""

Required Report - public distribution

**Date:** 11/24/2003

**GAIN Report Number:** NO3003

NO3003

**Norway**

**Fishery Products**

**Annual**

**2003**

**Approved by:**

![](media/image1.wmf)Lana Bennett, Agricultural Counselor

U.S. Embassy, Stockholm

**Prepared by:**

Asle Johansen, Agricultural Specialist

**Report Highlights:**

The total catch of fish was the highest since 1998 and the production of
farm-raised salmon was the highest ever in Norway. However, low world
market prices have caused problems for the Norwegian fish farming and
processing industries.

Includes PSD Changes: No

Includes Trade Matrix: No

Annual Report

Stockholm \[SW1\]

\[NO\]

Table of Contents

[**Executive Summary 3**](#executive-summary)

[Production 3](#production)

[Cod resources and quotas 4](#cod-resources-and-quotas)

[Haddock resources and quotas 5](#haddock-resources-and-quotas)

[Saithe catches and resources 5](#saithe-catches-and-resources)

[Structure of Norwegian seafood industry
5](#structure-of-norwegian-seafood-industry)

[Salmon production 5](#salmon-production)

[Production cost and sales prices 7](#production-cost-and-sales-prices)

[Consumption 7](#consumption)

[Trade 8](#trade)

[Trade General 8](#trade-general)

[Trade trends white fish 10](#trade-trends-white-fish)

[Cod products 10](#cod-products)

[Haddock products 10](#haddock-products)

[Saithe Products 11](#saithe-products)

[Trade trends for Salmon 12](#trade-trends-for-salmon)

[EU-Norway Salmon Agreement 14](#eu-norway-salmon-agreement)

[Factors Affecting U.S. trade 14](#factors-affecting-u.s.-trade)

[Norwegian Import Market for Seafood
15](#norwegian-import-market-for-seafood)

# Executive Summary

According to the Norwegian Seafood Export Council, Norway\'s exports of
seafood amounted to NOK 28.7 billion (US\$ 3.5 billion) in 2002. This is
down NOK 2 billion (US\$ 250 million) or 6.5 percent from last year, and
down for the second year in a row. About 38 percent of the exported fish
were salmon and trout, up 2 percent from the previous year, while white
fish accounted for 28 percent of exports and pelagic fish for 22
percent. Japan is still the largest single country market for Norwegian
seafood exports. Presently, fish is Norway's second largest export
product after gas and oil.

Overall salmon exports in volume increased in 2002, and reached 361,000
MT (product weight) for a value of NOK 9.5 billion (US \$1.18 billion).
This is the highest-ever volume of salmon exported from Norway. While
export volume was up by 6.6 percent, value dropped by 5 percent. Of the
total of 361,000 MT of salmon exported from Norway in 2002, 276,000 MT
(76.5 percent) was fresh whole salmon. The EU market accounted for 78
percent of this trade. Exports to the U.S. amounted to 48,500 MT for a
value of NOK 1,293 million (US \$163 million).

Norway\'s total catch of wild fish in 2002, amounted to about NOK 11
billion (US\$ 1.4 billion) in first hand value, which is slightly down
from 2001. However, in volume the catch totaled 2.7 MMT, which was 1 MMT
higher than in 2001. The trend of a lower catch of groundfish and
increased catch of pelagic fish continued in 2002. Several important
fish stocks still need protection and strong regulatory measures to come
within biologically safe limits. The demersal stock is, in general, in a
worse state than the pelagic stock. Catches of cod, haddock and saithe
in 2002 totaled 482,000 MT, an increase of 13 percent from the previous
year, mainly due to an increased catch of saithe.

After a decrease for the first time in 10 years in 2001, production of
farmed salmon increased by 8 percent in 2002 and totaled 444,000 MT.
Production in 2003 is expected to be about the same or slightly less due
to lower world market prices. According to Norwegian calculations,
Norway accounts for about 42 percent of total world sales of Atlantic
salmon. However, Norwegian production could easily be doubled if the
demand was larger. At present, Norwegian production is regulated by a
feeding quota implemented by Norway to satisfy the European Union in its
effort to stabilize production prices in its internal market. The
feeding quota, implemented in Norway in 1996 to resolve its dispute with
the EU over salmon export volumes, will continue both in 2003 and 2004,
but will be abolished beginning January 1, 2005. Norway's agreement with
the EU regarding minimum export prices for sales of Norwegian salmon to
the EU was discontinued in June 2003. The average production cost for
salmon in 2002 increased slightly due to higher feed costs to NOK 16.06
(US \$2.00) per kilo, while the average export price for fresh whole
salmon was NOK 23.34 (US \$2.92) per kilo.

