Faroe Islands cashing in on Russian sanctions

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Tórshavn, the largest community in the Faroe Islands. While countries in the European Union, Norway and Iceland hasve seen their trade relations with Russia suffer because of sanctions and anti-sanctions, Faroese exports to Russia have gone up. (iStock)
Tórshavn, the largest community in the Faroe Islands. While countries in the European Union, Norway and Iceland hasve seen their trade relations with Russia suffer because of sanctions and anti-sanctions, Faroese exports to Russia have gone up. (iStock)
The Faroese economy benefits greatly from its monopoly of the Russian salmon market. The islands’ biggest marine produce company, Bakkafrost, has seen its stock surge about 100 percent over the past year, including re-invested dividends.

While part of Denmark, the archipelago enjoys independent trading status, and has enjoyed a boom thanks to its decision to stay out of the European Union. While countries in the European Union, Norway and Iceland has seen its trade relations with Russia suffer because of sanctions and anti-sanctions, Faroese exports to Russia have gone up.

Russia had already emerged as a growing market for the Faroe Islands before the annexation of Crimea, with the proportion of exports rising from 8.4 percent in 2012 to 17 percent in 2014, Bloomberg reports.

Export growth

Fish exports, which makes up 98 percent of Faroese sales abroad, grew 12 percent in the year through June.

Bakkafrost, the islands’ biggest marine produce company, has seen an 800% return on shares. Over the last year alone, the group’s stock has risen by 100%, including reinvested dividends.

Eastern Europe accounted for 53% of the company’s fresh salmon sales in the second quarter, shooting up from 5% for the same period last year, Undercurrent News reports.

Russia is willing to pay more for salmon than Europe is for the moment. Bakkafrost is selling at NOK 22.6 (€2.4) per kilo, while Norwegian companies are selling at NOK 9.2-9.8 (€0.98-1.05) per kilo, Undercurrent News writes.

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