From the archives

ABOUT 300 licences for marine cod farming have been issued so far in Norway, but only approximately 50 of these have actually started to cultivate cod. Nevertheless, some important obstacles in the industry have been overcome during the last years. For example, juvenile supply is not the bottleneck it was considered to be only one or two years ago. This is both a result of higher control over the biology, but also as a result of a slightly more reluctant demand from the ongrowing side. This has, and will continue to lead to a decline in the juvenile price, in addition to an increase in the production of cod.

Due to the elimination of the juvenile bottleneck, and due to the financial status of the industry, there were too many juveniles in the market in the beginning of 2003. Following poor profitability in the salmon sector, financial institutions in Norway are in general more reluctant to finance the fish farming industry – and most farmers cannot put fish into the sea without financial backup.

Farmed versus wild caught cod There are now between 15 and 20 companies which produce cod juveniles in Norway. Of these, fewer than 10 producers have a licence to produce a million juveniles or more.

Farmed cod is predicted to find its main role in the fresh market, due to its perceived comparative advantages compared to wild caught cod. It can be supplied fresh throughout the year on a more reliable basis than wild caught cod, and usually has a shorter journey from the production plants to the market. Production methods for farmed cod can also be customised to meet specific standards or requirements such as quality or traceability.

Europe will probably be the main market for Norwegian farmed fresh cod because of its proximity to the production sites, and because of the status that it already has in this market. This is also the market for nearly all current Norwegian exports of fresh cod.

The product ‘fresh farmed cod’ is still a niche product, which can achieve higher prices than wild caught cod.

Once larger markets for farmed cod have been established, they will still face influences from wild caught cod, especially so in ‘good’ years in the cod fisheries. The main factors which affect the price of both wild caught and farmed cod are cod quotas and catches, but prices of other protein sources will also affect the cod price.

As long as cod supplies from fisheries constitute a large share of the total supply, and supplies of farmed cod exceed the volumes going to ‘pure’ niche segments, purchase prices of fresh wild caught cod will act as a guideline also for farmed cod prices.

Weekly average first hand prices in Norway for fresh wild caught cod

over 2.5kg (gutted, head off) have fluctuated between NOK 14.90 and NOK 23.80 per kg during recent years.

Supply and outlook - European wild caught cod In the Barents Sea the quota (TAC) for 2003 divided between Norway and Russia is 395,500 tonnes, the same as in year 2001 and 2002. After transfers to third countries, the two countries will have 195,500 tonnes and 183,500 tonnes respectively in year 2003. ICES recommended a catch of only 305,000 tonnes in 2003, while the corresponding recommendation for 2004 is 398,000 tonnes.

In Iceland, the quotas follow the fishing year, starting a new season every September. The quota has steadily decreased in recent years. In the 99/00 season the TAC was set at 247,000 tonnes, followed by 203,000 tonnes for 00/01, 190,000 tonnes for 01/02 and 179,000 tonnes for the current season.

However, the Marine Research Institute of Iceland has recently recommended an increased TAC for three quarters of the season of 209,000 tonnes.

In the European Community there have also been reductions during the last years. In 1999 the total EU quota for cod was 275,000 tonnes. This has steadily decreased from 246,000 tonnes in 2000, to 149,000 tonnes in 2002. For 2003 the agreed total EU quota is 122,000 tonnes. Current recommendations from scientists for 2004 are for further decreases.

The outlook in EU waters is not promising, and a complete ban has even been discussed for the Norwegian/EU managed resources in the North Sea area. However, these catches are of minor importance in terms of volume.

Though a slight recovery seems to be apparent in some zones, the supply of wild caught cod is decreasing. A fact that can be considered good news for cod farmers.