Dmitry Fedotov sums up Brussels
Monday,30 April,2012 07:47:28
European Seafood Expo is over, and it’s time to wrap up its third day. It brought many valuable and interesting pieces of information and, among some other things, I’d like to highlight three key conclusions.
The first concerns delay of MSC’s certification of Russian Pollock and Salmon fishing companies. What makes this issue even more unclear is that either side seems to be interested in certification, especially in a view of Russia’s joining WTO that will happen sooner or later. I tried to contact some persons who would explain where the problem is, but didn’t succeed, unfortunately: I was twice at the MSC booth and was promised “to be contacted shortly during the show,” but unfortunately it was not the case. If you have an opinion, your comments are always welcome.
Two other issues are related to Wild Salmon and Alaska Pollock. Having talked with colleagues from many countries and feeling the whole market trends I can say that prices for Alaska Pollock are going to boost. It a matter of time when depletion of Alaska Pollock oversupply from U.S. producers will kick in, which will stabilize European fish market. Other reasons include rising fuel and labor costs and some minor factors.
The same trend is for the wild salmon. In a respond to the growing demand for this delicious fish the prices will also be rising. By coincidence, this year will see a cyclic decrease of its catch, so buyers should be prepared to pay even more than they could have expected.
In general, in my opinion European Seafood Expo was far more fruitful for useful observations, important news, and information for consideration compared to the Boston Seafood Show. And I simply can not but express my deep respect to excellent organization of the event, and of course, I was very happy to meet many of its participants, although I still did not manage to see every person I wanted to meet.
Viva las Brussels!
Dmitry Fedotov sums up Day 2
Thursday,26 April,2012 05:31:29
Today I experienced an amazingly positive boost of my self-esteem: First, I was recognized by people I was just passing by…a few times actually. Second, I was misquoted twice during the day (which at least means that people read my articles or interviews). Third, I was told that deals of my fellow partners came through because of my publications and price projections.
Dear blog audience, I thank you for this wonderful feedback and look forward to giving you more input in the future. But please, assume I’m a human and am subject to human errors as well. Having said this, I ask you to not only base your opinion on my information.
Down to business: My feeling of Chinese processors getting orders confirmed today as I had a few productive large-volume supply contract discussions. The processors would not say, but I assume that without a buyer on the other end they would not commit to these volumes.
Salmon remains a hot topic, and as it seems wild salmon is a mysterious product for many. Some see it as a part of salmon variety and put it in line with farmed species, however I had a talk with an interesting company that has a different approach: Assuming good quality of the product, they would market it as a “boutique” product compared to farmed salmon. Although the demand of this company is not huge, I think it’s an interesting concept worth exploring and will support it.
Off to a dinner meeting with my fellow buyers from Bremerhaven.
Day 1 at Brussels
Wednesday,25 April,2012 02:42:53
Report on the first day of the European Seafood Expo.
Indeed another successful start. A lot of positive dynamics and trends visible.
It seems to me that Chinese processors are not fully represented this year. Big players are here, but small ones are missing.
Good momentum: Chinese Processors seem to be securing orders from European buyers, which is always good news for us as their suppliers. Expect Alaska Pollock price to have support or even rise.
Demand is high and companies are trying to secure stock. One company was even interested to allocate debt facilities to secure supply.
Traceability, quality and sustainability are issues that processors talk about. I believe it’s a good trend.
MSC certification issue has become a lesser significance as I precept, and although I think that MSC is a great program, it always comes back to quality of individual product, and this is where the salmon buyers are very cautious.
Russian seafood industry getting ready to join WTO?
Thursday,19 April,2012 09:15:19
There is a hot discussion about possible consequences of Russia's WTO participation.
Some were discussed at recent meeting of the Russian fish processing
enterprises representatives with Maxim Medvedkov, Director of Ministry
of Economic Development of the Russian Federation.
During the conference Medvedkov, who is also responsible for
negotiations with the World Trade Organization, made a number of
important statements. In particular, he said that “Russia’s WTO
accession does not impose constraints on Russia in the implementation of
technical measures to control imported seafood. However, use of these
measures should be more careful.” (In plain text: technical regulations
such as sanitary and veterinary are becoming the main instrument for the
Russian seafood market regulation).
