Russia’s overall catch has been on a consistent rise. In 2010, Russia’s total catch reached 4.2 million metric tons (MT). In 2012, that figure had increased to 4.33 million MT. By 2016, total fisheries were 4.6 million MT, and last year was record-breaking, with totals cresting 4.9 million MT, according to the Russia’s Federal Agency for Fisheries.
Yet paradoxically, the average consumption rate of fish by Russians within the same period has drastically decreased, by more than 50 percent. The decline is linked to sharp increases in prices, which have made seafood unaffordable for many people. The high prices themselves have been caused by a wide range of problems that must be tackled if Russia hopes to see its domestic seafood consumption increase.
Total catch breaks records
Russia’s higher catch totals over the past several years can be attributed to the integration of Crimea into the Russian Federation in March 2014, as well as by Russia’s subsequent ban on imports from U. S., Australia, Iceland, Norway, and the European Union in August 2014. As a result, the country’s import volume decreased from 1 million MT in 2014 to 450,000 MT in 2016, and Russian fisheries’ production went from a 50 percent share in the domestic market in 2014 to more than 80 percent in 2017.
But while Russia has captured a higher share of its own market, that market has been shrinking. In 2011, the average Russian ate 22 kilograms of fish, according to the Russia’s Federal Statistics Service. That figure was a significant increase from previous years – in 2009, when only 15 kilograms of fish was eaten per person, and in 2006, with just 13.1 kilograms. Moreover, there was a shift in consumers’ tastes, with more people preferring more expensive fresh and chilled products.
But in 2015, there was a drop in average consumption to 14 kilograms, the Interfax news agency reported, quoting industry analytics. By 2017, that number fell further, to 10.3 kilograms – considerably less than the total recommended by health organizations.
Also disappearing has been Russians’ interest in higher-end products. For example, the consumption of salmon dropped five times over the last two years. Currently, the most popular fish among Russians is herring, one of the cheapest seafood products available on the shelf, with nearly 400,000 MT consumed last year. It was followed by cod, with 300,000 MT; pollock is just behind in third place, followed by humpback salmon and chum salmon.
Price as decisive factor
The reason of the significant decline and the shift toward cheap species is explained by a sharp increase in price of fish on retailers’ shelf. In 2014, fish prices in Russia were two to three times lower than in 2018. In 2015 alone, the prices went up by 20 percent, according to statistics provided by Russia’s Federal Agency for Fisheries.
In 2017, a survey by the federal statistics service revealed that one kilogram of frozen or chilled fish cost RUB 200 (USD 3.50, EUR 2.80), and one kilogram of fillet cost RUB 300 (USD 5.20, EUR 4.30). But these figures are average, combining cheap and expensive products. According to the Meat Price Index, put together by the U.K.-based firm Caterwings, the average Russian had to work 40 hours to be able to buy one kilogram of fish in 2017. The index’s 2017 figures put the price of one kilo of whitefish at EUR 10.46 (USD 12.90), a kilo of salmon at EUR 17.53 (USD 21.50), and a kilogram of shrimp at EUR 27.79 (USD 33.80).
Thus far in 2018, the figures have not drastically changed, SeafoodSource’s own survey of retail stores in St. Petersburg found. A one-kilogram salmon fillet currently costs RUB 1,190 (USD 20.80, EUR 16.90), one kilo of trout costs RUB 699 (USD 12.20, EUR 9.90), one kilo of sturgeon runs RUB 1,249 (USD 21.80, EUR 17.70), and one kilo of tuna fillet costs RUB 1,899 (USD 33.10, EUR 26.90).
Over last eight years, prices of fish in the Murmansk region, where a significant part of Russian fisheries operate, increased twofold, the chairman of the Association of Coastal Fisheries and Farmers of the region Anatoly Evenko said at the international conference “Fishing in the Arctic” in March 2018, Interfax reported. In the city of Murmansk, one kilogram of fresh or chilled fish cost RUB 103 (USD 1.80, EUR 1.46) in 2010; by 2016, it was RUB 213 (USD 3.70, EUR 3.00).
Over the same period, Russians’ disposable income has been steadily declining due to an ongoing economic crisis. In 2017, an average monthly salary in the country was RUB 31,500 (USD 549.80, EUR 446.80), and an average monthly pension was worth RUB 13,800 (USD 240.90, EUR 195.80).
No simple solution
A variety of factors has contributed to the rise in prices. Valentin Balashov, chairman of the Association of Coastal Fisheries of the Northern Basin, said in an interview with the Sobesednik newspaper that Russian companies suffer from excessive supervisory pressure by the government and the absence of transparent standards for operation. Faced with a litany of obscure rules and the possibility of large fines for even unintentional violations, Russian firms have restrained from investing into their fleets and or new technology, Balashov said.
Another factor has been the policies of retailers and wholesale companies affiliated with retailers. These policies cause a considerable price inflation as seafood moves along the supply chain, from trawler to supermarket shelf. For instance, price for herring increases four times. In an interview with Sobesednik, Russian Fisheries Agency leader Ilya Shestakov shared the following figures: While fishing companies sell pollock for RUB 60 to 80 (USD 1.08 to 1.40, EUR 0.85 to 1.10) per kilogram, a consumer in Moscow pays RUB 220 (USD 3.80, EUR 3.10) for it. That means that fishing companies are only capturing about 30 percent of the end price of what their catch sells for at retail. In Shestakov’s opinion, the difference between the fisheries’ and retailers’ prices must be no more that 40 percent, but achieving this goal is very difficult, he said.
It is also important that nearly 70 percent of the Russian catch is harvested in the Russian Far East, while the biggest part of the country’s population lives in the central and western parts of the country – 3,600 kilometers away – which results in high logistics costs.
Currency markets have also shaken up Russia’s seafood market. In 2014, a sharp depreciation of the ruble against the U. S. dollar and the euro made exports even more profitable that before, industry experts said. That has been stimulating fishers to sell more to other countries.
Cumbersome bureaucratic procedures are additional barriers for Russian fish on its way to consumers.
“Vessels coming, for example, to the port of Vladivostok need to wait some time to get through time-consuming procedures [like] customs clearance, which increase costs. It’s easier and more profitable for fisheries to sell their catch to a client from Japan,” Dmitry Shimanov, the head of the consulting company Mar Consult, said in an interview with the Proved news agency.
Many of the factors affecting seafood prices in Russia reach far beyond the ability of the industry players and Shestakov’s agency to fix them. The Russian Federal Agency for Fisheries has nonetheless set the goal of upping the average consumption rate of fish to its previous high of 22 kilograms per person – at least, this is one of the targets of its official strategy for the development of the fishery industry in Russia through 2030. The agency said it plans to achieve this goal through stimulating investments in new processing plants and fleet renovation, promoting local brands, and cooperation with anti-trust authorities.
