition, there has been greater demand for frozen snow crab. In the first half of the year, the export value to the Asian markets increased by 108 per cent, or NOK 111 million,” reported Voraa.
June 2022 was also weaker than the same month last year, as 506 tons of snow crab worth NOK 77 million were exported. The volume reduction amounted to 42 per cent. Value declined by NOK 92 million, or 54 per cent, compared with June of 2021.
Growth in Prawn Exports
Approximately 8,000 tons of prawn worth NOK 503 million were exported in the first half of 2022, up
121 percent in volume and 10 percent in value to NOK 44 million. The largest buying nations were Sweden, the United Kingdom and Iceland.
Prawn exports developed well during the first half of the year. A good start to the fishery in the Barents Sea and a return to normalization of restaurant business in Norway’s most important prawn markets of the United Kingdom, Sweden and Finland led to an increase in sales of frozen peeled prawn of 2 per cent in volume and 10 per cent in value.
“Especially towards the United Kingdom, there has been an increase in exports. The export price was NOK 76 per kg, which while higher than last year, is still not quite on a par with 2019 when the export price was NOK 86 per kg. The opening of restaurants and more people back in offices have contributed positively to the demand in the British market,” said Voraa.
In addition to the positive development for frozen peeled prawn, there has been a rise in the export of prawn to the processing sector in Iceland. The increase during the first half of this year weighed in at 860 tons compared to the first six months of 2021.
Also in June, there was growth in both export volume and value. Approximately 2,000 tons worth NOK 118 million were exported, up 13 per cent in volume and 22%. The value increase amounted to 22 per cent, or NOK 21 million.