# Production

Catches and Resources

Norway's total catch of fish increased from 2001 to 2002, reaching its
highest level since 1998. The total catch reached 2.731 MMT tons in 2002
for a value of NOK 11.0 billion (US \$1.4 billion). Large increases in
the catch of saithe and capelin especially contributed to the increase.
Catches of the main species (cod, haddock and saithe) totaled 482,000 MT
in 2002, an increase of 13 percent from the previous year.

The disposition of landings was changed little from 2001. In 2002, about
38 percent went to the frozen fish market and 44 percent for meal and
oil, while only 8 percent was sold as fresh fish. Six years ago, only 21
percent of the catch went to the frozen market while 29 percent was sold
as fresh fish.

According to the Norwegian Institute of Marine Research, several
important fish stocks still need protection and strong regulatory
measures in the Northeast Atlantic to come within biologically safe
limits. The demersal stocks in general are still in a worse state than
the pelagic stocks. A minor increase in the spawning stock biomass (SSB)
of Northeast Arctic cod has been observed. However, the improvement
predicted for 2003 is now not expected to be realized until perhaps in
2004. While the SSB for haddock is in balance with demand, and could
increase, the SSB for saithe is still within safe limits.

  ----------------------------- ------------- ------------- -------------
  Total catches and disposition                             
  of landings round weight:                                 

                                Quantities in               
                                metric tons                 

                                2001          2002          est. 2003

  Total catches                 2,646,000     2,731,000     2,630,000

                                                            

  Main disposition:                                         

  Fresh                         182,000       213,000       200,000

  Mince fish,roe and frozen     1,182,000     1,046,000     1,000,000

  Dried                         25,000        32,000        25,000

  Salted                        211,000       238,000       200,000

  Semi canning                  3,000         4,000         4,000

  Meal oil for animal feed      1,127,000     1,197,000     1,200,000

  Bait and other                1,000         0             1,000

  Source: Directorates of                                   
  Fisheries                                                 
  ----------------------------- ------------- ------------- -------------

  ------------------- ------------ ------------ ------------ ------------
  Total catches of                                           
  the main groundfish                                        
  reported:                                                  

                      Metric tons                            
                      round weight                           

                      2000         2001         2002         est. 2003

  Cod                 220,000      207,000      227,000      200,000

  Haddock             45,900       52,000       54,000       56,000

  Saithe              169,300      168,000      201,000      180,000

                                                             

  Total               435,200      427,000      482,000      436,000
  ------------------- ------------ ------------ ------------ ------------

## Cod resources and quotas

For 2002, the International Council for Exploration of the Sea (ICES)
recommended an overall Northeast arctic cod quota of no more than
181,000 MT. However, the Russian/Norwegian Fishing Commission continued
to ignore ICES recommendations and set the quota at 395,000 MT,
including 40,000 MT of coastal Norwegian cod. In the Russia/Norway
negotiations, third countries were given a quota of 55,900 MT, of which
15,800 MT was to be caught around Svalbard. Norway's quota is 195,550 MT
and Russia's is 183,550 MT.

The total catch of cod in 2002 is reported to have been approximately
430,000 MT, not including Norwegian coastal cod. The Norwegian catch,
including costal cod, was reported at 227,000 MT, which was 10 percent
higher than in 2001. According to the Norwegian Marine Research
Institute North-East Arctic cod stock was estimated to be around 1.3 MMT
in 2002, compared with 1.2 MMT in 2001. The spawning stock biomass was
estimated at 430,000 MT for the year 2003. The current spawning stock
biomass is below biologically sustainable units and the exploitation
rate is over biologically safe limits. Nevertheless, the
Russian/Norwegian Fishing Commission set the 2003 quotas at levels
identical to those in 2002 \-- 395,000 MT, including 40,000 MT of
coastal Norwegian cod.

## Haddock resources and quotas

For the year 2002, the Russian/Norwegian Fishing Commission agreed on
haddock quota levels and allocations identical to those in 2001.
Russia's quota was 25,400 MT and Norway's quota was 56,300 MT, including
costal haddock. Third countries were given a 4,400 MT quota.

According to official statistics, the total haddock catch under the
agreement amounted to 85,000 MT in 2002. The Norwegian catch of haddock
in 2002 amounted to 54,000 MT, which was within the country's limit.
Strong immature cod populations spawned in 1999 and 2000 seem to
dominate the stock. As a result it is possible for Norway to increase
its catch by 20 percent from 85,000 MT to 101,000 MT.

