Government measures aimed at stimulating local production are not effective so far. The U.S. market share for fish and seafood in the period plummeted by 61 per cent. Trade sources estimate that local demand for fish will stabilize by the end of 2009 and improve the outlook for fish imports.
According to Rosstat, overall Russian food production declined by 13 per cent in the first quarter of 2009, as compared to its peak in October 2008. In the same period, production of fish and seafood reportedly declined by 10 per cent. Rosstat attributed the decline in to the collapse in consumer demand due to the impact of the world financial crisis. A major portion of the middle class had less disposable income and shifted to lower-priced food products and fresh foods versus ready-to-eat products, therefore, urging retailers to optimize assortments mostly towards fast-moving products.
Production
According to Rosstat, production of canned and preserved fish products declined by 10 per cent since January 2009. According to the Fishery Council’s analytical group the sharpest decline in fish production occurred in the following segments: gutted fish (28.2 per cent), chilled fish (23.9 per cent) and dried and cured fish (18.1 per cent).
The major reason for the decline in production is attributed to lower demand for fish and products due to high prices. Upward pressure has been put on prices as fishermen prefer to sell the harvest to foreign suppliers. For example, from 300,000 MT of pollock caught by Russian fishermen during January-March 2009, only 10 per cent is estimated to have been sold in the local market. During 2008, prices for fish and seafood increased by 14 per cent, while during the first quarter of 2009 wholesale fish prices increased by 6.8 per cent. As a result, consumers have shifted from ready-to-eat value added products to cheaper frozen wholesome fish. Market analysts estimate that by the end 2009, fish and seafood production may shrink further.
The government has taken several measures aimed at stimulating local fish and seafood production, however, they have not been successful yet. The measures include increasing fish and seafood catch to 4 million MT by the end of 2009, a 30 per cent increase above 2008. A second measure increases the investment by 2 billion rubles ($645 million) under the Federal targeted program for fleet renovation, upgrading port infrastructure and ship building.
The Federal Fishery Agency believes that one of the positive trends in the seafood market in Russia is the dwindling share of imported fish. It is expected that imported share will annually drop of 15-20 per cent in comparison with 2008. Trade During January-March 2009, imports of fish and seafood dropped by 23 per cent in value compared
Trade
During January-March 2009, imports of fish and seafood dropped by 23 per cent in value compared to the same period in 2008. The sharpest decrease of 67 per cent occurred in the “other seafood” category (HTS 0307), followed by crustaceans (HTS 0306), negative 43.7 per cent; and in dried and salted fish (HTS 0305), negative 40 per cent.
The U.S. import share during this period plummeted by 61 per cent and trade sources confirmed declining volumes of fish and seafood from the United States since late 2008. However, these sources also estimate that local demand for fish will stabilize by the end of 2009 and will improve the outlook for fish imports.
| Table 1: Russia: Imports of Fish and Seafood (HTS 03), by Country, 2007-2009, First Quarter only, in $ million |
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|---|---|---|---|---|
| Rank | Country | 2007 | 2008 | 2009 |
| 0 | World | 397,987 | 452,927 | 348,249 |
| 1 | Norway | 147,358 | 168,979 | 186,185 |
| 2 | United Kingdom | 21,218 | 30,893 | 32,747 |
| 3 | Vietnam | 37,013 | 37,019 | 21,373 |
| 4 | Denmark | 29,584 | 26,539 | 19,761 |
| 5 | China | 26,965 | 34,009 | 17,926 |
| 6 | Estonia | 6,110 | 5,147 | 7,538 |
| 7 | Canada | 10,011 | 12,938 | 7,359 |
| 8 | Ireland | 0,033 | 5,859 | 7,268 |
| 9 | Chile | 24,419 | 17,885 | 5,278 |
| 10 | United States | 10,979 | 12,164 | 4,875 |
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Source of data: Customs Committee of Russia
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| Table 2: Russia: Imports of Fish and Seafood by Category, 2007-2009, First Quarter only, in $ million |
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|---|---|---|---|---|
| Category | HS Code | 2007 Jan-Mar | 2008 Jan-Mar | 2009 Jan-Mar |
| Fish And Seafood (Total) | 03 | 398.0 | 452.9 | 348.2 |
| Frozen Fish, Excluding Fillet | 0303 | 203.8 | 193.0 | 172.3 |
| Fillet, Other Fish Meat | 0304 | 203.8 | 193.0 | 172.3 |
| Fresh Fish, Excluding Fillet | 0302 | 59.1 | 84.0 | 74.7 |
| Crustaceans | 0306 | 43.6 | 50.0 | 28.2 |
| Other Seafood | 0307 | 11.1 | 21.0 | 6.9 |
June 2009