According to the insider, during the meeting it was announced the
establishment of a committee to study the effects of Russia’s joining
the WTO, and adaptation of the domestic fishing industry to the WTO
rules. It’s interesting to consider, that the representatives of the
fish processing enterprises who participated said they knew nothing
about the WTO rules, nor the consequences for their business after the
Russia’s accession to WTO.
Besides, two questions about the draft EU-Russia agreement were
touched. First of them concerning assistance of export of Alaska Pollock
fillets to Europe, and second - elimination of existing barriers for
imports of fish meal to China.
But what can you say about the following news about temporary banned import of all Norwegian fresh fish to Russia.
Last week Russian Rosselkhoznanzor (veterinary authority) made a
preliminary motion to temporarily terminate all imports of Norwegian
fresh fish, but it’s still unknown when it will be put into force.
According to the Russian veterinary agency, all imports of Norwegian
fresh farmed fish can be stopped next week.
The reason, or maybe a pretext, is that Rosselkhoznanzor has serious
concerns about sanitary problems with shipments of fresh fish from
Norway. In 2011, when Russia became Norway’s largest salmon market, the
bulk of all imported fish (nearly 97 percent) consisted of fresh fish.
However, Russia introduces import restrictions on fresh fish on a
regular base, applying them to certain suppliers whose batches were
identified as containing unwanted bacteria like salmonella. But this is
the first time when a ban is considered on all exporters.
Spokesperson Alexey Alexeyenko said that Norwegian authorities
inspect only 1 percent of the fish batches exported to Russia, and that
is unacceptably low. He believes 25 percent would be a more acceptable
Ole Fjetland, assisting director at the Norwegian Food Safety
Authority’s (NFSA) control department, still has not expressed his
opinion for exact reasons of a restriction.
In my opinion, any restriction on import of any goods, especially
from neighboring countries should always be considered very carefully.
As for consequences that the ban, if imposed, will bring to Russia’s
fish market, I would highlight three main things.
First, the import
restriction will stimulate growth of salmon price since it will
considerably reduce access to the raw material for fish processors.
Second, the ban for Norwegian fish can become a green light for
imported frozen salmon from Chile producers actively trying to find
their ways to the tight Russian market.
And third, Norwegian salmon restrictions are absolutely favorable to
Russian salmon and trout producers. Even though domestic output has been
low so far, but it shows a positive trend, and this situation will
further boost local producers. So it can be just a short-term measure to
provide advantage to national fish producers.
There’s also another thing to consider. As I learned, in January
Russia’s anti-monopoly agency started an investigation into the
veterinary agency, and the cause was in its probable colluding with
Russia’s largest importers from Norway. According to accusations,
Rosselhoznanzor was using sanitary pretexts for restricting imports from
those Norwegian suppliers who did not have contracts with Russia’s main
importers. It’s also worth mentioning a recent scandal with cheeses
imported to Russia from Ukraine when the pretext was exactly the same,
i.e. alleged sanitary issues. However, most analysts agreed that the
real reason was connected with politics. So the ban of Norwegian fish
may be also a tip of an iceberg public does not see yet.
In my personal opinion taking all above into consideration, I believe
that the ban will be (if at all) a short-term measure. Restrictions, if
they are not properly motivated, are always bad for any economy. They
may create advantages for producers that may not be the best, but
“compliant.” In a long run it destroys consumer confidence and
Note on the side, and please don’t take it as an attempt to advertise
my product, I believe everyone should try wild pink and chum salmon
from Sakhalin. Although the price of it tends to be higher than its
farmed sister species, I believe the taste in consumer’s mouth is a good
point for consideration.
Saying this I’m boarding a plane to Brussels. See you there!
State to inspect Russian salmon hatcheries
Monday,16 April,2012 15:04:20
Salmon is one of the most important products for our customers, so I’m always glad to share my piece of mind about it.
Several days ago, a state committee completed inspection of several salmon hatcheries in the Sakhalin Region. The audit found the infrastractural state of aquaculture products satisfactory and relevant to the regulations applied to fish farming.
On the main part of the surveyed enterprises the aquaculture products in the “free embryo” stage are placed for growth in special nurseries under incubation-like conditions.