## Saithe catches and resources

The Norwegian saithe catch is divided between the North Arctic stock and
the North Sea stock. According to the Norwegian Marine Research
Institute, the stock of North Arctic saithe has registered an increase.
The ICES recommended a total quota of 152,000 MT for 2002 for North
Arctic Saithe. However, during the year this quota was increased by the
Norwegian Ministry of Fisheries to 162,000 MT. In addition, according to
the Norwegian/EU agreement, Norway's total quota of North Sea and
Skagerak saithe for 2002 was 66,000 MT. For 2003, a quota of 85,800 MT
was allocated to Norway. This entire quota can be fished in the EU zone.
In 2001, total Norwegian catches of saithe reached 201,000 MT.

## Structure of Norwegian seafood industry

Currently, Norway has a fishing fleet of about 12,000 vessels employing
19,000 fishermen. About 72 percent of all fishermen report fishing to be
their main occupation. The fishing industry has 581 processing plants,
which employ about 13,500 workers. Fish farming licenses totaled
approximately 2,575 and this industry accounts for about 4,500
employees.

## Salmon production

Total Norwegian production of salmon increased in 2002, after suffering
its first decrease in 10 years during 2001. The 2002 increase was 8
percent over the 2001 production levels, and was the highest ever.
Salmon is still the most important farmed \"animal\" in Norway. However,
increased production of Norwegian rainbow trout might have an affect on
the overall market. In 2002, production of salmon amounted to 444,000 MT
round weight, and the production of trout was 77,000 MT, an increase of
17 percent for trout from 2001. The production of salmon per man-year in
Norway has increased from 58 MT in 1990 to 351 MT in 2002. However,
while the profit for Norwegian fish farmers, according to Directorate of
Fisheries, was a record NOK 4 billion (US \$444 million) in 2000, profit
for 2001 was calculated at NOK 99 million (US \$11 million), and the
industry recorded a loss of NOK 1.4 Billion in 2002. This precipitous
decline in profitability is attributed to a crash in world market prices
for salmon.

Limitations, imposed by government regulation, on the amount of feed
given to farm raised fish has helped regulate production. For example,
feed use for salmon, which decreased from about 625,000 MT in 2000 to
about 588,000 MT in 2001. This correlated to reduced production in 2001.
Feed use increased by 6 percent in 2002. The total sale of feed to the
fish farmers producing both salmon and trout was reportedly 733,000 MT
in 2002, which correlated to increased production in 2002.

Another factor, which is important for the Norwegian fish farmers is the
amount of smolt used. While, in 1993, 63 million smolt were used by the
industry, the number increased to 133 million in 2001, and reached 137
million in 2002. It is not expected that smolt stock for the next two
years will increase. However, in August 2003, the Ministry of Fisheries,
decided that the feed quotas for salmon would be abolished starting on
January 1, 2005. After that date, fish farmers will be able to feed
their fish as they like. Some concern has been expressed about this
leading to a futher rapid depression in salmon prices as over-production
becomes more likely.

The 444,000 MT Norwegian production of Atlantic salmon represented a
reduced share of world production in 2002 to 42 percent. It is unlikely
that Norway will recapture the market share it had in the 1990\'s of
50-55 percent. The approximately 840 Norwegian salmon fish farm
concessions in operation provided employment amounting to about 2,200
man-years.

Norwegian Salmon production and disposals in 1,000 MT.

  -------------------------------- -------- -------- --------- -----------
                                   2000     2001     2002      est.2003

  Total production (round weight)  437      411      444       435

                                                               

  Total export (product weight)    344      337      361       350

                                                               

  Total consumption (product       14       15       15        15
  weight)                                                      
  -------------------------------- -------- -------- --------- -----------

##  

## Production cost and sales prices

The table below provides an overview of production costs in the fish
farming industry for the last four years compared with round weight
export prices obtained by Norway for fresh salmon. This data was sourced
from the Directorate of Fisheries. It is important to note that freight
and interest on capital are not included, but for 2001 and 2002 the
slaughtering costs are included.

