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Friday exclusive - EastRussia industry overview
The fishing industry is stormy by all nine points - fishermen are forced to lower prices in order to somehow realize their catch. Pollock fishing is in full swing, and there is nowhere to store and process the catch, because China has not yet opened its ports for our fish.
Fisheries industry: industry analyst
After growing catches and increasing exports in 2020, at the beginning of this year, the fishing industry faced a serious problem with the suspension of fish exports to China, which is the main market. In this regard, at the government level, the possibility of providing additional support and taking measures to ensure storage and marketing is being discussed, and the fishery industry is ready to revise the production plans. Under these conditions, the question of the need to develop coastal fish processing is again raised.
The export of fish products from the Far East in 2020 increased by 6%, amounting to 1,6 million tons of fish and seafood worth 3,47 billion rubles. The largest share in the structure of exports is frozen fish (about 90%), the supply of which increased by more than 7%. Over 4% of the export structure is made up of crustaceans (including crabs - 3,5%), the volume of supplies of which decreased by almost 8%. The share of fish fillets in the total export volume amounted to 3,7%, having increased by 8,7% over the year. A significant part of the exported fish products is supplied through the ports of the Primorsky Territory (1,56 million tons). Last year, the volume of exports of fish and seafood through Primorye increased to South Korea (3,1 times, to 569,1 thousand tons), as well as to the United States (15 times, to 1 thousand 125,8 tons).
One of the significant problems of the fish industry at the beginning of this year was the suspension of the export of fish products to China due to the pandemic. At the end of 2020, China, due to the threat of the spread of COVID-19, stopped accepting Russian fish products at the Dalian seaport, the last one available for export (the Qingdao port was previously closed). The PRC explained its decision by the detection of the COVID-19 pathogen in samples of frozen Russian fish products. For this reason, even before the closure of ports, the rules of compulsory disinfection were introduced for products entering the Chinese market. Moreover, the PRC accounts for more than 60% of Russian exports of fish products.
The ports of South Korea, which were considered as an alternative to the Chinese, turned out to be overloaded. At the same time, the domestic market of the Russian Federation is significantly smaller in volume (in the first quarter of the year there is an opportunity to accept only up to 280 thousand tons), in addition, there is a shortage of processing and refrigerated storage capacities.
The current situation leads to a decrease in prices for fish products. Under these conditions, the fishing industry is expressing concern that the Chinese side may resume imports only after the maximum reduction in the price of products, which will be unprofitable for manufacturers. In particular, wholesale prices for pollock in January fell by 6,5% to 72 rubles per kilogram, while the usual price is 100 rubles per kilogram. At the end of January (in the period from January 18 to January 24), the Federal Agency for Fishery recorded a decrease in wholesale prices for pollock by 9,7% - to 65 rubles per kilogram. Against this background, fishing enterprises are considering the possibility of reducing the catch volumes in the autumn-winter season of 2021. The reorientation of supplies to the markets of the countries of Southeast Asia and Africa is associated with logistical difficulties and the need to carry out additional marketing activities in a short time.
By January 18 of this year, about 108 thousand tons of pollock were caught in the Far Eastern basin during the Sea of Okhotsk fishing season - 17,5% less than in the same period in 2020, and as of January 25, 141,5 thousand tons of pollock were caught , which is 18,8% less than in the same period in 2020. At the same time, the catch of herring and cod increased by 5% (up to 32 thousand tons) and by 29% (up to 10 thousand tons), respectively.
The government took up the solution to the problem of export restrictions. At the beginning of the year, Deputy Prime Minister V. Abramchenko instructed Rosrybolovstvo and Rosselkhoznadzor to negotiate with the PRC authorities regarding the opening of ports for Russian fish products. It was also instructed to convey to Russian exporters the comprehensive requirements of the Chinese side to prevent the spread of coronavirus, to establish control over the testing of crew members of Russian ships and the implementation of the requirements by Russian enterprises. Earlier, the All-Russian Association of Fishery Enterprises and Exporters (VARPE) insisted on the need for a dialogue between Rosselkhoznadzor and Rosrybolovstvo with the relevant departments of China.
