Supply fundamentals continue to drive Norwegian cod prices close to all-time high levels

Norway exported 11,200 tonnes of fresh cod, worth NOK 648 million (€57 million), in March 2023, according to data released by the Norwegian Seafood Council (NSC). The volume was flat y-o-y over this period, while the NOK-denominated export value increased by +20.4% y-o-y. However, the EUR-denominated price increased significantly less, by +3.1% y-o-y in EUR, reflecting the relative strength of the EUR, based on the European Central Bank’s hawkish monetary stance. Norwegian cod prices continue to trend close to the all-time high levels recorded in Q3 2022.  

Various supply-side factors have contributed towards the bullish market for fresh Norwegian cod. A 20% reduction in the Barents Sea catch quota, shared between Norway and Russia, for the 2023 season had already slowed landings in the world’s largest Atlantic cod fishery. This has been compounded by poor weather conditions in the Barents Sea and poor catch conditions around Iceland and the Faroe Islands, which are other key cod suppliers.  

Macroeconomic challenges have also heavily impacted the processing industry. Denmark, Poland and the Netherlands, serve as critical hubs for importing frozen cod from Norway, manufacturing into value-added cuts and re-distributing to various channels throughout Europe. High plant costs, related mainly to surging energy prices, have forced many processors to operate at up to 25-30% below full, thus seeking to compensate for lower volume sales by raising wholesale prices. Indeed, Norwegian frozen cod exports fell by 10,924 tonnes (-37%) y-o-y during Q1 2023, to 29,524 tonnes.