Fishing News

Russia’s announcement early today of the food commodity imports it will ban covers most frozen fish and seafood products.  However canned products under custom codes 1604 and 1605 will not be included.

The list of banned products covers all fresh and frozen fish, molluscs, and crustaceans.

The most immediate impacts for US producers will be felt on the West Coast, with hake, surimi, frozen pink salmon and salmon roe all significant export products to Russia.  All are now subject to the import ban.

For whiting/hake, US exports to Russia through June were worth about $4 million, and for all of 2013, the total export value was nearly $8 million.

For pollock surimi, shipments through June to Russia were worth $3.5 million, and for all of 2013 $8.2 million.

Salmon roe is where the most direct market impact might be felt because Russian imports of salmon roe represent a larger share of total production than they do for hake or surimi.  In 2013, total salmon roe exports to Russia were valued at $45.9 million, with a volume of over 7 million pounds.  Through June, shipments of salmon roe out of inventory from last year were worth $8.5 million, with a total volume of 1.1 million pounds.

The imposition of the import ban on salmon roe at the height of the roe production season is going to have a market impact, since the roe not shipped to Russia will have to be sold in Eastern Europe and Japan.  As a result, these markets will have to absorb greater supply, with a corresponding decline in price.

Frozen pink salmon will also be affected.  In 2013, virtually no frozen pinks were sold to Russia, but in 2014, that jumped from less than $250,000 to $3.3 million, making frozen pink salmon the second most valuable US export in the first half of the year, after whiting.

Canned pink salmon and other canned seafoods are not part of the ban.   However, Russia is not an export market for canned salmon from the US, and the exemption will have little impact.

The Russian sanctions on fresh and frozen fish and seafood were applied to the EU, Canada and Australia as well.  The biggest impact will be in Norway, where an immediate fall in salmon prices is expected.

Russia imported 6.6 billion NOK worth of seafood from Norway last year, of which 4.2 billion NOK was salmon.

Analysts who have modeled the impact of a Russian ban see an immediate price drop of more than 10-12%, and then a near term market settling about 10-12% below current levels for fresh Norwegian salmon.

Long term, if these sanctions continue in place for a year or longer, these same analysts from the Bergen firm Optimeering expect the impact to be minimal, as new markets will be found and trade patterns adjusted.

One of the ‘winners’ on salmon is likely to be Chile, whose exports are not affected.  Ironically, the same Norwegian firms cut out of the market via Norway, will be expanding their sales in Russia through their Chilean subsidiaries.  However, the Chilean shipments will be frozen Atlantic salmon, which has had nowhere near the growth experienced in fresh.

Russia is likely to expand its imports from Asia, including black market channels through China.  China already imports Norwegian and other farmed salmon, and it would not take much for some of this salmon to find its way to Russia.