The on-going quota dispute between the Faroe Islands and Iceland on the one side and EU and Norway on the other side has grown to include herring as well as mackerel. Now the EU is threatening to impose trade restrictions on the Faroes. Meanwhile, the summer mackerel season has started well with good demand but low prices. The longer term outlook for the resources is uncertain. In the short term the mackerel stock may grow, but at the expense of herring.

Mackerel

While the mackerel quota is down from last year, researchers have reason to be optimistic about the future. According to their findings, mackerel along the Norwegian coast as far north as North Cape are feeding on large amounts of herring juveniles. Thus the mackerel stock could grow well over the next few years.

On the contrary, this could affect herring stocks negatively, although it is too early to predict, according to the researchers. Mackerel has penetrated deeper into the Norwegian fjords, and a good summer season is foreseen.

While there is mackerel all along the Norwegian coast at the moment, it is widely dispersed and difficult to catch. There are many small shoals of mackerel, but it takes considerable effort to catch large amounts. Consequently, catches in June were few and small, although some ports reported good catches. In addition large shoals of mackerel have been observed migrating eastward along the north coast of Norway, according to Norwegian fishermen.
The Faroe Is started the mackerel season early this year; instead of waiting until July, fishing this year started in May. Lower quotas were cited as the main reason.

This year the Faroes set their own mackerel quota unilaterally, contributing to the on-going controversy regarding quotas. The EU and Norway have criticised the Faroes (and Iceland) for this action, and now the EU is threatening to impose a trade embargo on the Faroes.

As a result of the unilateral quotas for mackerel set by the Faroes and Iceland, the Marine Conservation Society (MCS) removed mackerel from its list of Fish to Eat in January this year. However, Scottish fishermen argue that fish caught by them, as well as the rest of EU and Norway, are caught sustainably and come from a well-managed stock and therefore should remain on the MCS list of Fish to Eat.

There is good market demand at the moment, but supplies are tight. Cold storage holdings in Norway as well as Ireland and the Faroes are low, and this is likely to push the prices up. Mackerel prices have been declining since the beginning of the year.

Demand for smaller sizes (300 – 500g) was strong at the beginning of the summer but all sizes are in demand at the moment.

On the Japanese market, suppliers and buyers are bargaining hard to find agreement on prices. Norwegian export prices for frozen mackerel to Japan were 22.5% below prices a year ago, in spite of a significant decline in shipped volumes. A further decline in prices on this market is likely.

Norwegian mackerel exports are declining in terms of volume this year. During the first three months, exports of whole frozen mackerel were down by 19%.  During the second quarter, this trend strengthened, and for the first half of the year, Norwegian frozen mackerel exports were down by 23% compared with the first half of 2012. The average export prices were also down.  The main reasons given for the decline in Norwegian export value were lower quotas and lower prices.

China is still Norway’s largest market for frozen mackerel, but a major decline in shipments was registered for the first quarter. During this period, shipments amounted to 8 000 tonnes, down from 13 200 tonnes during the same period in 2012. There were notable declines for other markets too; exports to Turkey and Japan were down significantly, while exports to Russia registered only a minor decline and exports to Ukraine increased by 87.5% but from a low base.

Herring

The dispute between the EU and the Faroes over herring quotas is getting more serious. In June, the EU threatened to impose trade restrictions on products from the Faroes. This could effectively bar Faroese herring from entering the EU market.

The EU argues that the herring fishery operated by the Faroes is unsustainable and not well-managed because of the Faroes’ unilateral decision to increase its own quota. At the same time, the herring fishery operated by the EU and Norway is sustainable, argues the EU. This is something of a contradiction as the stock is the same in both cases, just fished by different nations.

Catches of North Sea herring were good in June, and prices were acceptable. For the matjes season large catches were landed from the North Sea, and good prices were paid for this herring. According to reports, more matjes quality herring is needed, as demand for this product is good.

At the beginning of July, some observers were expecting that the herring season would soon draw to a close. In anticipation of this, several processing plants in northern Norway had already closed down for the holidays at the end of June, in spite of the fact that further volumes of matjes herring were needed to satisfy the market. As of the end of June, about 100 000 tonnes of the total North Sea herring quota of 145 033 tonnes had been caught. Fishing in June was especially active: 64 000 tonnes were landed during this month alone.

