Export

The Icelandic economy has, almost from the beginning, depended heavily on importing products such as minerals, grain and manufactured products. Consequently, export has also been important. From the 14th until the mid 19th century, usually around half of the exports were marine products; mainly shark liver oil and dried or salted cod.

After the mid 19th century, the importance of marine products steadily increased and reached around 90% of total merchandise export in the period from 1930 to 1967, when the herring stocks collapsed and the ratio of marine products in total merchandise export fell sharply. In the early 1970s, the newly established aluminium industry took over around 15% of total merchandise export, but the marine industry retained close to 75% of the merchandise export. By the turn of the 20th century, the aluminium industry expanded further and the importance of marine products in total merchandise export declined even more.

Developments in export products and species

From 1840, when reliable annual export statistics are first available, the main export was salted cod. Dried fish and shark liver oil (the majority of the category “other” in the figure on the right) were also important. At the end of the century, whale products, mainly oil, were of considerable importance. From 1900 to 1930 the most important export of fish products from Iceland consisted of cod and herring, mostly salted.

The proportions of products changed markedly after 1930. Salted products declined in importance but frozen products took over their niche. Fish meal, mainly from pelagic species, also grew in importance. This is linked to the increased availability of cheap energy required to make these products. During World War II, fresh fish took over as the main product for export, apart from fish meal and oil. From the late 1980s, the export of fresh products in containers by sea or by air freight has also been increasing in importance, as fish prices have risen, along with growing demand for fresh products.

Export countries and value

Most of the export goes to neighbouring countries in Western-Europe, the United Kingdom being the most important single country. There is also export to important markets in other parts of the world, such as Asia, America and Africa. The bulk of the demersal products is exported to Western or Southern-Europe and the United States, whereas the pelagic products are mainly sold to Eastern-Europe and Asia. For further information on the main markets, see the markets section.

The overall Icelandic export value grew from ISK (Icelandic króna) 204 billion in 2002 to ISK 466 billion in 2008; EUR 2.4 billion to EUR 3.6 billion. During the same period, the export of marine products has been more stable in EUR, with yearly export of around 1.4 to 1.5 billion; ISK 125 billion to 171 billion. Due to the devaluation of the ISK, export prices increased substantially in 2008.

Status of marine products

The principal focus of the Icelandic fishing industry is the fishing and processing of demersal species, primarily cod. The demersal proportion of marine product export has been increasing from 61% in 2002 to 65% in 2008. Pelagic species are the second most important group, primarily capelin and herring. The value of these species has fluctuated more through the period, or from 14 to 20% of total marine export. The capelin stock has been at a low in recent years, but the lower quota has been partly compensated with a higher proportion of processed products instead of being used for oil and meal production. Invertebrates, predominantly shrimp, decreased from 12% in 2002 to 7% in 2008 mainly because of a substantial decline in the shrimp industry. The value of flatfishes declined slightly, from 6% of marine export value in 2002 to 5% in 2008.

Cod is the single most valuable species in Icelandic waters in terms of total value. During the period from 2002 to 2008, its value has been relatively stable, calculated as 35 to 39% of total marine export value. A decline in the cod quota in recent years has been partly offset by increasing stock size and fisheries for other demersal species, such as haddock and saithe. The export of shrimp products declined from 10% in 2002 to 5% in 2008, as the industry went into severe recession. Product prices fell internationally and local shrimp stocks declined. The export value of capelin fell from 16% in the 2002 to 7% in 2008. This can largely be explained in terns of the total allowable catch; the 2002 season was a record season, with a catch of over one million tons. However, in 2008 the catch was only 149,000 tons. The value of herring increased from 3% in 2002 to 11% of marine export value, with growing stock size and more emphasis on processing into food rather than reducing to meal and oil.

Exporters

Most of the early export of fish went through individual fish merchants who bought e.g. salted fish from small producers and sold it to markets in Mediterranean countries, mainly Spain and Italy.

In the 1930s the exporting of fish products was regulated by an official export licensing system, with three large producer organizations having gained a quasi-monopoly of exporting frosen and salted products, as they had virtually unlimited export licenses from the authorities. This system was gradually abandoned from 1987, with the last remnant of it being brought to an end in 1993.

Today, a large number of small agencies and companies export fish from Iceland to various parts of the world. Many of the companies distribute their fish products by their own distribution network, and the largest companies run their own market departments.

References and further information

For further information on the economy in general see this page

Hörður Sævaldsson, University of Akureyri