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Norway ready to battle Chile, Faroes and Scotland for Chinese salmon market

Salmon producers rejoice at a new market opening its doors.

Norwegian salmon exporters are delighted diplomatic relations with China appear to have normalized after a six year-hiatus.

“It’s been a hard slog working with exports of Norwegian salmon to China since 2010, and it’s only become more and more difficult. The opportunity hasn’t been there for us to be all that active," Botholf Stolt-Nielsen, managing director of Ocean Supreme, which exports large amounts of salmon to Asia, told IntraFish

"Now we can work dynamically towards this market, and we have numerous contacts there. Exports can be up and running in no time at all."

According to Stolt-Nielsen, Norway had a market share of around 95 percent in China before the Nobel Peace Prize was awarded to Li Xiaobo in 2010.

The event triggered tensions between the two countries, leading to drastic drops in the volume of Norwegian salmon in the market, and simultaneously giving the Faroe Islands, Scotland and Chile a massive opening.

“Chile has surged ahead in China after they inked a free trade agreement there just after Norway had been shut out. At present their (customs) tariff is zero, while Norway has 10 percent," said Stolt-Nielsen.

"The fact that Norway can now normalize relations has tremendous significance for our salmon."

Global salmon market

China currently imports around 50,000 metric tons of Atlantic salmon annually. And with Norway being able to take direct action again, demand will be boosted, according to Stolt-Nielsen.

It's difficult to say how Just how quickly things will change, though. Stolt-Nielsen stressed obstacles became increasingly difficult over time, and therefore it could also take time for the tide to turn.

“But if this is taking place through reaching an understanding with the political administration in Beijing, then it will definitely happen eventually,” he said.

If Norway captures market shares in China, other countries’ fish will gain market share in other countries.

“There has also been limited supply of large salmon -- which is in demand in this market -- in Norway the last few years. If we look at the overall balance, it’s a positive that Norway can serve this market also -- but there won’t be any explosion in consumption of salmon in China,” said Stolt-Nielsen.

However Norway has advantages. Logistics are good, and Norway accounts for half of the world’s total salmon production.

“Many aircraft fly direct from Europe to China. Norway can serve this market swiftly and efficiently. Chile lies almost three times further away in distance. They have to fly via the United States and Europe or the Middle East," Stold-Nielsen said.

"Chile has managed to build itself up because Norway has been partially closed out and they (Chile) have a free trade agreement. China is a huge market, and many there are keen to consume quality seafood. The potential is there to exploit that over time."

Possible to regain position

Henning Beltestad, CEO of Leroy Seafood Group told IntraFish it’s a little premature to say what a normalization would entail, but he said he'd be delighted if relations return to normal and they can resume the activity they had in China.

“There is massive potential there, so it is highly encouraging if the situation normalizes. In 2010 Norway had a key position in building up the market. That position is possible to take back. There are major importers in China, so it could go relatively quickly,” said Beltestad, adding that growth in total production on a global scale is limited.

“There’s potential also for whitefish," said Beltestad, with Leroy's recent acquisition of whitefish companies Havfisk and Norway Seafoods. "Here also the normalization of relations is great news.

"But the prime consideration regardless is to have access to the markets and have the best external conditions."

A day of celebration for Norwegian salmon exporters

Marine's Harvest's Acting Communications Director Ola Helge Hjetland told IntraFish they can’t wait to start selling more salmon to the Chinese market, and that they are naturally thrilled that dialogue between Norway and China has resumed and that relations will now be normalized.

But he wasn’t about to hazard a guess on how long this would take.

“We have no idea about a time aspect. We’ll have to see how the dialogue and negotiations between the countries pans out now. But we are overjoyed to see things finally in motion,” he said.

Marine Harvest has production in all of the biggest producing countries for Atlantic salmon, and as such exports to China from countries other  than Norway. Nonetheless it means a great deal to the company that it can also export from Norway.

“As a company with aquaculture in several countries, we have greater flexibility accordingly. However, we are pleased to regain a normal situation. It ensures even more flexibility to also be able to export from Norway, but it remains to be seen how all this will turn out.

"Regardless, this is a day of celebration for Norwegian salmon producers,” he said.

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