Iceland lifts capelin ban a week after imposing it

REYKJAVIK (Reuters) - Icelandic fishermen began reeling in capelin again on Thursday after a ban on the fish was lifted just a week after it was imposed.

Iceland's minister of fisheries, Einar Gudfinnsson, lifted the ban after the Icelandic Marine Research Institute (IMRI) said it had discovered far more of the fish in Iceland's waters than previously thought.

The ban -- which had been expected to last through the year -- had sparked worries about its impact on the economy, with leading Icelandic bank Kaupthing estimating the move could have shaved 0.4 to 0.7 percent off economic growth this year.

But the institute says its research indicated about 470,000 tonnes of capelin were available, more than the 400,000 that are meant to be left each year for spawning.

Icelandic fishermen had already caught an estimated 30,000-40,000 tonnes of the fish, a member of the smelt family, so far this year when the ban was imposed. They now have a quota to fish for as much as 100,000 tonnes.

Gudfinnsson, speaking on Icelandic radio late on Wednesday, said he left open the possibility of another quota increase.

"If the IMRI finds there is even more capelin in Icelandic waters, then of course I will take it under consideration to increase the quota even further," the minister said.

The usual yearly quota for capelin is 250,000 tonnes.

The ban, had it remained, could have cost Iceland as much as 10 billion Icelandic crowns ($150 million) in lost exports, Kaupthing estimated.

(Reporting by Kristin Arna Bragadottir, editing by Mary Gabriel)