Port lockdown may knock down fishing industry in the Russian Far East
Amid the restrictions that China imposes in connection with the pandemic, the Russian fleet faced a decrease in the rate of landing fish products. The Chinese side does not allow ships to enter the port if traces of coronavirus are found on the packaging of products. They seal the cargo with a subsequent decision to destroy it. Russian side does not have enough capacities for storing frozen fish and its processing.
This is a severe blow to the entire fishing industry. China is the largest importer of Russian fish: according to 2019, China accounts for 61% of all fish exports from the Russian Federation, the volume exceeded 1.09 million tons, which is more than $ 3.2 billion.
Despite the fact that the Federal Agency for Fishery was concerned earlier with the search for free refrigeration facilities in Russia, redistributing flows are still problematic: there are no enough processing and storage capacities inside Russia, and the ports of the second major importer, South Korea, are already overloaded. So, Far Eastern companies suffer from this situation.
Pollock catch suffers
The port lockdown is also a matter of great concern in connection of the traditionally launched pollock fishing season in the Sea of Okhotsk from January 1, which is one of the largest seasonal fishing grounds in the world. More than 12 thousand fishermen on 130 ships sailed to the Sea of Okhotsk on the fishing season. During January - April, the scale of production usually reaches a million tons of pollock. And here again everything stops at the PRC: China is not only a large consumer of pollock, there are also powerful fish processing plants there, aimed, among other things, at further export of processed products. Now it is extremely difficult to find an alternative to such capacities.
Russia catches about 4.9 million tons of fish products yearly. The Far East catches about 3.5 million tons share. Approximately 1.7 million tons is the share of pollock. This is the most demanded of the aquatic biological resources caught in the Russian Federation. According to forecasts, the industry should catch up to 1 million tons during winter-spring season. All these products, with the exception of the volume consumed by the domestic market, which is approximately 10-15%, are processed in China.
At the moment, while Chinese ports are closed, the transshipment of ready-to-ship products has already begun at sea, and this is a collapse for the region's fishing industry. There are not enough storage facilities both in the Far East and the whole Russia to put this fish. As a result of the restrictions on supplies to China, the pollock catch in Russia could decline by 300,000 tonnes in the winter-spring fishing season.
Role and position of the Government
Several years ago, the President of the Russian Federation gave a clear order on the construction of a fish processing cluster in the Russian Far East with storage refrigeration facilities. However, the President's order has not yet been fulfilled.
According to the industry representatives, Russian ports need additional state support and guarantees that the constructed facilities will be demanded. It can increase the supply of products to the domestic market. The experts believe that Russian fish, including pollock, should be supplied by producers to such government agencies as the Russian army, educational and medical institutions. Such contracts between fishermen and state agencies would allow the fishing industry to sell up to 700 thousand tons per year within the country, and the closure of Chinese ports wouldn’t be a problem.
Meantime, Russian fishermen plan to catch at least five million tonnes of fish this year, according to the head of Russia's Federal Fisheries Agency (Rosrybolovstvo), who expects that, "all Covid-19 restrictions should end in six months, and we shall be able to boost output and export volumes”. However, the Agency accepts that there is a serious decrease in the catch of pollock and there are certain difficulties with the catch and sale of cod in the Northern Basin.
The Agency stresses that the strategic task is to move away from exporting raw materials. The output of products with high benefit opens up opportunities for deliveries to new markets in the Far East. The most important market for Russia's Federal Fisheries Agency is the European Union. The second area under active development is the Middle East. The next step is opening markets in the United Arab Emirates and Saudi Arabia.
Sources: Interfax, Zolotoy Rog