Salmon, fresh production cost per kilo and avg. export price in NOK per
kilo

  -------------------------- ----------- ----------- ----------- -----------
  Salmon, fresh ‑ production                                     
  costs per kilo and                                             
  avg.export price                                               

                             1999        2000        2001        2002

  Smolt cost                 2.44        2.37        2.16        1.97

  Feed cost                  8.48        7.99        7.92        8.98

  Insurance                  0.27        0.25        0.36        0.29

  Wages                      1.49        1.54        1.42        1.31

  Other operating costs      2.61        3.05        2.69        2.69

  Net interest costs         0.81        0.46        0.43        0.82

  Total production cost      16.10       15.66       14.98       16.06

  Slaughtering cost                                  2.46        2.49

                                                                 

  Average export price       27.95       30.65       22.08       23.34
  -------------------------- ----------- ----------- ----------- -----------

In 2001, the cost of production was the lowest ever. However, in 2002
production costs per kilo of fish increased about 7 percent. The lowest
average production cost per kilo is realized in the middle of Norway,
while the highest cost is in the counties in the north. The disparity
between farms is large, as production costs could be as low as NOK 11
per kilo for some, but as high as NOK 30 per kilo for others. According
to the data from the Directorate of Fisheries, smolt costs continue to
drop, while feed costs increased considerably in 2002 (12.5 percent).

## 

# Consumption

The Norwegian Seafood Export Council, which is responsible for the
generic marketing of Norwegian fish and seafood products, began research
on Norwegian consumption of fish in 1994. In 1995, private consumption
was about 58,500 MT. Currently, it is about 85,300 MT including 10,000
MT of private catch. This figure, however, does not include consumption
in the hotel, restaurant and institution (HRI) sector, which is
estimated at 15,000 metric tons per year. In total, the average annual
per capita consumption of fish in Norway was about 22 kilos in 2002. Of
this amount, approximately 17.5 kilos per capita of consumed fish was
purchased from commercial outlets.

Consumption of seafood is reportedly increasing in urban areas. Grocery
retail chains account for 85 percent of total fish sales in Norway, and
the trend is toward even higher market shares in the future. The larger
grocery retailers are expanding the availability of fresh fish in their
stores to attract health-conscious consumers.

In 2002, the Norwegian Seafood Export Council spent about NOK 10 million
(US\$ 1.25 million) out of a total marketing budget of NOK 196 million
(US\$ 24.5 million) in their efforts to promote fish in the domestic
market. It is distributing brochures, participating in small fairs and
festivals, and supporting TV commercials. Several fish promotion
programs were launched targeting the younger generation by supporting
the use of fish in school meals and cooking lessons.

## 

# Trade

## 

## Trade General

Total Norwegian fish exports in 2002 amounted to more than NOK 28.7
billion (US \$3.5 billion), down NOK 2 billion (US \$250 million) from
2001 or 6.5 percent. Of this amount, farmed salmon accounted for NOK 9.5
billion (US \$1.19 billion), down 4.7 percent from 2001. Pelagic fish
accounted for exports of NOK 6.2 billion (US \$775 million), and exports
of white fish (except klip fish, salted fish and dried fish) totalled
NOK 3.8 billion (US \$475 million). Total export volume of seafood from
Norway in 2002 amounted to 2.1 MMT, which was 100,000 MT more than in
2001. While the export volume increased, the value dropped as a result
of the strong Norwegian Kroner and increased production costs.

The Norwegian Seafood Export Council, which was established in 1991 by
the Ministry of Fisheries is situated in Tromsø. Its board consists of
seven members representing exporters, producers, fish farmers and the
Ministry of Fisheries. The main marketing strategy of the Norwegian
Seafood Export Council is generic promotion of fish products both
domestically and internationally. It also has the authority to approve
Norwegian exporters and assure that they follow prescribed rules and
regulations. In 2002, there were 536 approved Norwegian exporters, which
supplied 2,000 products to more than 130 countries. It is important to
note that the Norwegian Seafood Export Council is involved only in
generic promotion. Exporters are informed in advance about dates and
countries in which an activity is planned and can take advantage of
these promotions in marketing their brands. The Norwegian Seafood Export
Council is also an advisory agency for the Ministry of Fisheries on
questions associated with seafood exports.

The Council's original marketing budget for 2002 was cut by 42 percent
after it had received its largest-ever budget in 2001. The total 2002
marketing budget was NOK 196 million (US \$24.5 million). Of this
amount, NOK 10 million (US \$1.25 million) was designated for use in the
domestic market, and the balance was to be used to promote exports. The
reason for the drastic cut was an expected reduction in export fees for
export of salmon to EU. However, this fee was not discontinued until May
2003, and the surplus was used to strengthen the Council's capital.

