By March 5, 2018 09:36 GMT

Undercurrent News

Norway has returned to the top of whole, fresh Atlantic salmon exporting countries to China, after a significant improvement in market access over the past few months.

And with free trade agreement (FTA) negotiations continuing apace, zero tariffs would see the country gain even greater market share for salmon, as well cod, red fish, Greenland halibut, mackerel, shrimp and several other species sought after by Chinese consumers.

China and Norway resumed FTA negotiations with China in August last year, and followed up with a new round of negotiations in December. The next negotiation meeting is scheduled for May. Current Chinese import duties on fresh salmon are 10%.

Fresh salmon wholesale prices in China jump almost 30%

“A free trade agreement with China will have a massive impact on Norwegian seafood exports,” Sigmund Bjorgo, Norwegian Seafood Council country director in China, told Undercurrent News.

According to latest Chinese customs figures, in the month of January, China imported 1,924 metric tons of whole, fresh Atlantic salmon from the Scandinavian country (HS Code 030214), ahead of nearest competitor Chile, which supplied 1,474t.

It amounts to a 1,613% increase on imports in January of 2017, when China imported just 112t of Norwegian product.

“Since November last year, China has gradually imported more Norwegian salmon,” Bjorgo said. “Volumes started picking up in early November, and gradually increased over the next months.”

As of week eight of this year, Norway had exported 2,820t of fresh salmon to China, according to Norwegian data; at the same time last year Norway had exported just 291t in the period.

Salmon is getting into markets in Beijing and Guangzhou, whereas before these markets were off-limits.

“The industry reports shorter quarantine time, and salmon is now also imported to Beijing and Guangzhou,” he said. Quarantine time in Shanghai is somewhat longer, though, he noted.

After Chinese dissident Liu Xiaobo was awarded a Nobel peace prize in 2010, China imposed long quarantine times for Norwegian salmon exports on veterinary health grounds causing salmon to lose freshness and become unmarketable. Finally, the situation has changed.

“Our estimate is that with a full normalization of market access, Norway should hold 65% of the salmon market share in China,” said Bjorgo. “This means that we expect to export around 1,000t of salmon every week with a full normalization.”

Early last year, industry analysts estimated China could by 2019 import 32,000t of fresh salmon from Norway annually, although with imports normalizing from early 2017.

Three major salmon producing provinces in Norway — Sor Trondelag, Nordland and Troms – still remain suspended from exporting to China, with Chinese veterinarian authorities heading to inspect the three provinces this week, said Bjorgo. This reduces the availability of salmon approved for the Chinese market, he said. “We hope this will lead to a lift of the suspension.”

However, currently China is importing 400-500t of chilled salmon a week except during holidays, said Bjorgo, already more than other leading suppliers, Chile and Australia. Biggest volumes were imported over Christmas, New Year, and Chinese New Year (see graph).

No ground lost, yet

Chile and Australia appear most threatened by Norway’s return to the market. In January, however, Chinese imports from Chile and Australia also both increased, up 10.7% and 18.4% year-on-year respectively (see graph).

It’s possible fresh salmon currently being imported into China from Norway has been simply re-directed from Vietnam, where it was sent prior to being taken into China through the ‘grey trade’. According to industry sources, Norway still maintained a significant share of the Chinese fresh salmon market on account of this trade.

In January, import prices for Australian salmon were $8.48 per kilogram, according to Chinese customs. Prices for Norwegian and Chilean salmon imports were the same, at $9.14/kg (see table).

China’s imports of whole, fresh Atlantic salmon in Jan, 2018

Origin Volume in metric tons Value in US$ millions US$ per kilogram y-o-y change in volumes y-o-y change in total value y-o-y change in value per kilogram
Source: Chinese Customs; Note: HS Code 030214
Norway 1,925 17.6 9.14 1613% 1352% -15%
Chile 1,474 13.5 9.14 11% -13% -21%
Australia 682 5.8 8.48 19% 1% -15%
Faroe Islands 494 4.7 9.58 -11% -25% -16%
UK 340 3.0 8.79 -21% -39% -22%
Canada 115 0.9 8.20 -58% -70% -28%