China begins to recover but French and US markets nosedive
NORWEGIAN exports of fresh salmon to the UK increased by 27 per cent in the last week of March, according to the Norwegian Seafood Council. And in the run up to Easter, exports to other European countries including Sweden and Finland ‘exceeded expectations’.
Norway is proving itself highly adaptable in the ongoing situation, although the closure of the restaurant segment globally remains the biggest challenge, said the Seafood Council on April 1, updating a regular coronavirus bulletin on its website.
Despite considerable uncertainty related to future demand and logistics, there was a gradual normalisation in Asian countries such as China and South Korea.
Paul Aandahl, seafood analyst at the Norwegian Seafood Council, said: ‘As in previous weeks, we are seeing a continued reduction for fresh seafood and an increase in frozen and conventional products.
‘Easter sales are about to start in earnest and fresh salmon exports to the UK and Sweden increased by 27 per cent and 52 per cent respectively last week.
‘The weak Norwegian krone continues to compensate for reduced demand. In week 13, we see a 22 per cent reduction in the value of NOK against the euro and 27 per cent measured against the US dollar.
‘While the export price to the EU for fresh whole salmon fell by 10 per cent in NOK, the price measured in euro was 27 per cent lower than last year.’
There was an overall decrease of 10 per cent in fresh whole salmon exports, but exports of fresh salmon fillet increased by five per cent and frozen fillet exports increased by 64 per cent.
The average export price for fresh whole salmon decreased by nine per cent to NOK 58.99 in week 13 (beginning March 23).
While exports to Asia decreased by eight per cent, there were some more buoyant markets, with South Korea importing 13 per cent more, and Taiwan increasing its salmon imports from Norway by 40 per cent.
Victoria Braathen, the Seafood Council’s country director in China, said there were gradual steps towards ‘a more normalised everyday life’.
‘There has been a steady growth in salmon exports to China, from 10 tonnes in week five to 519 tonnes in week 13. However, it is still 18 per cent less than the same week last year,’ she added.
The EU market, predominantly a fresh market
We expect the challenges relating to logistics and reduced demand to continue in me” the US for some ti
for Norwegian salmon, saw exports down five per cent. Exports of fresh salmon decreased by six per cent, while exports of frozen salmon increased by 51 per cent.
There was an increase in salmon exports to several individual markets in Europe – Sweden, the UK and Finland (up 34 per cent) included – but the French market continued to decline, with the export of fresh whole salmon falling 31 per cent.
‘Home consumption in France does not compensate for the closure of the restaurant market,’ said Trine Horne, the Norwegian Seafood Council’s country director in France.
‘Exports of salmon fillet to France decreased by 58 per cent in week 13 compared to the same week last year.’
Meanwhile, exports of fresh whole salmon to the US continued to fall as a result of the sharp reduction in transport capacity.
Egil Ove Sundheim, the Seafood Council’s country director in the United States, said: ‘In week 13, exports of fresh whole salmon to the United States fell by 94 per cent. This is also due to large parts of the restaurant market in the US having closed for business.
‘For fresh salmon fillet, the decrease was 41 per cent in week 13. We expect the challenges relating to logistics and reduced demand to continue here in the US for some time.’
WITH air travel bans in place, salmon farming companies in Norway are finding alternative ways of getting their product to market.
And one option has been to use passenger aircraft devoid of passengers, but which are equipped with cargo carrying holds and pallets, even if it means charging extra for salmon to cover the extra costs.
In normal times, salmon is often flown in the cargo compartments of passenger planes, for example, from Oslo to the US and Asia and from Heathrow to global markets.
According to the Oslo financial journal Finansavisen, the ploy to use empty aircraft has been adopted by Firda Seafood, one of the country’s largest salmon producers, with a turnover of more than a billion kroner.
Its founder and CEO, Ola Braanaas, told Finansavisen: ‘Yes, it does involve extra costs, but at the same time the market wants fish.
‘Our impression is that customers are prepared to accept a price increase, as long as we (the producers) share some of the added costs involved using this method.’
Avinor, the Norwegian airport operator, said Firda Seafood was not alone in using this alternative, but Martin Langaaas, Avinor’s director of air cargo, added that capacity was limited as more airlines and air freight businesses decided to ground their fleets.
He said demand for air freight space had increased sharply and so had the cost and this needed to be covered.
A spokesman for ParcelHero said freight rates for fresh foods have increased notably in recent weeks as capacity has reduced.
‘Between 45 and 50 per cent of the world’s air cargo is usually transported in the belly of passenger aircraft; but the majority of US passenger services have been suspended – it has not been possible for most British nationals to enter the USA since March 16. That means a significantly reduced amount of cargo space is available to the USA.
‘In an effort to ease demand and recoup some of the money passenger airlines are now haemorrhaging, a long list of airlines, including BA, Delta, Cathay and American Airlines, are introducing what are being termed ‘passenger freighter’ services.’
The boss of British Airways owners IAG, Willie Walsh, said: ‘Our intention is to try and keep as much of our capacity available for critical supplies that need to be shipped around the world.
‘We may operate some of our passenger aircraft just for belly-hold cargo to ensure we keep critical supplies moving.’
ParcelHero said other airlines, such as Delta, are already operating mail services from European destinations to the US using idled passenger aircraft; its Airbus A350s can carry 49 tonnes in their hold.
‘And Lufthansa has gone one better,’ said a spokesman. ‘It’s cosseting cargo not only in the hold, but on seats.
‘Lufthansa loaded an Airbus A330 passenger jet with highly urgent goods, mainly from the medical sector, strapped to its seats, on a flight recently; and is planning to operate more such flights.’