  -------------------------- ----------- ----------- ----------- -----------
  FISHING TRADE (million                                         
  US\$):                                                         

                             1999        2000        2001        2002

  Total Imports (CIF)        457         434         475         475

  Total Exports (FOB)        3,759       3,454       3,292       3,586

  Trade Balance              3,302       3,020       2,817       3,150

                                                                 

  Total Imports from U.S.    30.7        28.8        38.6        28.6

  Total Exports to U.S.      171.3       146.5       117.1       162

  Trade Balance w/U.S.       140.6       117.7       78.5        133.4

                                                                 

  Pct. Imports from U.S.     6.7%        6.6%        8.1%        6.6%

  Pct Exports to U.S.        4.6%        4.4%        3.6%        4.5%
  -------------------------- ----------- ----------- ----------- -----------

The EU is by far the most important market for Norwegian fish exporters.
In 2002, the EU accounted for 54 percent of total export value. Among
the single country markets in the world, Japan (12.8%), Denmark (10.3%),
France (10.3%), and the United Kingdom (7.0%) were the most important
destinations for Norwegian seafood. However, Russia has drastically
increased its imports from Norway and now has a market share of 6.3
percent.

Salmon and cod are the most important species exported, together
accounting for 51.3 percent of total export value in 2002. Norwegian
salmon alone represented 33 percent of total export value and was
shipped to more than 50 countries.

The Norwegian total exports of fish in tons and U.S \$ in product
weight.

  ----------- ------------- ------------- -- -------------- ---------------
              Metric tons                    Value US\$     
                                             MILL           

              2001          2002             2001           2002

  Total       2,031,389     2,109,323        3,406          3,586

                                                            

  EU          903,556       973,859          1,885          1,934

  Japan       258,170       251,620          456            459

  Denmark     296,721       380,732          336            368

  France      91,000        89,679           259            272

  Germany     69,920        72,975           162            174

  Great B.    135,607       128,637          245            252

  Sweden      60,186        59,799           186            188

  Portugal    44,655        50,353           207            217

  Russia      207,430       236,589          165            225

  Italy       27,444        26,678           156            140

  USA         28,374        48,558           124            162

  rate 1                                                    
  US\$=NOK                                                  
  9.00 in                                                   
  2001, NOK                                                 
  8.00 in                                                   
  2002                                                      

  Export of                                                 
  total fish                                                
  per species                                               

              Metric tons                    Value US\$     
                                             (millions)     

              2001          2002             2001           2002

  Total       2,031,389     2,109,323        3,406          3,586

                                                            

  Salmon      337,586       361,046          1,110          1,193

  Trout       44,371        62,016           120            170

  Cod         128,223       139,540          626            648

  Saithe      83,327        80,266           155            164

  Haddock     32,959        35,306           91             96

  Herring     516,802       470,776          378            347

  Mackerel    329,934       295,777          326            335

  Prawn       34,026        31,865           135            121

  Other       524,161       632,731          465            512
  ----------- ------------- ------------- -- -------------- ---------------

## 

## Trade trends white fish

According to the Norwegian Seafood Export Council, exports of fresh and
frozen white fish amounted to NOK 3.8 billion (US\$ 475 million) in
2002, which is about the same as in 2001. The export of frozen filets
was reduced by 11 percent and the exports of fresh whole white fish were
reduced by 15.5 percent in 2002. However, exports of frozen whole white
fish increased by 20.5 percent. In tonnage, the most positive export
product for Norway was frozen whole fish, which increased by 37 percent
to 70,000 MT. The main markets for Norwegian white fish are the UK,
Denmark, France, the U.S. and Sweden. The marketing of Norwegian white
fish is concentrated around cod, saithe and haddock, which comprise more
than 90 percent of the country's white fish exports.

## Cod products

The total export value of cod products from Norway in 2002 was NOK 5.2
billion (US \$648billion). Cod products accounted for about 18 percent
of total Norwegian fish exports, which is unchanged from 2001.

The export volume of Norwegian cod in 2002 increased for the first time
in six years, although the increase was only about 14,000 MT. Most of
this increase is due to strong upswings in the export of round frozen
cod especially to countries like Portugal, Canada and China. While
volumes increased, export value in Norwegian Kroner remained relatively
unchanged. Of the different products exported, frozen filets and
klipfish contributed the most to the value of exports.

