Everybody knows about health benefits of fish/seafood. However, in Russia consumption rate of this category is far lower in comparison to other developed countries. Consumption norm for fish/seafood recommended by Russian Academy of Medical Sciences constitutes 23.7 kg per person annually. Actual consumption has not reached this norm yet; in 2014 per capita consumption of fish/seafood in Russia (with consideration of Crimean Federal District) constituted 20.9 kg.
In 2014 Russia harvested and processed 3,644 thousand tons of fish/seafood (canned and preserved fish/seafood and also ready meals made from them not considered). In 2013 same index constituted 3,681 thousand tons. Thus, Russia saw 1% year-to-year decline of production volume in the review category.
In January–March 2015 production volume of fish/seafood in Russia constituted 1,095 thousand tons, by 5.8% more than during the same period of 2014 (1,034 thousand tons). This is quite a notable improvement for Russian fish industry in the context of worsening macroeconomics and deepening downswing of economy in 2014. Increase of domestic production was mainly determined by increased cost of imported products driven by sanctions and devaluation of ruble.
The largest segment in domestic production of fish/seafood in 2014 was frozen fish with 59.4% of domestic production in volume. Other segments were fresh or chilled fish (16.5%), live fish (12.4%), frozen fish fillet (2.7%), smoked fish (1.6%), frozen fish liver, roe and soft roe (1.3%), cold smoked fish (1.3%). The rest of domestic production (4.7%) was provided by other kinds of processed fish/seafood including salted fish, lightly salted fish, dried fish, semi-hot smoked fish, fish in brine, etc.
Last year decline of domestic production was observed in such segments as frozen fish (by 1.1%), fresh and chilled fish (by 8.5%), live fish (by 32.1%), frozen fish fillet (by 3.4%)*.
On the other hand, increase of domestic production was demonstrated by the following segments: smoked fish (by 1.3%), dried fish (by 21.2%), fresh or chilled fish fillet (by 24.2%), fish in brine (by 74.8%).
Talking about prices for fish we should mention that retail prices are far higher in comparison to manufacturer prices. For instance, in March 2015 live fish was sold by manufacturers at 80 rubles/kg while in retail same fish was offered at 166 rubles/kg. In other words, retail margin exceeded 100% and constituted 2.1 times. Same situation is observed in other segments of fish market.
In March 2015 the average retail price for chilled and frozen salmon constituted 509 rubles/kg, by 43% more than in March 2014. The average prices for salted and smoked fish was 331 rubles/kg (+27.8%), for fish fillet – 267 rubles/kg (+36.4%), for live fish – 166 rubles/kg (+25.2%), undressed frozen fish – 135 rubles/kg (+40.5%).
Thus, growth of retail prices for fish last year exceeded the rate of food inflation by several times. It is obvious that inflation affected fish market more than other markets. This evidences for dependence of this industry upon imported raw materials and equipment which of course affects cost of ready products.
KEY MARKET PLAYERS
The group of the largest players in segment of fish harvesting in Russia includes: “Okeanrybflot” OJSC (Kamchatka Territory), “Unix” LLC (Murmansk Region), “NBAMR (Nakhodka Active Marine Fishery Base” OJSC (Primorsky Kray), “MTF (Murmansk Trawl Fleet)” PAO (Murmansk) and “Kurilsky Rybak (Fisherman of Kuril Islands” CJSC (Sakhalin Region). Small aggregate share controlled by the named companies implies absence of monopolist supplier and operation of many smaller companies on the same market.
Meanwhile the group of main manufacturers of fish/seafood products has obvious leaders who already gained popularity among consumers: “Baltiysky Bereg (Baltic Shore)” CJSC (Saint Petersburg), “Meridian” PKP” OJSC (Moscow), “Flagman” LLC (Moscow Region) and others. Top five manufacturers control almost one third of annual sales.
In 2014 Russia exported 1,246 thousand tons of fish/seafood, by 13.8% less than a year before. Total cost of Russian export of fish/seafood during the review period constituted $ 2.2 billion, minus 6.9% against previous year. Thus, during last year export of fish/seafood from Russia declined both in volume and value.
Import of fish/seafood to Russia also declined both in volume and value, by 16.2%. Decline was mainly driven by such factors as acceleration of Ukrainian geopolitical conflict (which included sanctions and trade wars) and devaluation of national currency.
Main destination markets for Russian fish/seafood in 2014 were China, Republic of Korea, Netherlands, Byelorussia and Japan. These five countries received 95.3% of export volume (1,188 thousand tons).
Meanwhile import of fish/seafood mainly comes to Russia from Norway, Iceland, Chile, Faroe Islands and China; these countries controlled 67.2% of import volume or 437.1 thousand tons.
Russia mainly exports frozen fish (94%); the rest 6% of export volume falls on fish fillet and other kinds of fish.
Import of fish/seafood to Russia looks different: 68% of import volume is provided by frozen fish, 19% – by fish fillet, 13% – by fresh/chilled fish.
If Russian government provides support to domestic fish farming and fish harvesting it is quite possible that in some time Russian fish industry will be able to fill the dent left in fish supply by import ban and increased prices for imported products. The fact that in Q1 2015 domestic production of fish in Russia saw almost 6% increase evidences for increased activity of the review market.
* Segments ranked in descending order of total production weight.