Iceland review - 2016, Page 63

ICELAND REVIEW 61
Neskaupstaður, Vestmannaeyjar, Horna-
fjörður and Þórshöfn—that might have
to tighten their belts waiting for new
markets to be discovered. Among other
threatened localities, according to the
Regional Development Institute, are
Raufarhöfn, Eskifjörður, Fáskrúðsfjörður,
Höfn, Snæfellsbær and Garður.
FISHY FUTURE
Iceland’s total seafood exports consti-
tute close to 40 percent of all its com-
modity exports. As research conducted
by Reykjavík Economics ehf. illustrates,
this high ratio means that the country
is even more affected by the sanctions
than other fishing nations like Norway,
Finland, Estonia and Turkey, with more
diversified economies. For the Faroe
Islands, which, like Iceland, is not part
of the EU and makes most of its money
from fishing, this situation is its finest
hour. In a year, its export volumes to
Russia have grown by about 150 percent,
reports Marko Fish, an information por-
tal for the seafood industry.
Iceland has tried to persuade the EU
to temporarily remove the 20-percent
tariff imposed on its goods imported to
the EU because of its non-EU status.
“We thought it was only fair if we are
ready to take part in the sanctions; we are
losing our second-biggest market for one
of our most important products,” says
Kolbeinn Árnason, CEO of Fisheries
Iceland, an association which “aims to
increase value creation from a scarce
resource.” “The simple and short answer
was no,” Kolbeinn adds. He predicts the
expected loss to range from ISK 12 to
18 billion (USD 93.5-140 million). As
an increasing share of the mackerel and
capelin catch is going to fishmeal pro-
duction, their export value will decrease
by ISK 2-11 billion (USD 15.6-85.7 mil-
lion), respectively. To add to that, Iceland
is in the midst of discussing with Russia
its fishing rights for Icelandic vessels in
the Barents Sea—the deal is worth ISK
2.9 billion (USD 22.6 million).
Kolbeinn believes that fisheries will
manage to find a way out: “We are a
resilient business.” He acknowledges the
need to look for other markets as well,
but suggests politicians not underes-
timate the uncertainty. The available
alternative export markets for mack-
erel—Eastern European and African
countries—have less purchasing power.
Japan, by contrast, a very high paying
market, demands higher quality. “The
problem with our mackerel,” explains
Kolbeinn, “is that we catch it at the time
of year when it’s not as good as when the
Norwegians do.” Even though China
and Vietnam are regarded as possible
options, he admits that there are no
guarantees: “Getting people to eat new
products is a very difficult thing.”
POLITICS