  ----------------- ---------- ---------- ---------- -- --------- --------- ---------
  Export of main                                                            
  Cod products from                                                         
  Norway 2000‑2002                                                          

                                                                            

                               Metric                             Value     
                               tons                               US\$ 1000 

                    2000       2001       2002          2000      2001      2002

  Fresh             20,500     17,569     18,137        48,556    49,315    49,170

  Round frozen      21,800     13,903     27,495        47,889    32,100    61,129

  Frozen            41,000     30,624     27,959        195,555   149,119   149,467
  filet/block                                                               

  Salted            25,500     27,682     24,582        99,445    116,910   103,077

  Klipfish          32,000     32,481     33,258        196,444   207,048   200,882

  Dried fish        6,257      3,630      3,407         67,444    56,656    52,158

  Others                                  4,702                             31,664

  Sum product       147,057    125,889    139,540       655,333   611,148   647,547
  weight                                                                    
  ----------------- ---------- ---------- ---------- -- --------- --------- ---------

1 US\$ equal: NOK 9.00 in 2000 and 2001 and NOK 8.00 in 2002.

## Haddock products

There has been little change in Norway's total exports of haddock, which
in 2002 amounted to 35,300 MT. Almost all fresh haddock was exported to
the EU, where Denmark and the United Kingdom were the largest buyers.
The U.S. is Norway's second largest customer for frozen haddock and
haddock filets after the UK. In 2002, the U.S. imported about 5,700 tons
of frozen haddock from Norway with a large increase of 54 percent
registered in the export of round frozen haddock to the U.S. market. The
reason for the increase seems to have been a drop in the Norwegian
market for all type of haddock products in 2002.

Main Norwegian Exports of haddock products 1999‑2001

  ------------------- --------- --------- --------- -- -------- -------- --------
  Export of main                                                         
  Haddock products                                                       
  from Norway                                                            
  2000‑2002                                                              

                                Metric                          Value    
                                tons                            US\$     
                                                                1000     

                      2000      2001      2002         2000     2001     2002

                                                                         

  Fresh               12,200    12,918    11,381       23,334   29,352   22,324

  Round frozen        12,700    12,755    16,223       29,055   26,006   35,283

  Frozen filet/block  8,400     7,462     6,659        40,177   34,166   34,194

  Others                                  1,042                          4,521

  Sum product weight  33,300    33,135    35,305       92,566   89,524   96,322

                                                                         
  ------------------- --------- --------- --------- -- -------- -------- --------

1 US\$ equal: NOK 9.00 in 2000 and 2001 and NOK 8.00 in 2002.

## Saithe Products

In 2002, saithe exports only slightly changed from 2001 in terms of
total volume and value. Denmark is the largest importer of fresh saithe,
while Germany is the largest consumer of frozen saithe. For klip fish
exports the main markets are Portugal and Brazil. Brazil in particular
is shifting its klip fish demand from cod to saithe, which is a cheaper
alternative. Today, klip fish from saithe accounts for about 50 percent,
and cod only for about 20 percent, of the Brazilian market.

Main Norwegian Exports of Saithe 1999-2001

  ----------------- --------- --------- --------- -- --------- --------- ---------
  Export of main                                                         
  Saithe products                                                        
  from Norway                                                            
  2000‑2002                                                              

                              Metric                           Value US  
                              tons                             \$1,000   

                    2000      2001      2002         2000      2001      2002

                                                                         

  Fresh             20,600    20,713    14,434       16,488    21,472    12,246

  Frozen filet      17,800    15,382    13,061       36,500    36,288    33,503

  Klipfish          27,700    29,525    30,258       65,800    73,517    83,104

  Other             17,050    17,707    22,513       26,646    13,750    34,968

                                                                         

  Sum product       83,150    83,327    80,266       145,434   145,027   163,821
  weight                                                                 
  ----------------- --------- --------- --------- -- --------- --------- ---------

1 US\$ equal: NOK 9.00 in 2000 and 2001 and NOK 8.00 in 2002.

## Trade trends for Salmon

Norway\'s total salmon exports in 2002 amounted to 361,000 MT in product
weight with a value of NOK 9.5 billion (US \$1.18 billion) compared with
337,000 MT valued at NOK 9.99 billion (US \$1.11billion) in 2001. The
2002 exported volume was the highest ever for salmon from Norway, with
an increase in exported volume from 2001 of 6.6 percent. The total
value, however, dropped by about 5 percent in terms of Norwegian Kroner.
This related to the strong Norwegian Kroner which, in 2002, strengthened
against the Euro, US\$ and Japanese Yen, as well as increased
competition due to overall increased production of farmed salmon. Of the
total salmon export volume, 78 percent was fresh salmon (filet or
whole), 21 percent was frozen salmon and only about 1 percent was smoked
salmon. However, the United States was Norway's largest importer of
smoked salmon in 2002, although the amount was only about 1,510 MT.

