Crab spoils at the border – Newspaper Kommersant No. 172 (7373) of 09/19/2022

Russian crab fishers fear a new export complication under the sanctions. Due to the ban on the supply of seafood to the US and EU, crab fishermen in the Northern Basin may redirect their products to the Chinese market this season. But this threatens to overload the main checkpoint used for the export of live crab to China. Delaying cargo for one day can lead to a sharp drop in the cost of goods, market participants warn.

Kommersant sources on the market told Kommersant about new risks for the export of live king crab. According to them, the season of active resource extraction in the Far East began in September, and the main export of live crab goes to China through the Kraskino customs checkpoint in Primorsky Krai. But its capacity is limited: there are only four lines of control in Kraskino, and due to the deterioration of the infrastructure and constant repairs, only one is stable, Kommersant’s interlocutors say.

According to Kommersant’s sources, in July the line here reached 110 trucks, which corresponds to five days of waiting, and with the start of active exports, the traffic jam can stretch up to 150 trucks. In addition, the interlocutors of Kommersant note that this season, crab fishermen of the Northern Basin will start shipping through the point, who faced a sales problem after the ban on the supply of seafood from the Russian Federation to the United States and the EU under sanctions due to military operations in Ukraine. Rosrybolovstvo forwarded Kommersant’s questions to the Federal Customs Service, where no comments were provided.

Ilya Bereznyuk, managing partner of Agro & Food Communications, notes that live crab is a specific product that is in demand mainly in China. A representative of the Russian Crab Group (owned by Gleb Frank and a group of top managers) says that Kraskino is a priority point for transshipment, since it is located near seaside ports, and on the Chinese side, the products reach the receiving points with fresh sea water as quickly as possible. According to the company, each day of downtime, depending on the type of crab, leads to a drop in prices for the product by up to 50%. According to Alexander Duplyakov, president of the Association of Crab Miners, 13.6 thousand tons of live crab were transported through Kraskino in 2021. The Association of Pollock Producers estimated the total export of live and frozen crabs from the Russian Federation for this period at 75 thousand tons.

Sergey Nesvetov, executive director of the North-West Fisheries Consortium (NWRC; the largest crab harvester in the Northern Basin), says that after the US and EU shutdown, the markets of China, South Korea and Japan remained the only comparable ones in terms of consumption and purchasing power of the population. Crabs harvested in the Northern Basin are likely to travel to Southeast Asia, and the market will become more competitive, he notes. But, Mr. Nesvetov clarifies, the SZRK is considering, first of all, deliveries by sea and in a frozen form.

According to a Kommersant source, exporting live crabs by sea after China imposed restrictions due to the COVID-19 pandemic has become almost impossible. In addition, for delivery to China, ships have to be distracted from fishing for up to 10–12 days. Georgy Martynov, President of the Association of Fisheries Enterprises of Primorye, says that this reduces the profit of market participants, which was calculated in terms of loans taken and investment obligations, so that the situation for business could become critical.

According to Alexander Duplyakov, the issue could be resolved by building a new border crossing, capable of not only coping with the current traffic, but also ensuring its potential growth. Georgy Martynov adds that a few years ago, large crab fishermen were ready to independently build additional infrastructure and a separate strip for perishable products under the public-private partnership mechanism. But the idea did not find support from government agencies, he notes. Ilya Bereznyuk adds that the agreements between the Russian Federation and China on facilitating supplies can also remove risks for exports.

Alexey Polukhin