Russian demand for seafood set to grow futher

August 20, 2012 09:24

The demand for fish in Russia is projected to continue to increase, both in lower- priced and higher-priced segments, reports with reference to the findings of the GAIN Report dated 24 July 2012 prepared by USDA Foreign Agricultural Service.

Though Russia's wild catch has demonstrated steady growth for the past few years as fish stocks have recovered, seafood imports have continue to rise due to a combination of factors. According to GAIN Report, Russia's imports of fish and fish products equaled $2.36 billion in 2011, an annual increase of nearly 20 percent.

Experts referred to by GAIN attribute this trend to a combination of factors, including a lack of investment in the sector's processing infrastructure and strong domestic demand. As a result of poor processing facilities, Russia continues to be at a competitive disadvantage relative to other global producers. The inadequate state of processing infrastructure is especially detrimental to the sector, as a significant amount of fish imported from China was actually caught in Russia and shipped to China for processing. The government has tried to curb this phenomenon by introducing legislation that requires all fish and seafood caught within Russia's territory to be cleared by Russian customs. Processors in port cities such as Vladivostok have reported that this law has helped increase the level of domestic processing and reduced local prices. Moreover, local governments in the Far East have also increased funding support for land-based processing facilities.

At present, Norway remains the largest supplier of fish products to Russia, with exports totaling $935.4 million (39 percent market share), followed by China at $244.8 million (10 percent), Iceland at $161.5 million (6.8 percent) and Canada at $114.7 million (4.8 percent).

Between January and December 2011, fish and seafood imports from the United States decreased slightly, dropping by four percent when compared to 2010 and totaling $58.568 million. During this period, imports of frozen roe (red caviar) and fish liver remained strong and accounted for more than 50 percent of Russia's total imports for this category. However, higher levels of domestic catch of salmon in 2011 caused the import of these goods to fall 15 percent from 2010 to $18.120 million. Nevertheless, Russian demand for salmon and salmon roe from the United States will remain strong in the coming years.

Meanwhile a recently adopted Strategy for Development of the Russian Food Industry calls for Russia to expand its capacity to process high-value fish products and, among other initiatives, promotes a self-sufficiency target for Russia of 80-85 percent as well as setting catch and production targets.

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