In 2002, Norwegian exports to the EU increased slightly in volume from
2001. Norway had in 2002 a market share in the EU in terms of by volume
of 63 percent, of all salmon products. However, the most important
product in the EU is fresh whole salmon where the market share of
Norwegian exports was almost 80 percent in 2002. France, Denmark and
Germany are by far the most important importers in Europe. Denmark
serves as a processor, rather than a consumer of Norwegian salmon. Aside
from the EU, Japan is the largest market for Norwegian salmon, and
imported about 34,000 MT of fresh and frozen salmon in 2002.

  --------------- --------- -------- ----------- ----------- ----------- -----------
  Norwegian                                                              
  salmon, fresh                                                          
  (whole or                                                              
  eviscerated)                                                           
  export                                                                 

                  1998               1999        2000        2001        2002

  Germany         18,936             19,438      18,102      18,679      19,691

  Denmark         59,758             59,147      73,823      60,055      60,663

  Spain           12,934             17,854      15,099      14,751      18,093

  France          46,153             47,780      47,318      45,527      49,360

  Japan           16,561             21,660      25,031      26,734      23,801

  Italy           10,273             9,495       9,723       10,038      9,786

  United Kingdom  9,780              14,435      11,186      9,793       11,157

  Sweden          11,346             13,315      13,776      13,944      12,725

  Belgium         6,277              6,290       6,321       5,159       4,559

  United States   123                711         704         826         1,300

  Other           29,554             42,448      45,168      55,022      64,917

                                                                         

  Total           221,695            252,573     266,251     260,528     276,052

                                                                         

  Norwegian                                                              
  salmon, bred                                                           
  frozen whole,                                                          
  export.                                                                

                  Metric                                                 
                  tons,                                                  
                  product                                                
                  weight                                                 

                  1998      1999                 2000        2001        2002

  Japan           2,854     6,612                4,508       1,461       3,379

  Russia          6,106     3,958                5,051       10,052      14,220

  Denmark         1,181     329                  581         344         315

  France          994       859                  652         454         412

  United states   1,385     2,572                3,027       2,297       2,756

  Other           11,443    15,335               14,760      16,456      18,449

                                                                         

  Total           23,963    29,665               28,579      31,064      39,531
  --------------- --------- -------- ----------- ----------- ----------- -----------

  --------------- --------- ----------- ----------- ----------- -----------
  Norwegian                                                     
  salmon filet                                                  
  export (fresh                                                 
  and frozen)                                                   

                  Metric                                        
                  tons,                                         
                  product                                       
                  weight                                        

                  1998      1999        2000        2001        2002

  Germany         4,991     5,629       5,589       4,978       6,812

  Japan           2,839     5,735       5,897       7,208       6,939

  France          4,442     5,183       5,200       4,789       6,010

  Denmark         3,945     3,018       2,001       2,224       1,663

  United States   1,544     7,042       5,242       3,683       4,523

  Other           7,739     9,825       10,075      10,811      14,063

  Total           25,500    36,432      34,004      33,693      40,010
  --------------- --------- ----------- ----------- ----------- -----------

##  EU-Norway Salmon Agreement

On June 1, 1997, the European Commission approved a five-year salmon
agreement between Norway and the EU. By agreeing to impose minimum
prices and restrictions on fresh salmon exports to the EU, Norway
succeeded in avoiding antidumping duties called for by the Commission
based on complaints from Scotland.

The main elements of this agreement were:

Export duty: The export duty on Norwegian salmon was increased from 0.75
percent to 3 percent. The export duty is collected by the Norwegian
government and used for generic promotion.

Export quantity ceilings: Ceilings were established for Norwegian
exports with an 11 percent maximum increase in 1997, and maximum
increases of 10 percent yearly from 1998 to 2002. If exporters increase
their sales to the EU by more than 10 percent yearly, a 6 percent duty
will be charged.

Export price: The minimum export price for fresh salmon was set at an
average of 3.25 ECU/kg per quarter. A floor export price of 2.86 ECU/kg
was also negotiated which can be effected under special circumstances.

In the years 1997 to 2000, Norwegian exporters benefited greatly from
the salmon agreement with EU, which in 2000, resulted in the highest
profit ever for Norwegian salmon farmers. However, when competition grew
and the world market price fell below the minimum prices, Norwegian
exporters had problems competing. Several Norwegian exporters where
convicted of cheating an import price and have been assessed penalties
of 12-15 percent on their salmon exports to the EU. Norway held
discussions with the EU regarding the minimum pricing agreement, which
was extended further to May 2003. The EU ultimately decided not to renew
the agreement with a consequent fall in prices that has negatively
impacted Norwegian fish farmers. Salmon prices in the EU market are
below NOK 20 (US \$2.50) per kilo, lower than the cost of production.

