Norway

So far in 2008 the picture has been dominated by the future of farmed cod and the presence of wild herring. Let's begin with the herring. Norwegian fishermen have access to two major herring tribes: North Sea Herring and Atlanto-Scandic herring. The North Sea herring is, for the time being, not in a very good condition, so we will stick to the much more abundant Atlanto-Scandic. The 'Norwegian' tribe of the Atlanto-Scandic herring is called Norwegian spring-spawning herring, and is actually both the largest herring stock in the world and the largest fish stock in the North Atlantic. Spawning occurs on the Norwegian coast during winter and early spring, however, the herring shoals have also disappeared - due to a change in migration pattern or because they have simply diminished. This year they are present - and they are large!

Herring for Nigeria

On 25 October 2007, the EU, Faroe Islands, Iceland, Norway and Russia agreed to fish 1,266,000t of Norwegian spring-spawning herring. The Norwegian share (61%) is 772,260t, which is a tremendous amount. Spring this year was showtime for the might and abundance and adventure of the silver darlings. The Directorate of Fisheries had to make special restrictions to avoid burst nets. Fishing for the herring is an adventure, but it is also a challenge for fishermen, inspectors, industry and salesmen. The total volume was enormous, but there was also a lot of rather small herring. For the fishermen the prices cooled the fever.

In April, Nigeria was Norway’s biggest export market for herring measured in tonnes. During the first four months the Nigerians bought 82,650t of frozen herring. Egypt and the Ukraine also ended up with big shares of the catch. The Russians are buying bigger and more expensive fish and still represent the most important herring market in value.

Norway Pelagic applied for listing on the Oslo Stock exchange on 29 April, a few weeks after the herring had finished spawning. The timing must have been close to perfect. "There has never been delivered so much raw material for the pelagic consumption industry", CEO Gunnar Domstein said when the first quarter report of 2008 was presented. Norway Pelagic, which was established on 1 July 2007, actually represents 35-40% of the capacity of the same Norwegian pelagic industry. Ten factories are included, and Norway Pelagic is the world’s largest producer of herring and mackerel for consumption. This year 400,000t of pelagic fish are expected to be handled by the 460 employees along the coast of Norway. The main markets are Japan for mackerel and horse mackerel and Russia for herring, but fish from Norway Pelagic is sold in all major markets. Despite the small size and the sales to the African market the margins have been satisfactory for the Norwegian giant.

Other fat herrings

Norway Pelagic is not the only new Norwegian pelagic giant and it will certainly not be the first on the Oslo Stock Exchange. In October 2006 Austevoll Seafood was listed. Austevoll Seafood is more globalised than Norway Pelagic as it is a big catcher both in Norway, Chile and Peru. The main volume is turned into fishmeal and fish oil, although Austevoll Seafood could satisfy one's hunger for both canned fish, frozen fish and even high concentrate Omega 3 oils. The company, which still is controlled by the Møgster family, is also into salmon farming and salmon processing.

This year Austevoll Seafood bought 40% of the large fishmeal producer in Bodø, Bodø Sildoljefabrikk. Austevoll Seafood has also strengthened its position within the Lerøy Group by having two chairs on the board of Norway’s third largest seafood company.

The largest producer of pelagic fish in the North of Norway is the family-owned Nergård group. The Troms company has also had its share of herring, even though the company's main activity is white fish, and shrimps also have to be counted. The salmon activities were sold to Salmar in October 2006. Magnar Pedersen was appointed the new CEO of the Nergård Group in October last year.

Cod struggles

Wild cod is not numerous, though the quotas for Northeast Arctic cod have actually increased. This is probably due to the fact that the IUU (illegal, unregulated, unreported)

fishery of the Barents Sea has been considerably reduced – in part an effect of the efforts of the Norwegian Minister of Fisheries and Coastal Affairs, Helga Pedersen. The large cod stock in the North is governed by Norway and Russia together. The size of the spawning stock of Northeast Arctic cod is slowly decreasing, but is still above the historical average.

The status of North Sea cod is, of course, much more negative. Greenpeace recently red listed 'cod in general', receiving a strong reaction from Terje Martinussen, CEO of the Norwegian Seafood Export Council.

The first Norwegian fish stock to be approved by the Marine Stewardship Council was saithe, which received the MSC-label right before summer. North sea herring, Norwegian spring-spawning herring and mackerel are next in line, and will probably be followed by cod and haddock.

Does farmed cod represent an alternative? Could it be the new salmon? If so, do we risk the new cod overflowing the market? Well, farmed cod certainly has a long way to swim to get there.

