Vietnam casts wider net for Russian fish and seafood market

There are some great reasons for optimism regarding expanding fish and seafood exports to the Russian market, says the Vietnam Association of Seafood Exporters and Producers (Vasep)
vietnam casts wider net for russian fish and seafood market

Market overview

Over the past two years, Russian consumption of fish and seafood has dropped, primarily due to the country’s fluctuating economic state. Historically, however, the market has been durable.

Over the past decade, Russia has been among the 20 top seafood importers around the globe. In 2014, for example, the United States Department of Agriculture (USDA), reported that Russia imported 885,000 tons of seafood and fish products valued at US$2.9 billion.

When broken down into product categories, USDA figures showed Russian imports split as follows: 50% frozen fish; 14.6% ready to eat/canned fish products; 14.2% fish fillets and other fish fare; 10% crustaceans and molluscs and 9.7% fresh and chilled fish.

Average consumption of fish and seafood in Russia over the past two decades stood at around 22 kilograms per capita per annum, according to the USDA.

Where does Russia get its fish and seafood?

Prior to the 2014 embargo, Norway had been the leading supplier to Russia of fish and seafood products, with a 19% market share. China followed with a 14% share and Chile came third with a 13.5% slice of the market.

However, Russia in now actively looking for new sources of fish and seafood because of the ban on imports from Norway and disease having taken a huge toll on the salmon industry of Chile.

Over the past year, Peru, Argentina and Ecuador as well as several other South American countries have increased their consignments of fish and seafood to the Russian market.

South Africa, has also once again started shipping fish and seafood products to the Russian market. Sea-Harvest, based out of South Africa, for example, has revealed that it has shipped around 500 tons of seafood products, valued at around US$3.5 million, recently.

The Faroe Islands has boosted its Russian fish exports nearly twofold. Deliveries from the small island nation totalled 20,000 tons in 2015. Given that previous shipments of Norway stood at roughly 60,000 tons, the accomplishment of the Faroe Islands is noteworthy.

Southeast Asia is also very much a focus for Russian importers, says Vasep. Local producers have expanded operations and signed contracts with Rosselkhoznadzor, the Russian body responsible for overseeing the quality of food imports, to increase delivery levels.

What fish and seafood are in high demand?

Salmon is the most popular seafood product among Russian consumers. Prior to the food bans being enacted, Norwegian producers had been shipping roughly US$533 million of salmon to Russia each year.

There remains a healthy demand for other species including trout, herring, shrimp and prawns, mussels etc. Whole Atlantic mackerel has also seen an increase in demand as the sanctions remain in place.

Per Vasep, local producers have been increasing their supplies of pangasius catfish to Russia.

The country’s largest pangasius catfish producer, Hung Vuong, has also announced it will be moving some of its operations into Russia through the acquisition of a 51% stake of Russian Fish Joint Stock Company.

The move, says Hung Vuong, is aimed at gaining market share and improving levels and quality of Alaskan Pollock in Russia.

Meanwhile a free trade agreement between Vietnam and Eurasian Economic Union (EAEU) that came into effect October 5, 2016 is expected to aid local companies in competing in the Russian market through the removal of tariffs (currently at 5.63%) and other trade barriers.

The EAEU comprises the five countries of Russia, Armenia, Belarus, Kazakhstan and Kyrgyzstan. Fish and seafood exports to the EAEU reached US$51.87 million (including Russian exports of US$51.55 million) for the eight months leading up to September of 2016.

The local fish and seafood industry is now hoping to catch a large share of the Russian market over the next few years, says Vasep, though admittedly the challenges in accomplishing that task are daunting.

Source: VOV

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