The Alaskans are having problems negotiating with the Japanese over herring prices. In June, the price negotiations for Togiak herring were underway, and Japanese buyers were insisting that prices should come down because of the weak yen, higher supplies than last year, and weakening demand. North American suppliers are looking for USD 900 per short ton while the Japanese buyers have offered as low as USD 500 per tonne. In 2012, prices were settled at USD 1 450 per short ton.

As a result of lower landings and quotas, Norwegian herring exports declined during the first quarter of the year. The export volume went down by -40%, and the value by slightly more (-61%).  Russia was the largest market, but exports to Russia were drastically reduced (-47%), and exports to the second largest market, Ukraine, declined by -44%. In fact, there were reduced shipments to all major markets except the Netherlands.

Whole frozen herring prices are influenced by the season, with relatively stable prices from July till May, and a notable peak in June. This pattern is seen also in 2013 Norwegian exports prices. However, the peak June prices did not reach the same levels as in the previous two years.

Horse mackerel

In Chile, the horse mackerel sector has expressed concerns that the quota will be filled early, thus closing down the activity for the fleet. By mid-May, over 105 000 tonnes of the total quota of 161 600 tonnes had been landed. The South American horse mackerel landings have been seriously reduced over the years. In 2012, the Chilean horse mackerel quota was the lowest in history, at 12% lower than the 2011 quota, but  in 2013 the quota allocated to Chile was reduced further to 250 000 tonnes, 12.8% lower than the previously announced quota of 282 000 tonnes for the year.

Chile blames Peru for this development. Chile claims that Peru has overexploited this resource for years. In 1990 Chile caught 2.4 million tonnes of horse mackerel. In 2012, this had been reduced to just 229 000 tonnes. The Chilean fleet has been reduced accordingly, from 150 vessels in 1990 to 50 vessels in 2012.

Peru and China are both fishing on this resource, but neither country is a member of the Regional Fisheries Management Organization of the South West Pacific. Consequently, they do not feel bound by the decisions of the Commission, and therefore rebuilding the horse mackerel resource in the region will be very difficult, according to Chilean fisheries executives.

The market for horse mackerel is reported to be good, with relatively high prices and good demand, especially in African markets.

Anchovies

Peruvian authorities opened the northern anchovy fishery again in June. Initially the fishery was opened for ten days from 14 June but later extended until the maximum catch limit per vessels was reached or 31 July.

In Spain anchovy fishing is also the subject of debate over control measures. The Ministry of Agriculture, Food and Environment was questioned about problems in the Bay of Biscay anchovy fishery and said that the government is making great efforts to have appropriate controls for the anchovy fishery, thus ensuring its sustainability and profitability. Stricter control and inspection measures are being introduced, according to the Ministry spokesman.

Canned sardines

Morocco’s exports of sardines went up by 29% by volume in 2012. The main target markets were traditional markets in Europe of Spain, Italy, the UK and Germany.

The European canned sardine market is relatively quiet at the moment. Imports into major markets show little change. Imports into Germany increased very slightly during the first quarter of 2013, to 1 900 tonnes. Morocco took a bigger market share, reflecting the increase in Morocco’s exports of canned sardines.

Imports into the UK were also stable. During the first quarter of 2013, UK imports of canned sardines increased by only 3%. Main suppliers Portugal and Morocco saw slight increases, while imports from Thailand declined.

France, in contrast, increased imports of canned sardines during the first quarter by 43%. Again, Morocco registered a healthy increase in shipments, as did Portugal.

Prices for canned sardines on the European market were mixed over the past few months. Italian prices went up for domestic product, while they went down for imported products from France. Thus average prices were fairly flat.

The general price trend in Europe is one of slow but steady decline, though. The decline may flatten in coming months, based on performance in the last few months.

Prices of canned fish in China have increased over the past year. Prices of canned fish, including canned sardines rose by as much as 18% during the year. This is well above the average rise in the consumer price index, which rose by 4.1% during the same period. Among the reasons given for this steep price rise is the change in exchange rates for the yuan, which makes food imports more expensive.

Outlook

The outlook is still one of reduced supplies because of quota reductions. However the unilateral quota increases by Iceland and the Faroes may balance that. Nevertheless the Faroes may find it difficult to sell the extra volumes because of trade restrictions, which  could be imposed by the EU.

Mackerel prices are declining for the moment, but it is expected that they will level off as demand improves. For herring prices, the summer price peak was achieved in June, and it must be expected that prices will decline again in July and August. Prices for the rest of the year may well be under last year’s level, but the tight supplies could counteract that.