Codfarmers growing up

The Norwegian production of farmed cod was 11,087 tonnes in 2007. This is enough to be the big fish in the new cod adventure – Scotland, Canada and Iceland were miles ahead until now. Yet 11,000t represents less than 5% of the total Norwegian cod catches. Even though hundreds of millions are invested in cages, feed and R&D, farmed cod is still a juvenile. To give an example, the Norwegian salmon breeding programme that was started in the mid-eighties has supported the health and growth of both farmed salmon and the business around it. The two Norwegian cod breeding programmes began in 2002 and 2003, and the breeding companies are still waiting for the third generation. The red salmon has been a guiding star, but the cod challenges have been different; smaller eggs, other behaviour, different diseases, different diet and, of course another market.

Some of the first and largest optimists have already given up, but there is a huge stock left. Codfarmers is probably the most aggressive. Codfarmers was listed on the Oslo Stock Exchange as the first cod farming company on 19 October 2006. In March 2007 they established a juvenile and on-growing facility and entered into a strategic partnership with the breeding company Marine Breed AS. The CEO of Codfarmers is Øystein Steiro, who earlier has had central positions in Coca Cola, Stolt Sea Farm and Cermaq.

"Cod farming will grow faster than salmon farming did and within 20 years the volume of farmed cod will equal farmed salmon", Steiro stated last autumn. After that quite a few analysts and experts have been out in the press with less optimistic figures. Anyhow, there is growth, all along with the challenges and the high expenses.

In February the theoretical capacity of established cod producers was measured to be 154,400t. Codfarmers was actually number three, with a capacity of 15,180t. Spon Fish was in the lead with 21,840t, followed by Marine Harvest cod (19,500t). Other producers with a capacity above 10,000 tonnes were Fjord Marin Cod, Grieg Cod Farms, Norway Cod and Havlandet Havbruk. Since then some of them have had a capacity increase, and the capacity of Codfarmers is now 21,030 tonnes. Some of the names mentioned are owned or part-owned by major salmon companies. Some produce their own juvenile, but there are also separate cod juvenile producers.

Another interesting question is what will happen to the price of cod if Norwegian cod farmers and/or their colleagues in other countries succeed?

Salmon still the big fish

There is no doubt that farmed salmon will be the big brother for a long, long time. The Norwegian multinational salmon companies have struggled with diseases and trouble in Chile, while the business in Norway has generally been good. 2008 may be the year when Norway gets rid of the minimum export price for salmon into the EU market. 73% of Norwegian salmon exports go to the EU market.

Norway had complained against the EU anti-dumping measures and on 9 May the new Norwegian seafood newspaper FiskeribladetFiskaren reported that the commission had decided to remove the minimum prices. FiskeribladetFiskaren is a merger of two former competitors - Fiskeribladet in Harstad and Fiskaren in Bergen. New unions seem to be the trend in all parts of the Norwegian seafood business.

In the last two years the trend has also been growth in Norwegian seafood exports. 2006 was the first year when the value of exports from the fish-farming sector was greater than for the traditional fisheries. This was repeated in 2007, although the traditional fisheries gained on the fish farming industry. The exports of salmon increased in 2007 from 129,000t to 706,000t. Of this 509,000 tonnes went to the EU. In addition to salmon, 2007 was a good year for cod and herring. The export value of cod increased by approximately €93m, accounting for half of the growth in Norwegian seafood export in 2007.

According to the Norwegian Seafood Export Council, France was the largest importer of Norwegian seafood in 2007, but Russia was at the same level, despite certain import restrictions. France and Russia imported seafood from Norway worth some €475m each. The import level for France was the same as in 2006, while the trade with Russia has increased by almost €75m.

During the four first months of 2008 exports fell by 1% compared to 2007. But the sales in April turned out to be the best ever and 15% above the 2007 level. "Despite the unrest in the world economy and the strong Norwegian currency we conclude that the international demand for Norwegian seafood is strong", Egil Sundheim from the NSEC says. Increased export of salmon trout, herring and salt cod explains much of the April growth.

The total salmon export actually went down in the first part of 2008 even though the volume went up to 193,000t. Now the Norwegian salmon exporters are waiting for both saying goodbye to the minimum price and to see salmon prices rise.

Trillions for the future

What about the future of Norway's wild fish stocks? This certainly is a complicated question. Now climate change also has to be taken into consideration. This could be good for some fisheries, but not necessarily, and is different to control. Another issue is the herring juveniles eating the capelin juveniles which are expected to grow up to be cod food. There could actually be enough capelin to open the fisheries next year, but those who fish cod are reluctant. The most certain fact is that herring lovers should feel safe for many years to come. In early May Norwegian marine scientist measured the amount of herring larvae to be 108 trillion! The spawning stock numbers 10-12 million tonnes. Maybe kippers for breakfast?