Mandatory catch clearance to boost supply for domestic market despite feared logistic bottlenecks

December 16, 2008 11:06

As of the 1st of January 2009 according to the Federal Law "On Fishery and Conservation of Aquatic Biological Resources" aquatic biological resources caught (captured) during commercial fishery in the inland waters of the Russian Federation, in the territory of sea of Russia, in the continental shelf of Russia, in the Russian EEZ and the products of their processing shall be delivered on the customs territory of the Russian Federation. It is expected that this will increase supplies of seafood product on the domestic market by 20 - 30% in 2009 as well as increase shipping by railways by 30%, reports ( with reference to Gudok.

However, the fishermen and customs officers in the Russian Far East have voiced doubts as regards the capacity of Russian Railways as to transport the increased volume of seafood products. For example, in the first 10 months 2008 the Far East Railways transported 375,000 tonnes of seafood cargoes, while the catch volume in the region amounted to more than 1.7 million of tonnes.

According to a spokesman of the Russian Railways, there will be no problems with transportation of perishable cargoes by the refrigerator cars. There are 40 - 70 cars of Refservice Company available daily and 70 - 90 cars of other shipping companies.

According to a spokesman of Refservice Company, the changes of the Federal Law may reduce the losses of the railway companies whose specially equipped cars are held reserved for the most part of the year (the cars are in the highest demand during the hot season in August-September).

At the same time the company is afraid that the seafood products originating from the Far East will not be sold out because of high transportation costs accompanied by the extra charges for agent services and other participants of the selling process. As a result, the end price of the seafood products may be increased by 50% (the share of the railroad charges accounting for 4.5 - 8.2% depending on the fish species).

The Refservice Company has been flexible to charge transportation of seafood at lower tariffs (40% down on the general transportation prices). In particular, in September 2008 the price of Refservice Company for transportation of reefer section from Vladivostok to Moscow did not exceed RUB1.1 million while other shippers offered the tariffs of RUB2.01 million.

In early December 2008 the Russian Railways disputed the proposal of the Federal Fishery Agency to drastically reduce seafood transportation tariffs. According to the Refservice Company, the volume of railway transportation in the first 10 months of 2008 decreased by 6.5% in comparison with the same period of 2007. In November 2008 the transportation volumes came down twice in comparison with October 2008 level of 32.7 thousand of tonnes. At present more than 33.2 thousand tonnes of seafood are left in the inventories in the sea port of Vladivostok (while the capacity of the storing facilities amount to 45,000 tonnes).

Meanwhile, according to some market participants in the Far East the high railway tariffs are not the only reason not to use railways for transportation of seafood. Another problem of the seafood sellers in the situation of the global economic downturn is the absence of credits needed to cover transportation costs.

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