Dramatic events and consequences

The outgoing 2022 has become a truly dramatic year for the world fishery industry. Russia, being one of the largest suppliers of fish and seafood to the global market with an annual catch of around five million metric tons has faced widespread sanctions imposed on the country’s seafood industry.

New restrictions caused a tough impact on all sectors of the global fishery industry, including fishing and aquaculture, seafood processing and markets, logistics, shipbuilding and ship repair.

The closure of seafood markets in Europe, the US and Canada to the Russian fishing companies has led to shaking up long-developed supply chains and redistribution of seafood flows.

According to Russia’s federal fishery agency, Rosrybolovstvo, the country’s seafood imports dropped by more than a third in the first six months of 2022 compared with this time last year to 206,100 metric tons due to import-export restrictions and the downward trend is expected to continue until the end of the year.

Significantly cut off the European and the US buyers, Russian fishing companies were forced to look for new markets with focus on the Asian-Pacific region and, we have to admit, not without a success.

For example, Russia’s seafood exports to South Korea jumped 86 percent through July as compared with the same period of 2021 to reach 346,295 metric tons, Busan-based Union Forsea Corp revealed.

Among other importers of Russian-origin seafood there was China, Japan, Nigeria, Vietnam, Ghana, Indonesia, Thailand, Brazil and other countries.

In total, Russia has supplied seafood to 60 countries during 2022 that allowed its overall seafood export to surge and exceed 1.1 million metric tons through July, up 23 percent from last year’s figure.

According to Russian expert estimates, the country’s seafood exports to Europe fell 60 percent, with supplies to the US and Canada fully stopped as a result of sanctions. Amid this backdrop, the Asian countries are becoming a key market for Russian fish: its exports to the Asian-Pacific region are expected to increase 25 percent by 2030.

Redistribution of seafood flows and shifting to new markets required changes in logistics, which as a rule led to additional financial losses, but made a room for new players involved in seafood shipping.

Redistribution of seafood flows and shifting to new markets made a room for new players involved in seafood shipping.

Aquaculture has also not escaped the impact from sanctions. Dynamically developing fish farming industry in Russia has faced aquafeed shortages after major suppliers from Denmark, Norway and Finland joined sanctions and refused to further supply their products to Russia. Together, they annually delivered around 170,000 metric tons of fish feed to the country’s market.

Meanwhile, Russia is implementing an ambitious plan to increase aquaculture production to 618,000 metric tons by 2030 from 365,600 metric tons produced in 2021.

Targeting this goal will require a significant increase in aquafeed supplies, which is expected to be met in part through imports.

Ambitious developing plans for aquaculture require increased aquafeed supplies

Fishery shipbuilding is another industry that has fully experienced the consequences of sanctions restrictions.

Russia is carrying out a large-scale renovation program of its fishing fleet and processing sector based on the investment fishing quotas, which were allocated to companies committing to building new fishing vessels at domestic shipyards and onshore processing plants.

Rosrybolovstvo concluded agreements through the first stage of the program to secure investment quotas for the construction of 105 fishing vessels of various types, including 65 new trawlers, worth around RUB 221 billion (€3.0 billion/$3.2 billion).

In 2023, the second stage of the state investment quota program is scheduled to start, with some 30 fishing vessels, 35 crabbers and 10 processing plants to be built.

However, the sanctions have affected these plans. Some of the onboard equipment for new fishing vessels under construction was banned for import, which makes Russian shipbuilders look for analogues, including those from foreign manufacturers.

Thus, the sanctions have created a large niche for manufacturers of onboard equipment for fishing vessels.

Sanctions created a niche for manufacturers of onboard equipment for fishing vessels.

Finally, COVID-19 restrictions continue to pressure seafood markets.

Ban on the supply of fish was initially introduced by the Chinese authorities at the end of 2020 due to traces of coronavirus detected on product packaging. It led to reshaping seafood markets and logistics, as well as huge financial losses.

Russia’s Pollock Catchers Association estimated losses from China's ban on Russian seafood imports and the closure of its ports at $400 million (€353 million) in 2021.

Reopened for fish later on, the Chinese market is keeping strict coronavirus restrictions and stays rather challenging.

New challenges – new possibilities

The COVID-19 pandemic, followed by widespread sanctions, which raged throughout the global seafood industry, created new variable realities and left many fearful for the future of their business against new challenges.

However, new challenges always mean new possibilities.

Markets in Europe, the US and Canada were closed for Russian fishery companies. However, there remain promising markets of the Asia-Pacific countries, with more than 60 percent of the world's seafood consumption.

In addition, African and Latin American countries are also steadily becoming more attractive for seafood producers.

And of course, the European and American seafood markets remain attractive despite any sanctions: long lasting, mutually beneficial business ties are not so easy to destroy.

Russia’s fishery industry, despite being most suffered from sanctions, remains among top 10 largest seafood suppliers to the global market.

Given its big potential in seafood trade, as well as ambitious developing plans for aquaculture, fishing fleet and onshore processing infrastructure, the country represents huge possibilities for cooperation.

However, new possibilities require new solutions and tools to be implemented.

SEAFOOD EXPO EURASIA is intended to be one of them.

The new event is a platform, aimed to connect fishery companies from around the world and help them meet new challenges in quickly changing circumstances.