In the second quarter of the year, very limited raw material was available from last season. Margins on herring increased during this period. Prices tended upward. Production went up in September as still plenty of quotas were available.

Low herring catches and high prices characterise herring market

In the second quarter of 2009, Norwegian production of whole frozen herring was 9 000 tonnes, sharply down from the 26 000 tonnes produced in the same period of 2008. Herring fillets production was also lower in the second quarter of 2009: 24 000 tonnes, 25% less than one year earlier. This decline in production was due to little raw material available. Norwegian herring production is based on the catch of North Sea herring, which had low priority this season. Due to the shortage margins increased to 1.63 up from 1.5 in the second quarter of 2008.

Net sales of herring increased to Russia. Some 98 million NOK were sold to this country in the second quarter of 2009, up from 60 million NOK in the corresponding period of 2008. This was mainly due to sales of contract stored products. Also net sales more than doubled to the EU. The only area reporting lower sales of Norwegian herring were non-EU countries. This decline was due to a preference for capelin. These increases were realized in spite of volumes being more or less equal to the previous year, which indicates that prices went up impressively.

Africa is back as an interesting client of frozen herring. Here mainly small sized fish is sold, which is later processed in the traditional way.

Exports of Norwegian frozen whole herring increased in volume by 52% from 322 800 tonnes in 2006 to 491 500 in 2008, averaging a 23% year-on-year growth. Total January - June figures for 2009 were similar to 2008, with the principle markets remaining as the Russian Federation, Nigeria and Ukraine. Exports to the Russian Federation increased by 11,000 tonnes from 73,000 tonnes to 83,900 tonnes, an increase of 15%, while exports to Nigeria fell 8,000 tonnes from 85,000 tonnes to 76,700 tonnes, a drop of 1.0%. Exports to Ukraine decreased by 2,600 tonnes (-3%) from 46,000 tonnes to 44,400 tonnes.

Japanese imports of herring declined sharply in 2009. 95% of imports are roe herring, mainly coming from USA and Russia. While imports from the USA were about stable in 2009, Russian exports declined sharply. Norway is mainly supplying herring for feeding, but also for this product, imports were lower in 2009. Russia reported sharp declines also in exports of herring for feeding.

Between 2006 and 2008, German imports of frozen herring fell by 15% from 35 700 tonnes to 30 200 tonnes, but experienced an increase in 2007 to 38 400 tonnes. The first half of 2009 saw imports up by 7% overall, with a rise of 2,000 tonnes from 27,000 tonnes to 29,000 tonnes.

Norway was the principle source of frozen herring for Germany and saw volumes rise by 92% from 9,700 tonnes to 18,600 tonnes. Supplies from Denmark fell by 74% from 7,800 tonnes down to 2,000 tonnes. There were also falls in imports from the Netherlands (-29%) and Canada (-32%), and drops of a few hundred tonnes from the UK and Ireland. Supplies from other countries combined were up from 1,700 tonnes to 3,900 tonnes.


Market outlook very positive

Strong demand and consumption in Russia and Eastern Europe will be the main driver for sales of herring in the top season. Underlying consumption is strong, but financial stability and access of capital will have great importance for ability to put great volumes into the markets. Herring is still traditional food and is regarded as some of the cheapest proteins available. The transition to more herring fillets continues.
 

Authors: Nicki Holmyard EUROFISH and Helga Josupeit GLOBEFISH