Weak kroner, record prices push Norway to best-ever first-quarter export earnings

Record prices and a weak kroner helped push Norway’s seafood export earnings in Q1 2023 to an all-time high, but Norwegian Seafood Council (NSC) CEO Christian Chramer cautioned the strong performance could signal underlying trouble with world trade.

Norway’s seafood export value swelled by 22 percent, or NOK 7.4 billion (USD 698.9 million, EUR 640.5 million), year-on-year for the first quarter of 2023, reaching a total trade value of NOK 41.4 billion (USD 3.9 billion, EUR 3.6 billion). The previous Q1 record – set in 2022 – saw NOK 34 billion (USD 3.2 billion, EUR 2.9 billion) worth of fisheries and aquaculture products sold to overseas markets.

The country exported a total of 693,400 metric tons (MT) of seafood in the first three months of 2023, an 8.7 percent decrease on Q1 2022.

In a press release, Chramer said a “significantly weaker” Norwegian kroner, and higher market prices for species such as salmon, cod, trout, pollock, and herring were the main drivers of the quarter’s value growth. These prices also helped Norway set the biggest export value total for a single month in its history, with the country earning NOK 15.7 billion (USD 1.5 billion, EUR 1.4 billion) in March 2023. This was 26 percent, or NOK 3.2 billion (USD 302.1 million, EUR 276.9 million), more than the third month of 2022, and NOK 561 million (USD 53 million, EUR 48.5 million) more than the previous record achieved in October 2022.

Chramer said despite setting Q1 sales records for salmon and some whitefish species, the picture for Norwegian exporters is not so positive.

“Strong food inflation and the weak kroner explain a large part of the increase in value, and in addition the export volume of cod and salmon is falling, which helps to raise prices,” he said.

NSC calculated the weak kroner lifted the export value by around NOK 3 billion (USD 283.2 million, EUR 259.6 million) in the quarter, while increased market prices contributed to a NOK 6 billion (USD 566.4 million, EUR 519.1 million) increase. The fall in volume, meanwhile, reduced the export value by around NOK 1.8 billion (USD 169.9 million, EUR 155.7 million).

“World trade will also be affected in 2023 by war and turmoil in the world economy, so we are still living in challenging times. This is felt keenly in the markets, where consumers are now experiencing that their purchasing power has been substantially weakened,” Chramer said.

Continuing a recent trade trend, Norway’s exports to the U.S. grew the most of any country in Q1 2023, with an increase in export value of 40 percent, or NOK 1 billion (USD 94.4 million, EUR 86.5 million), compared to the corresponding period of last year. NSC said salmon sales have been driving the increasing export value to the American market, but that trout and frozen snow crab sales were also strong in the quarter.

Norway Minister for Fisheries and Oceans Bjørnar Skjæran had praise for industry’s export achievements in the quarter.

“It’s positive that the U.S.A. has proven to be a strong growth market for several species in the first quarter. For king crab and snow crab, the U.S.A. is one of the biggest markets this quarter, with growth in both value and volume,” Skjæran said.

The United States purchased 19,000 MT of Norwegian salmon worth NOK 988 million (USD 93.3 million, EUR 85.5 million) in the first quarter, with up 18 percent by volume and 53 percent by value. 

According to NSC Seafood Analyst Paul Aandahl, the weakening global supply of salmon, the growth in demand, and a strong dollar are the explanations for the “explosive growth” in the exports to the U.S. market. He also pointed to increased salmon consumption in U.S. restaurants since restrictions related to the coronavirus pandemic have lifted, while home consumption has remained elevated.

Total salmon exports from Norway for the period reached 263,000 MT, down 6 percent, valued at NOK 28.8 billion (USD 2.7 billion, EUR 2.5 billion), up 24 percent compared to Q1 2022.

Fresh salmon fillets achieved record prices of NOK 148 (USD 13.98, EUR 12.81) per kilogram in Q1 2023, NOK 23 (USD 2.17, EU 1.99) higher than the previous record set in Q2 2022. The average price for fresh whole salmon also reached a new high of NOK 105 (USD 9.92, EUR 9.09) per kilogram. 

Norway’s value growth continues a global trend seen throughout 2022. At the recent North Atlantic Seafood Forum (NASF) 2023 conference in Bergen, Norway, Kontali CEO Ragnar Nystøyl said a 1 percent drop in salmon production last year contributed to the record-high prices. Europe saw no growth in supply in the second half of 2022, and according to Kontali’s estimates, the region’s biomass at the start of 2023 was 2 percent lower than it was in 2022. At the same time, the total biomass in the Americas was 7 percent lower, following a decline in 2022.

Kontali projects this year’s global supply of salmon will rise by slightly less than 2 percent – thereby returning it to the level seen in 2021. Assuming there are no biological issues or unexpected events that cause a production decline, it forecasts 2023’s global production will be just over 2.9 million MT. Of this, Norway is expected to increase its production 3 percent to more than 1.5 million MT. Scotland’s harvest is projected to rise 8 percent to 183,000 MT, but Chile and Canada will experience declines of 2 percent and 5 percent, respectively, to 739,000 MT and 128,000 MT.

However, this overall year-on-year growth is dependent on an increase and improvement in productivity levels and yields in the second half of 2023, according to Nystøyl.

Other Norwegian seafood products also achieved record Q1 export prices this year. Fresh trout fillets and whole fresh trout earned NOK 143 (USD 13.52, EUR 12.38) and NOK 108 (USD 10.21, EUR 9.35) per kilogram, each setting new record-high marks.

Norway exported 10,200 MT of trout worth NOK 1.1 billion (USD 104 million, EUR 95.3 million) in Q1 2023, a volume decrease of 12 percent year-on-year, and a value increase of 18 percent. The U.S., Thailand, and Lithuania were the biggest markets for trout across the three months.

Within the whitefish category, cod also followed the record price trend, with fresh Norwegian cod fillet exports fetching an average NOK 127 (USD 12.00, EUR 11.00) per kilogram in the quarter, and fresh whole cod reaching NOK 56 (USD 5.29, EUR 4.85) per kilogram. Skrei also achieved a record high price, reaching NOK 69 (USD 6.52, EUR 5.97). 

In the period, Norway shipped 22,800 MT of fresh cod worth NOK 1.4 billion (USD 132.4 million, EUR 121.2 million), with the volume down by 12 percent, and the value rising 8 percent. Bad weather contributed to significantly lower landings of fresh cod compared to last year, especially in January and February.

However, exports of farmed cod soared by 81 percent to a total 3,000 MT. Farmed cod accounted for 13 percent of Q1 2023’s total export volume of fresh cod.

It was a weaker quarter for Norway’s frozen cod trade, with 18,600 MT of products earning NOK 1 billion (USD 94.4 million, EUR 86.5 million). Compared with Q1 2022, this volume and value were down 37 percent and 21 percent, respectively. However, the price for frozen fillets reached a new high of NOK 98 (USD 9.26, EUR 8.48) per kilogram.

Photo courtesy of the Norwegian Seafood Council