THE HERRING market has turned around.

Trade is now characterised by falling prices, large inventories and very little movement.

During the last two months prices have fallen by 5-10%. In addition to this, the weakening US dollar has hit exporters in Europe, particularly the Norwegians. Inventories in Norway are at very high levels and inventories in some of the major consuming countries, like Ukraine, are also high.

The situation is very different from last year, when inventories were practically empty and prices were high. One of the reasons for this development is blamed on huge price fluctuations during last year's season. Buyers may have been scared away from the herring market because of sudden price reductions. Russian Pacific herring may also have caused some of this.

In the mackerel industry, a more stable development is expected. The supply situation probably will not change very much this year as there have been only minor adjustments to European quotas.

However, it is believed that UK landings will be lower and UK exporters may lose market share.

Exports from Europe to the main market of Japan fell dramatically in terms of volume last year. Norwegian exports tumbled from 228,000 tonnes in 2004 to 165,000 tonnes in 2005, a 28% drop. However, prices were good. Norwegian exports in 2006 have been on a par with last year's.

EU exports also declined last year, from 270,000 tonnes in 2004 to 192,000 tonnes in 2005. However, a large share of this was channelled through Norway, thus allowing the Norwegians to retain their control over major markets such as Japan and China.

Canadian mackerel exports rose by 25% last year, to some 30,000 tonnes.

Canada is selling most of its mackerel to China and Japan.

The outlook for the mackerel market is uncertain. Most observers do not believe that last year's price levels can be sustained, but much will depend on landed volume. If the landed volume in Europe goes down, prices could come under pressure again.

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