Review of the Russian Market of Fresh and Processed FishResearch by Information Agency “Credinform”
FISH PRODUCT CONSUMPTION
Many people know how healthy fish is – according to modern nutritionists, it is the most preferable source of protein. It is recommended to include fish and seafood in the diet not less than 2-3 times per week. During the cooking process fish loses less than 20% of water (meat loses up to 40%), and therefore its flesh is juicy and tender, pleasant for any stomach. Fish protein contains less connective tissue and thus is easily processed by digestive enzymes. This ensures virtually full digestibility. Fish contains few carbohydrates and has no excess fat, and its calorie content is 4-5 times lower than that of meat products. Unlike animal fat, fish oil is healthy: it contains omega-3 and omega-6 polyunsaturated fatty acids necessary for the cardiovascular system. In addition, fish is rich in vitamins, inositol, pantothenic acid and a large number of micronutrients.
Unfortunately, compared to other developed countries, fish and seafood consumption in Russia is very low. The current level is not even sufficient in terms of physiological norms of fish consumption recommended by the Russian Academy of Medical Sciences – 24 kilograms per capita per year. All in all, the factual value of this indicator for the country in 2015* amounted to 21.2 kilograms.
Demand is not only affected by gastronomic preferences of the Russian residents (Íà ñïðîñ îêàçûâàþò ñâîå âëèÿíèå íå òîëüêî ãàñòðîíîìè÷åñêèå ïðèñòðàñòèÿ æèòåëåé ñòðàíû (formed by historical and national features), but also by the price aspect – salmons, for instance, are typically expensive and thus unaffordable for poorer groups of the population. In addition, fish consumption is low in regions with an undeveloped river network and areas located far from seas and oceans.
Demand for fish and seafood is highest among residents of far eastern regions of the country – fish plays an important role in their diet. For instance, in Primorsky Krai average per capita consumption of fish in households amounts to 35.3 kilograms per year, and in Magadan region the figure reached 35 kilograms. Only 22 federal subjects of Russia out of 85 meet the Russian norm of fish consumption.
Moscow is forty-seventh in average per capita fish consumption with the figure of 20.8 kilograms per year. Saint Petersburg is even lower, occupying the seventy-second position with 16.8 kilograms.
The specifics of the national cuisine as well as the lack of seas determined the lowest rate of fish consumption in the Tyva Republic and the Republic of Kalmykia – 6.8 and 10.5 kilograms respectively.
There is a more than 5-fold difference between the leader (Primorsky Krai) and the outsider (Tyva Republic) in terms of demand for fish.
DOMESTIC PRODUCTION VOLUMES
In 2016, 1,140 thousand tons of live, fresh and chilled fish were supplied to the market in Russia, which is 3% lower than in 2015. Production reached its peak in 2013, when the figure was reaching 1,461 thousand tons. Negative dynamics were caused by bans on fish imports (primary raw materials) from countries of the EU and Norway as well as a decline in demand due to increasing prices and decreasing real incomes.
On the other hand, last year production of processed and canned fish increased somewhat. Domestic companies processed almost 4 million tons of fish, which is 1% higher than the level of 2015.
AVERAGE RETAIL PRICES
The most expensive fish product is salmon caviar, prices for which reached 3,271 rubles per kilogram in January–March 2017, which is 8.2% higher than the value of the similar period of the previous year.
Canned fish in tomato sauce (350 grams) can be bought for 64 rubles on average.
In the first quarter of this year, the most significant jump in prices was observed in chilled salmon and frozen gutted salmon (+15.9%) as well as salted and smoked fish delicacies (+12,8%).
Clearly, accelerating inflation processes concerned the fish market the most, which is explained by the dependence of this segment on imported raw materials and equipment (all this is reflected on the final costs) as well as the eliminated competition from Norway and countries of the EU as a result of counter-sanction measures taken by Russia.
Russian fresh and processed fish exports in 2016 reached 1,519 thousand tons, having exceeded the level of 2015 by 9.8%, whereas imports keep declining: in 2016 they dropped by 8.4% to 516 thousand tons.
The overall value of domestic exports during the given time period amounted to $ 3.1 billion. The monetary volume of exports declined by 8.4%. Fish imports in monetary terms equaled $ 1.6 billion, which is 2.9% higher than the data for 2015.
Given the above, Russia has a positive trade balance in the fish market: exports exceed imports by $ 1.5 billion.
Such a significant decline in imports in physical terms was connected with two factors: counter-sanctions on fish products from Norway and the EU and ruble devaluation, which led to a significant increase in prices for products imported and, as a consequence, a decline in demand for them by Russian consumers.
It is obvious that domestic producers used the favorable foreign trade conditions and have been increasing fish and fish product supplies abroad for the third year in a row.
The Faroe Islands**, China and Chile account for 52.6% of imports of processed and non-processed fish today, which equals 270 thousand tons in volume terms. The top 5 leaders also include Belarus on the fourth position – clearly, this country, which is landlocked and has no developed river network, serves as a channel for banned products from the EU and Norway supplied under Belarusian trademarks. 61 countries and territories total supply fish products to Russia.
Before the counter-sanctions, Norway was Russia’s main fish importer – during the incomplete 2014 (the year of the embargo) it supplied 133 thousand tons, or 14.9% of the overall import volume, into the Russian Federation.
The structure of fish and seafood imports in the Russian Federation is highly diversified: 52.7% of the weight falls on frozen fish; 12% is fish fillets; 11.9% – cooked and canned fish and caviar; 6.3% – crustaceans; 5% – fresh or chilled fish.
The main country receiving 54.1% of the domestic exports of fish and fish products is China – last year the volume of supplies to this country reached 822 thousand tons in volume terms.
The main fish product category exported is frozen fish – 86.8% of the volume in physical terms.
KEY MARKET PLAYERS
According to the data in the Globas-i base (product by Information Agency “Credinform”), the leader of the top 5 producers in annual revenue is “Baltiysky Bereg (Baltic Shore)” CJSC (10.1 billion rubles), and the leader in sales profitability is “Meridian” PJSC (21.5%).
The undisputed leader in annual revenue is “Okeanrybflot” PJSC (16.1 billion rubles), whereas the highest product profitability is demonstrated by “Arkhangelsky Tralovy Flot (Arkhangelsk Trawling Fleet)” PJSC (126.6%). It is interesting to note that all the leaders of the industry demonstrated considerable growth in revenues, which is due to imported fish from Norway and the EU having left the Russian market.
In conclusion, one can state that against sanctions in the domestic fish industry positive shifts can be observed. Fish processing is developing at a fast pace compared to other sectors of the food industry. However, even in the short term producers may face challenges: fish processing equipment is usually imported, which leads to additional costs in the conditions of ruble devaluation.
* Latest data available.
** Part of Denmark but not part of the EU.
Information agency “Credinform”