According to the committee representatives, within 2012 the Sakhalin hatcheries will be able to release into natural water reservoirs at least 644.3 million of juvenile Pacific salmon, including following species:
- 200 million of pink salmon
- 443 million of chum salmon
- 1.3 million of silver salmon and cherry salmon.
The next stage of inspection on all fishing farms will be held in the second and third quarters of 2012 when the committee checks a condition of young salmon just before its release into natural habitat (the sea).
Sakhalin, Kuriles to add seafood facilities
Wednesday,11 April,2012 14:52:31
The members of the Sakhalin region Council recently enrolled a discussion of projects increasing the aquatic resources catches and fish processing on shore facilities in the Sakhalin-Kuril area.
The project developed by the “Gidrostroy” company includes increase of saury and Alaska pollock catches, building year-round canning plant in the village of Ozerskoe, and commissioning industrial refrigerator for 4 thousand metric tons.
The project also involves a port infrastructure development on the island of Shikotan to enable mechanized processing of fish products.
The total project cost is about USD 350 million, and the objects are scheduled to be put into operation by November of 2012.
The works are carried out through partnership where private businesses are responsible for the creation of manufacturing facilities and ensuring an effective utilization of resources, while the state companies construct infrastructure.
According to announcements, cold storage facilities are ready to use, and a new pier will be put into operation by autumn 2012. The building of the canning plant in the village of Ozerskoe is completed for 70 percent.
For the current year it is planned to buy and install canning equipment, and also to finish the pier construction.
It’s interesting to note that shares of the state budget funds invested into the project and funds from other investors are 30/70. It means that companies become more active in their collaboration with the state, and are not afraid to invest into the Russian fishing industry.
According to one of the insiders with whom I’ve talked, a scheme like that will be used for further projects in the Russian fishing industry. So take your chances, especially if fisheries get 20 year quota allocation, a plan being actively discussed on a government level at the moment.
Catch certification to prevent illegal catches in Russia
Friday,6 April,2012 08:28:25
Legal issues concerning legal origin of seafood still can be a headache for buyers dealing with some Russian fishery companies. It seems like this long lasting concern can soon be improved.
As I recently learned, the Russian government plans to introduce mandatory certificates that would prove a legal origin of seafood caught by Russian fishing companies and shipped to the countries of the Asia-Pacific region. Apart from resolution of the legal concerns, this law can bring about USD 1 billion of additional revenue into the Russian Federation state budget.
The system of compulsory catch certification, used in the North Atlantic region, has proven its effectiveness, so a similar practice will be taken as a pattern to extend it into the Far East region. For instance, Japan and China are negotiating terms of such agreements at this moment as well.
The implementation of the catches origin certificates will allow to avoid approximately 140 thousand metric tons of various aquatic bio-resources from an illegal turnover, particularly valuable fish, crab, and sea urchin.
Russian engineers design waste-free fish processing
Monday,2 April,2012 08:58:13
As I’ve learned recently, specialists of “technological equipment” company (located in the Primorye region) had developed and prepared for mass production a brand new processing line, which allows to make any fish processing plant clean and waste-free.
In less than a year the Vladivostok engineering company “Technological Equipment” in cooperation with the Swedish company Alfa Laval has developed a processing line that can be installed both at a fish processing plant on the shore or on a fishing vessel, and process fish waste of any fat content. This is the first time in Russia when such equipment has been designed and manufactured domestically. It complies with all the applicable standards, and basic models are designed for daily processing of 36, 60, 100, and 150 tons of raw materials.
As the company’s representative said, “these production lines can be installed on vessels, but Russian fishing companies still order them rather rarely. Apparently, it’s because of an old belief that equipment of our company is aimed only for coastal fish processing plants. But this is no longer true, and now we can supply the equipment designed specifically for the vessels.”
If you are interested in this cheaper, but highly-effective equipment from Russian specialists, just let me know or leave a message here.
P.S. By the way, I had an interesting meeting with Channel Fish Co, company that deals with fish processing “waste” products to process them into pet food. Challenge: FDA certification and high cost of transportation from Sakhalin to Seattle. Anyone up to the challenge?