Why Russian fish exports are falling
Sanction pressure and import duties on Russian fish in the EU and the UK are accelerating the decline in exports. If in the first half of 2024 the decline in the volume of supplies abroad was estimated at 7% year-on-year in physical terms, then in eight months the gap reached 13%. This is compounded by the decline in the cost of Russian fish sold abroad at a significant discount.
The volume of fishery exports from Russia in January-August 2024 amounted to 1.1 million tons, a decrease of 13% year-on-year, said Artem Daushev, assistant to the head of Rosselkhoznadzor, at the International Fishery Industry Forum. As TASS reports, citing the official, deliveries are made to 51 out of more than 70 possible countries. The Association of Fishing Fleet Owners (AFFO) estimated the decrease in fishery exports in January-June 2024 at 7% in kind year-on-year and 13% in monetary terms.
Aleksey Osintsev, President of the Association of Russian Fishermen, does not rule out that the decline by the end of the current year will be more pronounced. Among the negative factors, the expert names the closure of the US market and duties on Russian products in the EU and Great Britain: their rates for white fish are 13.7% and 35%, respectively. "Producers also cannot obtain permission to supply from new vessels or factories to the European market; the EU simply does not consider such applications," adds Mr. Osintsev.
Against this background, the importance of Asian markets is growing for Russian exporters.
Last year, China accounted for 50% of fish exports from the Russian Federation, according to estimates by the All-Russian Association of Fishery Industrialists (VARPE). Although in January-August 2024, according to the Fish Union, imports of Russian fish and seafood to China decreased by 5% in kind and by 12% in money. For example, supplies of frozen pollock to the country during this period decreased by 12% in weight and by 30% in money. According to the Fish Union, there has also been a decline in exports of Pacific herring due to high demand on the domestic market and cod due to a reduction in its catch volumes. A similar trend is also noted by the President of VARPE, German Zverev, noting with reference to the customs statistics of the PRC that in January-July 2024, supplies of frozen pollock from Russia to the country decreased by 31% year-on-year, to $334.4 million, frozen cod - by 17%, to $193.6 million. The total volume of supplies of fish products decreased by 11.5% year-on-year, to $1.5 billion. Although the Fish Union notes that for some items, for example, fillets and surimi from pollock, ivasi and crab, supplies to China are still growing.
Alexey Osintsev attributes the difficulties in Asian markets to the zero import duty on products from a number of countries in China and South Korea, while for Russian exporters it is 10%.
“In South Korea, preferential conditions apply to pollock from the USA, in China – to products from Norway, Chile, New Zealand and Iceland,” the expert explains.
German Zverev draws attention to the change in the market situation for China itself due to the extension of US and EU sanctions to products made from Russian fish. For a long time, China purchased Russian raw materials for processing and subsequent re-export to the US and EU, which are leaders in consumption volumes. But in the first half of 2024, fish and seafood exports from China to the US decreased by 18.5% year-on-year, to $585.8 million, to the EU - by 54%, to $380.4 million. This, according to Mr. Zverev, also contributed to the decrease in purchases of Russian products. He considers the second difficulty to be the decrease in the solvency of Russian consumers.
Alexey Osintsev also considers the duties on fish exports, which have been in effect since October of last year and are tied to the dollar exchange rate, to be a problem for exports (see “Ъ” of September 16). German Zverev notes that the profitability of deliveries abroad is significantly decreasing. This is especially noticeable for pollock: in the first seven months of the current year, its cost has decreased by 22% year-on-year.