At the end of last year, Deputy Prime Minister and Presidential Plenipotentiary in the Far Eastern Federal District Y. Trutnev appealed to the Chinese authorities with a request to lift restrictions on the export of Russian fish products, promising that the Russian side will take everything necessary to prevent cases of cross-border spread of COVID-19 measures. It should be noted that the Federal Agency for Fishery agreed to fulfill the conditions of the PRC in the export of fish products. The head of the department, I. Shestakov, asked Rospotrebnadzor and the Rosselkhoznadzor to promptly provide the fishing and transport companies with recommendations that meet the requirements of the Chinese side on the mandatory disinfection of products.
Additional measures were also proposed to support the industry during border closures and export restrictions. These include the organization of purchases of fish products by the state. The corresponding proposal was voiced by the President of VARPE G. Zverev and supported by the head of the Federal Agency for Fishery I. Shestakov, as well as major market players (GC "Dobroflot", MC "Norebo"). The proposed government intervention in the fish market is similar to the mechanism used to maintain prices in the grain market - when selling or buying grain from the government fund. This mechanism in the fishing industry should stimulate the demand for fish products from budgetary institutions.
At the same time, there are doubts about the effectiveness of this measure. Thus, the Association of Fishery Enterprises of Primorye (ARPP, head - G. Martynov) noted that there are no sufficient capacities for the purchase of products by the state for further storage. The ARPP offered to buy products (up to 700 thousand tons of pollock worth about 50,4 billion rubles) to transfer it to spheres that provide free food, such as health care, education and the army. As another option for selling fish, the reorientation of supplies was considered - the direction of part of the catch to the north and to the central regions of the country. At the end of January, there were 1 free containers in the Far East, which is enough to supply 250-300 thousand tons of pollock. Nevertheless, the Union of Fishermen of the North (head - K. Drevetnyak) noted that the supply of a relatively cheap resource over long distances is unprofitable, and fish processing factories in the north of the country are not adapted for processing pollock.
The Federal Agency for Fishery, in turn, announced that it had reached an agreement with Russian Railways on the provision of refrigerated containers to be concentrated in the coastal cities of the Far Eastern Federal District. Relevant negotiations were also held with Rosrezerv and the Russian Union of Refrigeration Industry Enterprises (Rossoyuzpromkholod). In particular, a request was sent to the union to find an opportunity to store up to 100 thousand tons of fish for a period of three months.
In the long term, the development of fish processing within the framework of the program of investment quotas should solve the problem of dependence on supplies to the PRC and change the raw model of export. Yu. Trutnev instructed the Ministry of Agriculture, Rosrybolovstvo and Rosselkhoznadzor to report on the results of the implementation of the program for the provision of investment quotas for the extraction of aquatic biological resources and to work out the issue of increasing the volume of processing of fish products by Far Eastern enterprises. The Federal Agency for Fishery is called upon to report on the free refrigeration facilities available in the Far Eastern port cities, to provide information on the security measures taken to prevent the spread of coronavirus and on the measures taken to restore fish exports to China. To date, nine onshore fish processing plants have been commissioned under the investment quotas program (in the Primorsky and Kamchatka Territories, in the Sakhalin Region). At the same time, according to the head of VARPE G. Zverev, it takes up to five years to create a developed coastal fish processing infrastructure (including the creation of a berth infrastructure, refrigeration facilities).
Problems with export deliveries are pushing industry players to consider the possibility of creating associations. This applies, in particular, to the Nakhodka base of active sea fishing (NBAMR, controlled by the former governor of Primorsky Territory S. Darkin) and Okeanrybflot JSC (owners - Senator V. Ponomarev from Kamchatka Territory and Deputy of the Kamchatka Parliament I. Yevtushok). Okeanrybflot appeared in the list of NBAMR affiliates at the end of last year. NBAMR has quotas for catching 181 thousand tons of fish resources per year, and Okeanrybflot owns quotas for 282,8 thousand tons of fish resources per year. The cooperation of large quota holders can help reduce risk, increase opportunities for new investment quotas, and provide them with marketing opportunities.