Producers of pollock and herring ask for subsidies for the delivery of fish to the center of the country
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Producers of pollock and herring are asking for subsidies from the budget for the transportation of their products from the Far East to the center of the country. According to various estimates, this will require 500-700 million rubles. The measure will reduce retail prices for fish by 10% in regions remote from fishing areas, the companies promise. But the market is pessimistic about the prospects for benefits due to the budget deficit and the need to export huge stocks of salmon after a successful fishing season.
The Association of Ship Owners of the Fishing Fleet (ASRF) proposes to the Ministry of Agriculture, the Federal Agency for Fishery, the Ministry of Transport to subsidize the transportation by rail from the Far East to the center of the country of frozen pollock, herring, minced meat from these fish, squid, as well as fishmeal, follows from the copy of the letter available to Kommersant organizations. The ministries and the agency confirmed receipt of the letter. The Federal Agency for Fishery promised to consider the initiative, the Ministry of Agriculture clarified that “preferential transportation of pollock is already provided.”
The transportation of pollock within the country has already been subsidized several times: first during the pandemic, when China, a major importer of this fish, periodically blocked supplies from the Russian Federation to its ports, then at the end of 2022 and the beginning of this year. The new request for benefits coincided with pollock fishing season starting in autumn. In addition, for Russian fishermen in general, exports to the EU and US markets are blocked after the introduction of sanctions in 2022.
For the next stage of subsidies, according to ASRF estimates, no more than 500 million rubles will be required. at the rate of 7 rubles. for 1 kg.
Executive Director of the Association of Industrial and Commercial Enterprises of the Fish Market Alexander Fomin estimates the possible costs at least 700 million rubles.
In the cost of fish products, the share of transportation costs is about 11%, or 20–24 rubles. per 1 kg, and its subsidization will reduce prices by at least 10%, says ASRF President Alexei Osintsev. According to him, the cost of transportation increases annually by 15-30%. Russian Railways JSC clarified to Kommersant that the state-owned company’s tariff has not changed since the beginning of 2023, but “the cost of providing rolling stock is determined by private companies on market terms and is subject to seasonal fluctuations.”
The proposal of the ASRF is unlikely to comprehensively solve the problem with the increase in retail prices for fish, the interlocutor of Kommersant from among the retailers believes. According to him, there is a noticeable shortage of refrigeration capacities in the center of the country, which leads to an increase in the cost of storing these products. ASRF acknowledges in its letter that the difference between wholesale and retail prices in the center of the country is significant. Thus, as of June 1 of this year, in Moscow and St. Petersburg, the average cost of frozen gutted pollock was 176–230 rubles. per 1 kg at wholesale prices from manufacturers – 70–95 rubles. for 1 kg, a fillet of this fish is about 300 rubles. and 180–230 rubles. per 1 kg respectively.
Kommersant’s source on the market says that pollock producers are probably afraid of an increase in transportation tariffs due to the need to bring a new salmon catch caught this summer to the center of the country from the Far East. “If a large volume of salmon is exported to other regions, then, on the contrary, this will free up capacities for pollock on the eve of the Putin season,” Alexander Fomin believes. According to him, about 3 billion rubles will be required to export salmon to the center of the country to subsidize transportation tariffs. This season, the cost of transporting salmon has doubled, says the manager of the Dobroflot Group of Companies Alexander Efremov.
A Kommersant source in the industry is pessimistic about the prospects for allocating subsidies to the fishing industry, given the budget deficit.
The last tranche in the amount of 2.5 billion rubles. for the preferential transportation of agricultural products was almost completely sent to grain producers, he notes, adding that the fishermen have internal opportunities to optimize logistics costs. Producers of pollock, according to Mr. Fomin, profitability is 40-60% – “they can afford to reduce wholesale prices.”
ASORPS President Mikhail Sinev adds that a number of logistics operators give discounts to manufacturers up to 240 thousand rubles. for a 40-foot container when transported from east to west of the country. Moreover, the Federal Agency for Fishery adds, producers of fish caught in the Far East and the north of the country can receive a tax deduction from July this year when paying fees for the use of aquatic biological resources.
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