What’s going on here?

Icelandic exporters have been keen on increasing their export volumes to the US market especially when the US exhange rates are more favorable compared to the Euro and the British pound. The above table shows the difference in export volumes and prices of Atlantic cod fillets and portions exported from Iceland to the US. It's interesting to see that there has been a significant increase in volumes exported for these five main Atlantic cod products to the US. Compared to the 7 months period last year there has been an increase volumes in the range of 40-70%. Even if we discount the effects of the Icelandic fishermans unions strikes in January and February in 2017 the volume increase for the March to July period compared to last year is still 30-60%. This translates into a major shift in the market.

It is interesting to see is that the export price from Iceland is lower for these main products for the period in question year on year. Possible explanations for this are that prices were higher during the strike due to low supplies and that the exchanges rates have had an effect in the first 8 months of this year.

What does this mean?

There has been a shift in the US market when it comes to the Icelandic exports of Atlantic cod fillets and portions. The significant increase in volumes from Iceland thas put downward pressures on export prices to this market. What is even more interesting is to look at the comparative prices from Norway for fresh and frozen fillets to the US market. The prices for frozen and fresh fillets exported from Norway to the US market are 12$/kg for the frozen portions and 11.2$/kg for the fresh fillets on average for the first 7 months of 2018. At the same time the prices from Iceland for these same products are 8.56 $/kg and 10.33 $/kg respectively. The price for fresh portions from Iceland has been 11.8$/kg and is almost as high as the frozen portions from Norway.

The Icelandic exporters have increased their volumes in to the US markets and decreased their volumes to UK and France hoping for better prices in ISK partly due to the exchange rate effects. Yet the increasing volumes are putting pressues on prices in the market as exporters are targeting the same buyers and markets. Still there are some signs, as seen from the graph above, that prices are increasing month-by-month promising better times ahead.

Why should I care?

For you, personally:

It is always interesting to look a the shifts in the market. This includes both how volumes and prices develop as well as the differences between product categories and exporting countries. The US market has been the premium market for cod in recent years and is likely to remain so for the years to come. To be able stay on top and achieve prices higher than competitors and competing countries the key question to ask is if you are getting the best available price for your product. That is why continuous comparisons are needed.

The bigger picture:

Market trends are important benchmarks not only when looking at specific products and competing countries but can also serve measure impacts of other factors such as major political decisions e.g. Trump tarrifs, Brexit etc.

For more on the trade flow and market prices keep visiting seadatacenter.com. Please contact us at info@seadatacenter.com for more information.

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