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Icelandic salmon farming gets big boost from China deal

As the only European country with a free trade agreement with China, Iceland has many opportunities to grow salmon exports to the Asian powerhouse.

China may become Iceland's largest market for farmed salmon once free-trade agreements (FTA) allow for exports of the species, Icelandic producers told IntraFish.

"There is a demand for salmon products in China," said Laxar CEO Jens Helgason. "Having China as one of the customers in the portfolio is definitely an advantage and [it] may become one of the main players for Iceland's farmed salmon."

Last month, Iceland Minister of Fisheries Kristján Þór Júlíusson signed three new protocols to the existing free-trade agreement with China that will soon allow for Icelandic salmon exports to the country.

"We are working on getting contracts with Chinese buyers to supply the market," Ice Fish Farm's Chairman Gudmunder Gislason told IntraFish.

The protocols -- which take effect in two weeks -- review health standards of Icelandic aquaculture products, fish meal, fish oil and Icelandic salmon.

Producers foresee significant trade to take off as of the end of this year, however, some see challenges along the way.

"Arnarlax expects logistical challenges in the initial phase of introducing the product, but prospects are good especially for the larger-sized salmon," Arnarlax Chairman Kjartan Olafsson told IntraFish.

The FTA advantage

Five years ago, Iceland became the first European and only North Atlantic country to conclude a trade deal with China.

The two countries' agreements are mostly associated with fisheries, with China exporting ships to Iceland and Iceland supplying fish to the Chinese market.

The deal applied only to exports at the time of the signing, which meant that "new" species such as farmed salmon needed its own negotiations, Arctic Fish Business Development Manager Sigurdur Petturson, who was on the committee tasked with developing the FTA, told IntraFish.

China has been the fastest growing market for Icelandic seafood products throughout the past seven years, Petturson said.

"Of course the industry is still young in Iceland, so having access to the Chinese market is extremely important," Laxar CEO Jens Helgason told IntraFish.

Iceland's largest markets for farmed salmon at the moment are Europe and the United States.

Atlantic salmon production in Iceland is expected to double in 2019 to reach about 20,000 metric tons, according to figures from Iceland's Food and Veterinary Authority (MAST).

Based on the bearing capacity of the current farms, volumes could grow to 144,000 metric tons, Helgason said.

Only four main salmon producers operate in Iceland -- however, new farms have been coming online during the past year.

Even though Iceland's production of salmon is growing, volumes from these locations won't change the global production landscape significantly any time in the near future, Norwegian seafood giant Leroy CFO Sjur Malm, previously told IntraFish.

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