Weaker currency ‘lifted Norway seafood exports by NOK 3.5bn’
The sharp fall in the value of the Norwegian krone in March following the global introduction of Covid-19 lockdown measures was the difference between the nominal value of the country’s seafood exports rising instead of falling, a study has concluded.
Without the depreciation of the currency, the value of exports for the first four months of this year would have fallen by 4%. Instead, it increased by 6% to NOK 36.7 billion. Of this total figure, the weaker krone contributed NOK 3.5 billion, according to Thomas Nyrud, a researcher at Norwegian research institution Nofima.
However, the overall picture is not a positive one for exporters, says Nyrud in an article written by Nofima web editor Wilhelm Andreas Solheim.
Reduced buying power
“The figures for April and May show export revenues falling, even taking into account the current value of the krone, and with the prospect of reduced buying power going forward in many key markets there is a risk of a continued decline,” says Nyrud.
The researcher has been working to calculate the impact of currency exchange rates on Norwegian seafood exports as part of a four-year research project funded by the FHF – the Fishery and Aquaculture Industry Research Fund.
Salmon exports worth less
In March, the price for Norwegian salmon was 8% lower than at the same time a year earlier. In April, the price was down 16%. If the krone had not fallen, these decreases would have been 21% and 29% respectively.
The export value of fresh salmon was almost identical for the same period in 2020 and 2019, but adjusted for currency effect, the fall in export value was 8% during the first four months of this year.
At the end of March last year, £1 bought around NOK 11 but at the end of March this year, £1 was worth around NOK 13.5.
Norway’s currency has since strengthened, a development that makes Scottish salmon more competitive against Norwegian fish. £1 now buys just under NOK 12.