Lack of destination diversity exposing FRE exports to fluctuations in external demand
Seafood exports from the Russian Far East (RFE) need greater diversity in terms of destination countries to make the sector less sensitive to demand fluctuations. The destinations structure was analysed, among other indicators, as ordered by the Ministry of Development of the Far East, in the research paper "Parameters of foreign trade turnover of fish products in the Far Eastern Federal district: volume, structure and value of exports", reports Megafishnet.com.
The Russian Far East is the largest center for the fishery and export of fish and shellfish in the country, exporting water bioresources to 49 countries. In 2019, the region exported 1583.8 thousand tons of seafood, which comprises 76% of the national total by volume and 68% by value.
Such data are provided by experts of the Vostokgosplan FOUNDATION in their work "Parameters of foreign trade turnover of fish products in the far Eastern Federal district: volume, structure and value of exports". The report covers indicators from 2015 to 2019.
Analysts note that the structure of fish exports from the Far Eastern Federal district by country is not diversified and is sensitive to fluctuations in external demand.
The top three export destinations in 2019 were China, the Republic of Korea and Japan accounting for 97% by weight and value. The share of the other 46 countries is about 3% in the structure of exports, which is insignificant, " experts say.
China was the main buyer with the volume of shipments hitting 1083.5 thousand tons.
However, the range supplied to this country is the widest and includes 19 product items. "More than half of all fresh, chilled fish, frozen fish and shellfish, dried, salted smoked fish, as well as fish meal were sent to this territory, " experts note. In the structure of export, the larger share in volume and value is occupied by the products of a low price category (84.5% of physical and 62% in value terms), while the largest volume was secured by export of Alaska Pollock (59% by weight and 48% by value).
Speaking about the specifics of exports to China from the Far Eastern Federal district, experts note the lowest price (among other leading buyer countries) for products of the average price category, including frozen fish: salmon and sea bass; shellfish: scallops and "cuttlefish, squid and octopus"; "dried, salted and smoked fish". The highest export price was for crabs (25% higher than the average export price from the Far Eastern Federal district) and holothurias (60% higher).
Analysts note that in 2019, about 70% of the physical volume and 50% of the value of the goods were sold to China. "In 2015-2019, China's leading positions have strengthened, mainly due to the increase in physical volumes of shipments with a decrease in product prices," experts explain.
Another country that is among the top three in the export of aquatic bioresources from the Far Eastern Federal district is the Republic of Korea. In 2019, the Republic became the second largest foreign market for the Far Eastern Federal district, where it shipped 400,9 thousand tons of aquatic biological resources, accounting for 25.3% of physical volume and 41.6 per cent of the value of total exports of fish products from the Russian Far East. "Export shipments of aquatic bioresources to the Republic of Korea have a wide range and include eighteen commodity items, with the exception of sea urchins and"fresh and chilled fish".
In the structure of exports, the main share in terms of physical volume is occupied by products of a low price category (54%). In terms of the total value, the maximum is accounted for by high-price segment goods (66%, including 49% for crabs), experts say.
At the same time, with a slight increase in the physical volume of product exports in 2015-2019 – by 16.6 thousand tons (by 4%), the increase in its total value was 50% and was provided by an increase in prices. "This increase in prices is justified, since the quality of exported products is growing (the share of products in the middle and high price segment in the export structure is increasing)," analysts say.
Japan was the third largest trading partner of the Far Eastern Federal district for the export of aquatic bioresources in 2015-2019. So, over the past 2019, 47.0 thousand tons of fish and seafood were shipped to this country, which accounted for 3% of the physical volume and 8% of the value of exports of aquatic bioresources from the Russain Far East. The range of exports to Japan includes 16 commodity items, while it does not include fish meal, holothurias, nor frozen Alaska pollock and halibut.
In the structure of exports to this country, the main share in terms of volume and value was occupied by products of the average price category with 80% by weight and 64% by value, including wild salmon at 57% and 52%, respectively. The rest of the export volume is made up of products from the high-price segment. The share of products from the low-price segment is insignificant and amounts to 3.5% by weight and 0.7% by value in the export structure.
"The peculiarity of exports to Japan is the high price of frozen fish supplied (fish is 40% more expensive on the average compared to the average export prices for the macroregion, fish offal – 2.7 times). On the other hand, one should note the low price of crustaceans supplied (crab is 26% cheaper than the average prices for the macroregion).
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