Russian fisheries are getting prepared for expected reductions in total allowable catch (TAC) for pollock, the biggest species in the national harvest.
Companies are seeking to keep their income stable by investing in processing facilities in an effort to produce more fillet. However, there are doubts that there will be sufficient demand for deeper-processed food.
Generational shift brings new challenges
In Russia, pollock is fished in the Russian Far East, mainly in the Sea of Okhotsk, the Bering Sea, and the Sea of Japan. In 2018, large stocks of the species were also discovered in the Chukchee Sea – scientists remain eager to find out the reasons for this migration.
Currently, the total biomass of pollock in the Sea of Okhotsk is estimated at 11.6 million metric tons (MT), with six to seven of those tons being fishable. TAC for pollock is traditionally set at a level of about 20 percent of spawning biomass to keep the stock above the target level. TAC in a given year depends on the productivity of recent recruitment, which is affected by a number of various factors, including climate, hydrological, food abundance, etc. While the recruitments of 2011 and 2013 were well above the multi-average level – which resulted in high volumes of harvest – there haven’t been any such productive years since.
In 2010 through 2018, catches of pollock in Russia were between 1.51 million MT in 2014 and 1.74 million MT in 2017. In 2018, nearly 1.67 million MT was caught, according to data by the Russian Federal Agency for Fisheries. Out of this volume, 706,700 MT were exported, 13 percent less than in 2017, while Russia’s entire fish export volume rose by 4.4 percent in comparison to 2017, to 2.24 million MT. Pollock remained a leader among Russia’s exports, with a 39 percent share in the cross-border trade.
The TAC for pollock for 2019 was set at a level of nearly 1.8 million MT, which is a bit higher than for 2018. But things aren’t looking positive for the years to come. Deputy director of Pacific Fishery Scientific Research Center (TINRO) Igor Melnikov said at a session of the Far Eastern Scientific Fishing Council in mid-2018 that pollock would see a peak in stocks in 2018-2019. Melnikov added that the peak would be followed by the start of a decline, with the drop in stocks potentially becoming more significant in 2020-2021.
First deputy director of the Russian Research Institute of Fisheries and Oceanography (VNIRO) Oleg Bulatov added that a base for the current catches is the generation of pollock seen during the year 2013, meaning a significant decline will be observed in stocks followed by a commensurate drop in TAC starting from 2021, as subsequent generations after 2013 were less productive.
Scientists are vague about what the rate of decline can be. Leading specialist of the pollock and herring lab at TINRO Anatoly Smirnov said in an interview with the Fishnews agency that the decline in pollock biomass should be smooth. In his words, it is difficult to say how long the trend will last and how strong it will be. Alexey Buglak, vice president at the Pollock Catchers Association, told SeafoodSource he expects the TAC for pollock for Russian Far East to be reduced by 6 to 8 percent by 2022.
Fedor Kirsanov, CEO of Russian Fishery, said at Groundfish Forum in late 2018 that he expected an annual reduction in TAC to be as much as 5 percent starting from 2020, making it decrease by 20 percent if compared with 2018.
“That’s an inevitable biological risk our industry faces,” he said.
More money from less fish
With volumes of the species, which represents almost 30 percent of the national catch and 39 percent of the national fishery export, being expected to fall in a short term, Russian fisheries seek to reflect those realities in their strategies.
Kirsanov noted in his speech at the Groundfish Forum that deeper processing, which is becoming a trend in the industry, is a response to the challenge.
“Companies focusing on deep processing and investing into fishing and manufacturing facilities will gain in the future,” he said, according to a company press release. Kirsanov went on to calculate that fillet and mince will hold 26 percent of the whole pollock production in Russia in 2025 instead of the current 9 percent. The share of headless pollock will be reduced by a commensurate rate.
Demand in Russia for deeply processed seafood is increasing faster than the supply. While demand for pollock fillet rose by 165 percent in 2015-2017, supply increased by just 35 percent. In 2018, the demand rose by 10-15 percent, and it’s predicted to further rise by 5 percent annually.
Alexey Buglak from Pollock Catchers Association told SeafoodSource he sees stable growth in production of frozen-at-sea pollock fillet, which increased threefold over the last four years, to 70,000 MT in 2018.
“New facilities, be it ship or factories, will further drive this trend. New processing capacity plans announced in 2018 are going to increase annual production of fillet and mince to 225,000 MT by 2025,” he added.
Russian Fishery implemented an ambitious investment program, which envisages building of seven state-of-art super trawlers and a plant in the Russian Far East. The trawlers will be able to fully process caught pollock into mince, fillet, and surimi, while the plant will have a daily production capacity of 100 MT and is expected to be operational by 2021. Its capacity can be further increased by 20 percent if needed.
Russian Fishery both sells fillet and mince and also uses it for producing finished seafood, which it sells under its own brand Nordeco.
Norebo also seeks to increase the share of pollock fillet in its production and sales, Sergey Sennikov, the deputy director of international affairs and public relations for Norebo, told SeafoodSource.
“We will get new trawlers in 2022-2023 equipped with processing facilities,” he said.
Sennikov doesn’t seem very optimistic on market prospective of the deeper processed products.
“We see a steady growth in demand for fillet as it’s cheaper than Arctic cod, for example. But we don’t see a rapid and strong growth in demand for wild fish as disposable income of consumers have been declining over recent years. A strong increase in supply may cause a market unbalance with prices for frozen or headless pollock being higher than for fillet which may negatively affect fisheries’ economic indicators,” he noted.
The moves by fisheries are directly in line with policy targets set by Russian government in late 2018, in an effort to enhance the country’s financial benefits from fishery export.
While saying that the Russian domestic market has a huge untapped potential for sales, Sennikov said that PR and marketing efforts must be taken to promote benefit of eating pollock to consumers both in Russia and abroad.
“The consumer is not always aware of the fact that today’s pollock products have been significantly improved when compared with what people used to eat in the Soviet times. With proper storage, processing and transportation, the consumer can buy fish that’s very good for health and cheap. Russian fish needs to get campaigned to our consumers,” Sennikov said.
Alexey Buglak shares the widely-held opinion that pollock needs some promoting efforts, arguing that inefficient distribution and lack of focus on quality product forms in the supply chain as well as import of Chinese phosphate-filled double frozen fillet contributed to bad perception of pollock among Russian consumers.
“There is a way to fix it’ he said. ‘Increase in production of consumer-packed frozen at-sea fillets or other products that minimizes the risks of losing quality on the way from sea to consumer will surely have a positive effect on Russian consumers, moreover pollock is indeed excellent protein source for reasonable price,” Buglak said.