Towards improvement of salmon exports?

Atlantic salmon is sold fresh, frozen, as fillets, smoked and cured. Fish farmed salmon dominates, and fresh whole salmon is the main product and accounts for about three quarters of the total value of exports. Norway also exports NOK 2 billion worth of salmon fillets. The fact that the Norwegian salmon exports amounted to 96 kilos per inhabitant in 2004 gives a perspective of the size of the industry.

The majority of the salmon is sold to Denmark, France, Japan and Germany. Other countries that buy considerable quantities of Norwegian salmon include the United States, the Netherlands, Hong Kong, and Italy among others.

The amount of exports increased significantly throughout the 1990s. Measured in kilos the quantity

doubled. In 2001 however the income was reduced by NOK 2.3 billion or about 18 per cent (though the figures are subject to more uncertainty than normal due to changes in custom declaration practices of fish exports, cf. NOS External Trade 2001 p. 28). The decline continued in 2002, but was reversed in 2003 and 2004.

Measured in tonnes the situation is somewhat different. The export volume fell by 4 600 tonnes from 2000 to 2001, but has reached an all time high every year since then.

Price cut to the half

Statistics Norway has calculated the price of salmon every week since August 1995. The price has never been lower than in the period October 2001 to March 2004, with the price per kilo fluctuating between NOK 25 and NOK 35.

The graph shows how lower prices have affected the income from exports. In May 2000 the price was NOK 43 per kilo of frozen salmon and NOK 37 per kilo of fresh. Shortly afterwards the price dropped, and by 2003 it had fallen to NOK 20, half of the top price received three years earlier. According to the 2001 annual report of the Norwegian Seafood Export Council, one of the main reasons for the falling revenue was the negative development in the world market price. In 2002 the strong NOK contributed a lot. During 2004 the NOK weakened against the euro, the main settlement currency for salmon. This has of course had a positive effect on the price that Norwegian salmon exporters get for the fish. In addition, the prices have been pushed down as a result of increased supply from Chile and Great Britain among others.

The price of salmon mainly fluctuated between NOK 20 and NOK 25 in 2003 and 2004. At the moment the price is NOK 25 for fresh salmon and NOK 25.50 for frozen.

Decline divided by country

As shown in the figure the major markets for Norwegian exports of salmon are South East Asia and the EU.

Comparing the graph for export value with the graph for export volume, it is evident that the falling price on the world market is the main factor behind the decline in export revenue from 2000 to 2002.

Falling export value is characteristic of all recipient countries. None of them imported more salmon in 2001 than in 2000. The figures for 2002 show a further decline, while the development seemed to stabilise or even change for the better in 2003. The same tendency continued in 2004, but it is difficult to project what will happen in 2005. There is an ongoing conflict with the EU about quota regulations and prices.

The graph for export volume shows a somewhat different picture. Some countries have bought more salmon during this period, while others have bought less. Japan stands out with falling volumes every year from 2000 to 2003, although this was followed by a slight increase in 2004.

Main countries for export

France, Denmark and Japan are the main markets for Norwegian exports of salmon. They dominate both in terms of value and volume and account for about a third of the sales income.

However, these countries have had a somewhat different development path in recent years. Sales income from France has fallen by a good 20 per cent from 2001 to 2004. The volume has fluctuated. And the volume sold in 2003 and 2004 is actually higher than in 2000.

In the same period (2000-2003) Denmark has reduced their imports by a third measured in value, accompanied by a significant reduction in volume. Japan stands out with sales income cut to the half and sales volume reduced by a third. The bulk of this reduction took place between 2002 and 2003.

In the case of Japan there are several factors behind the falling sales income. In addition to lower prices, Norway has met competition from other salmon producers, and has also suffered from a weaker Yen and a strong NOK.

Increased demand from Eastern Europe

Although the situation may seem rather bleak at the moment there are some bright spots on the horizon. Eastern Europeans are eating more Norwegian salmon, and the figures for volume and value have shown a steady growth since 2000. As the graphic shows, Russia and Poland are the biggest markets and accounted for 58 000 tonnes of exported salmon last year.

The Eastern European market has been a priority programme of the Norwegian Seafood Export Council. The programme has included commercial campaigns in shops, on television and in women's magazines. In addition, Norwegian salmon is less exposed to competition from other countries in this market, and the price is higher than in the EU countries for instance.