W2 Salmon Update: Norwegian Fish and Seafood Exports Surge by 14% YoY in 2023, Prices are also up by 14% YoY

Norway's Thriving Fish and Seafood Industry in 2023

In 2023, Norwegian fish and seafood exports attained a record high, reaching USD 16.6 billion, denoting a significant 14% year-on-year (YoY) increase. This achievement reinforces the economic importance of fish and seafood, positioning it as Norway's second-largest export commodity after oil and gas. The surge in export value was predominantly influenced by the devaluation of the Norwegian krone and the general increase in global market prices, resulting in an increase of nearly USD 1.43 billion in export value. Despite currency challenges, the industry demonstrated resilience and global competitiveness, registering an export volume of 2.8 million metric tons (mmt) in 2023, reflecting a commendable 5% YoY growth. Salmon and cod emerged as primary contributors to this export volume, emphasizing the industry's robust position internationally. The weakened Norwegian krone (NOK) played a crucial role in enhancing the overall export value, highlighting the industry's adaptability to currency fluctuations.

Furthermore, the industry's global impact was evident in the substantial growth of exports to the Brazilian market, witnessing a 43% YoY increase by value, approximately USD 39.2 million higher than the previous year. The export volume to Brazil also experienced a significant 28% YoY surge, reaching 19.1 thousand metric tons (mt). Notably, growth was observed in the export of cod and dried salted fish, with cod exhibiting the most substantial expansion in both volume and value.

Norwegian Salmon Prices Maintain Bullish Trend at Start of 2024

Norwegian salmon prices maintained their bullish trajectory in the first week of 2024, building on the momentum of the previous year. According to the Nasdaq Salmon Index (NQSALMON), the average per-kilogram (kg) price jumped 14.44% YoY to reach USD 11.04, marking an increase of 10.72% month-on-month (MoM) and a twelve week gain of 12.25%. However, a closer look reveals a nuanced picture beyond the headline numbers. While larger salmon (3 to 7 kg) witnessed significant price hikes of 11.11% to 13.96% week-over-week (WoW), smaller segments (1 to 2 kg) saw a marginal dip (-0.12% WoW).

Currency fluctuations emerge as another potential factor impacting prices, as evidenced by analyzing export data. The Norwegian Minister of Fisheries highlighted domestic seafood consumption as a key challenge for 2024, raising questions about the source of export growth. The Norwegian Seafood Council (NSC) attributed the 2023 export value increase of 14% primarily to the weaker NOK, with growth in EUR and USD significantly lower.

Looking ahead, futures pricing offers mixed signals. Q1 2024 forecasts maintain a healthy outlook with an average price of USD 10.61/kg, while Q2 expectations dip to USD 8.45/kg. Norwegian salmon production dipped 2% YoY in 2023 but is expected to rebound 4% YoY in 2024, fueled by increased fry availability and new license utilization. Chilean production, however, faces headwinds from an El Niño event, potentially causing a 1% decline in 2024. The risk of algal blooms, historically correlated with El Niño, is particularly high in Q1 2024. Global production is projected to reach 2.95 mmt in 2024, with improved productivity and increased fry stocks in the United Kingdom (UK), Iceland, and the Faroe Islands offsetting the Chilean production dip.

Despite concerns about the global cost-of-living crisis, historical trends suggest minimal impact of economic downturns on salmon demand. If demand growth outpaces supply growth, a price increase of around 1% is expected. Norwegian salmon exports saw a 3% YoY increase in 2023, indicating consumer acceptance of current price levels and potential for further demand growth. While rising feed prices and general inflation pushed various production costs up in 2023, Costs have entered a period of relative stability. Marine raw materials remain a key cost driver, with fishmeal and fish oil prices expected to stay high in early 2024 before potentially dipping later in the year.