## Factors Affecting U.S. trade

In 2002, exports of fish from Norway to the U.S. increased from the
previous year both in terms of volume and value. This was especially
true for exports of cod and haddock filets, as well as salmon filets,
including fresh, frozen and smoked salmon. This increase came in spite
of the stronger Norwegian Kroner. In the U.S. market, Norwegian salmon
cannot compete in price with salmon from Chile and Canada, but Norway
has managed to secure a niche market for some of its products. Norwegian
exporters are adjusting to U.S. consumer preferences by supplying the
market with fish in a filleted and ready-to-eat form. In 2002, the U.S.
was ranked as the ninth-largest market for Norwegian seafood, which was
up two places from the previous year. Although the U.S. accounted for
less than 4.5 percent of Norway's total exports, Norway views the U.S.
market as the market with the largest potential. In 2002, the Norwegian
Seafood Export Council spent about US \$580,000 for marketing activities
to promote Norwegian fish in the U.S., about one-third of the amount
spent in 2001, which due to a cut in the Council's overall marketing
budget. Norwegian seafood exports to the U.S. are mainly targeted to the
hotel, restaurant and institutional market rather than the U.S.
household. Despite an increase of 16 percent in the export value of
Norwegian seafood to the U.S. in 2002, the Norwegian Seafood Export
Council decided to close down its export office in Boston. This seems to
be due to a severe cut in the marketing budget in the coming years due
to reduced domestic export fees.

Main Norwegian Export of Fish Products to the U.S.

  -------------------- ----------- -------- -------- -- --------- --------- ---------
  Norwegian Export of                                                       
  Main Fish Products                                                        
  to U.S.                                                                   

  Products                         Metric                         Value     1000
                                   tons                           US\$      

                       2000        2001     2002        2000      2001      2002

  Frozen fil. of cod   4,488       4,074    4,703       27,946    19,230    29,091

  Frozen haddock       3,875       2,953    4,434       10,614    7,778     11,156

  Frozen filet of      1,811       1,886    1,987       9,847     9,687     10,957
  haddock                                                                   

  Canned sardine       1,116       790      877         9,994     7,364     8,303

  Frozen salmon        3,288       2,660    2,558       14,072    9,286     8,553

  Frozen filet of      1,611       1,594    1,738       14,068    12,592    11,674
  salmon                                                                    

  Fresh salmon         704         828      1,201       2,890     2,726     4,133

  Fresh filet of       3,631       2,089    2,770       21,914    10,834    13,003
  salmon                                                                    

  Frozen mackerel      2,979       3,134    4,377       2,867     3,706     5,609

  Smoked salmon        950         1,197    1,510       10,301    10,301    15,898

  Unaccounted others   12,101      7,171    22,694      31,055    30,611    43,246

                                                                            

  GRAND TOTAL          36,554      28,376   48,536      155,568   124,115   161,623

  Norwegian Imports of                                                      
  Main Fish Products                                                        
  from U.S.                                                                 

                                                                            

                       2000        2001     2002        2000      2001      2002

  Peeled froz shrimp   112         96       365         694       241       616

  Frozen cod           8,293       11,178   8,297       22,277    34,107    22,695

                                                                            

  Unaccounted other    1,363       2,327    1,398       5,189     2,520     3,642

                                                                            

  GRAND TOTAL          9,768       13,601   10,060      28,160    36,868    26,953

                                                                            
  -------------------- ----------- -------- -------- -- --------- --------- ---------

1 US\$ equal: NOK 9.00 in 2000 and 2001 and NOK 8.00 in 2002.

## Norwegian Import Market for Seafood

Norway's imports of fish and seafood amount to about US\$ 400 million
per year. The majority of imports are for use by the fish farming
industry or the processing industry for export products. There is,
nevertheless, a market for \"specialty products\" like scallops,
mussels, oysters, and live and frozen squid, which is intended for the
retail and HRI trade. Norway's imports of prepared fish, tuna, caviar,
herring, sardines, anchovies and salmon, amount to about 10,000 tons
annually for a value of about US\$ 50 million a year.

At present, 75 percent of consumer seafood products are distributed
through retail stores and specialty stores, while the remainder goes to
the hotel, restaurant and institution (HRI) market. Retailers, specialty
stores and the HRI market are supplied through both direct distribution
(52 percent) and through wholesalers (48 percent).