Russian trout farms to challenge domestic market share of Norwegian and Chilean competition

December 21, 2007 12:48
Commercial farming is considered to be one of the most dynamically developing industries in the economy of Russia'a Republic of Karelia, bordering on Finland. Because at present about 70% of Russian cage trout are farmed in Karelia, head of analytical group of Norge-Fish Ltd Timur Mitupov writes for http://www.fishnet-russia.com/ (https://www.fishnet.ru/).

According to Norge-Fish Ltd, in 2006 the volume of trout production in Karelia reached 6,500 metric tons. At the same time the total capacity of trout market in Russia amounts to at least 63,600 metric tons, including 85% or about 55,000 metric tons of import and 15% or about at least 8,600 metric tons of domestic aquaculture by a very conservative estimate. It is difficult to assess the Russian trout production more exactly because a great amount of multitude small farms has arisen in the last few years. Besides, several important projects are definitely in the making. For example, the Russian Sea Group of Companies has invested into a full cycle project in Karelia to farm, process and market trout of own production.

At the meeting in the middle of December 2007 the Committee of the republican parliament on agro industrial policy and rural development discussed the situation in trout farming.

As was noted at the meeting, in 2007 the domestic market turned out to be flooded with cheap salmon from Chile and Norway, resulting in the ex-farm price reduction of Karelian products. Many fish farming enterprises of the Republic may finish the year with very small margins. The Karelian authorities are trying to give state support to the industry but it doesn't compare with the industry's production costs, the farmers complain.

In February 2007 Russia's First Vice-Premier Dmitry Medvedev urged the regional leaders responsible for the realization of national project "The Development of Agro-Industrial Complex" to boost financing of the aquaculture. By this statement Dmitry Medvedev, who is now running presidency, predetermined the policy of the state towards support of further development of seafood industry. In the nearest future it is planned to beef up the material and technical basis for artificial fish farming in Russia by means of soft bank loans.

Thus the Russian aquacultural industry has got an opportunity for further development and growth. Currently in the food sector of economy the commercial trout farming is showing the highest profitability which on the average amounts to 30-35%. With the production cost of 80-90 RUB per kilo, sales price can amount to 120-160 RUB depending on fish size, catch season and market conditions.

Thus, analyzing the trends and growth rates of aquacultural development in Karelia, it can be assumed that in the nearest future the Karelian trout will put competitive pressure on trout import from Norway and Chile and take up some of its share in the consumer segment of the Russian seafood market.

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