Weakened krone causing seafood uncertainty in otherwise economically strong Norway

Norway’s continued increase in export value being almost entirely attributable to a weak krone is causing concern in the seafood industry, according to the Norwegian Seafood Council (NSC).

The Scandinavian country exported NOK 13.1 billion (USD 1.2 billion, EUR 1.1 billion) worth of seafood in May 2023, an increase of NOK 816 million (USD 75.7 million, EUR 70.2 million) year-over-year. NSC CEO Christian Chramer advised in a press release that the weakened krone alone was responsible for the value rising by around NOK 1.5 billion (USD 139.1 million, EUR 129 million). Without it, there would have been a decline in export value, according to Chramer

NSC’s press release also stated that when measured in euros and U.S. dollars, May’s export value fell by 8 percent and 5 percent, respectively, and that Norwegian products reached 115 countries, which is two fewer than the same month last year.

The relative strength or weakness of Norway's currency in global marketplaces has always been a significant factor in Norway's seafood export earnings. According to the Norwegian bureau Statistics Norway, the Norwegian krone weakened significantly against the euro between 2013 and 2016 due to a stronger euro and falling oil prices. Since 2016, the krone's development has not aligned with fundamental factors like oil prices.

Chramer said ongoing weakening of the krone is due to a combination of factors, including interest rate differentials, fluctuations in global oil prices, the krone being a “minor” currency that’s vulnerable to economic uncertainties, and overall market sentiment. 

Chramer told SeafoodSource that within several export-oriented industries, including the seafood sector, businesses are facing challenges due to the weak krone.

“They are raising concerns that although a low krone exchange rate can boost income through higher export revenues, it also results in increased costs for input factors. Additionally, recruiting foreign labor becomes more challenging in the face of a weakened krone,” he said. “Stability and predictability are highly desired, and significant currency fluctuations introduce uncertainty and hinder long-term planning.”

The industry is also seeing disruption in core markets, with soaring food inflation particularly affecting Europe – Norway’s top destination for products.

Chramer said economic development in many of Norwegian seafood’s important European markets is ... 

Photo courtesy of the Norwegian Seafood Council