Icelandic Cod Supply Expected to Decline in 2022-2023 Further Pressuring Prices Upward

Icelandic fishing authorities have advised a total allowable catch (TAC) of 208,846 mt of cod for the next fishing year, which starts from September 2022 and ends in August 2023. This represents a decline of 6% compared to the current 2021-2022 TAC of 222,373. The reason for the decline, according to local reports, is a lower expectation for the reference cod biomass. Prices, which have been reaching new highs throughout the year, could rise further in the next months due to the tighter supply. Export values should also naturally follow.

Nonetheless, generalized inflation is already hitting consumers. Food vendors in the UK, for example, have been reported to stop offering traditional cod meals as a result of the price hikes. Demand for this product could start waning due to the inflationary pressure. Additionally, cod biomass in Iceland is expected to increase in the upcoming years, which could put a brake on price hikes.

According to data from Statistics Iceland, Iceland cod, salted or in brine, (HS code 030562) exports reached a record value of ISK 7.8 billion during the first four months of 2022, up by 24% YoY. All the increase in value was driven by a record average price of ISK 1,157/kg, which also represents an increase of 24% YoY. In terms of volume, exports during Jan-Apr 2022 totalled 7.18 million kg, down 1% vs the same period in 2021.

Source: Tridge with Statistics Iceland

The largest importer during the period, both in terms of value and volume, was Portugal, with a total value of ISK 4.3 billion and a total volume of 3.7 million kg. Portugal was followed by Spain, with a total value of ISK 2.1 billion and a total volume of 2.1 million kg. Both of these countries were the largest importers for this product in all of 2020 and 2021. Canada, which only imported 8.5 thousand kg in Jan-Apr 2021, totaled 89.8 thousand kg during Jan-Apr 2022, experiencing the largest increase in volume and value YoY outside of Portugal and Spain. Icelandic salted or in brine cod exports to Canada averaged a price of ISK 1,446/kg, the highest unitary value among the top 10 importers for this product.

In 2021, Iceland was the largest exporter of salted or in brine cod in the world, with a total value of ISK 14.71 billion or $115 million. Norway and Sweden followed, with total values of $106 million and $71 million, respectively.

A decline in Icelandic cod supply could further tighten the global market in the upcoming months. However, it is yet to be seen if a potential increase in Norwegian cod production more than offsets this decline. The latter remains a possibility after the International Council for the Exploration of the Sea recently issued new quota advice and a management plan for coastal cod, which includes a 2022 cod quota revision and increases in 2023 cod quotas for Norway.