Russian Fishing 4 Fish Prices
Rode Neagle
The Russian fisheries sector is facing the deepest crisis in its modern history as ever tightening sanctions and growing international isolation seriously delay the building of new fishing vessels and stymie the investment plans of local fishermen.
As most such supplies from Western states have been suspended since 24 February 2022, there is a possibility that equipment and components could be acquired from Chinese suppliers. However, most local analysts believe switching to Chinese supplies will delay the construction programmes by at least 2-3 years with a significant increase in construction costs. According to German Zverev, the refusal of Western suppliers to supply equipment ordered and partially paid for to their Russian customers will lead to a long delay in construction. He also added that despite this, domestic enterprises are still obliged to fulfill their financial obligations to banks, which provided their loans for the building of these trawlers. According to data from VARPE, the total debt burden of the Russian fishing industry already exceeds 450 billion rubles (US$6.55 billion), more than 50% of which ca be attributed to enterprises, which build fishing vessels under the investment quota programme. The commissioning of the majority of trawlers will therefore probably be postponed until 2026.
Most analysts believe that this will have a significant negative impact on the industry, as the renewal of the fishing fleet in Russia has been declared one of the priorities of the Russian state and of local fisherman in recent years. Vessels that have been in operation for 25-40 years in the Russian fishing sector are estimated at 70% of the fleet, while those more than 40 years old amount to 12%.
In the meantime, despite the current problems of Russian fisherman, the government is ready to conduct the second stage of the quota distribution scheme already next year (2023). As part of this, there are plans to build another 30 fishing vessels, as well as 35 crab catchers. According to state plans, about 300 billion rubles (US$4.47 billion) are supposed to be allocated for the needs of the industry, while budget revenues will reach 200 billion rubles. Still, a significant number of local analysts have serious doubts about the ability of the state to implement these plans, considering the current situation in the country. As the situation in the industry deteriorates, leading Russian fisherman have called on the state to provide additional support. Most of this support will be used to complete the building of new trawlers.
Representatives from VARPE have said that the current measures of state support are insufficient, as they do not stimulate the construction of fish trawlers in Russia, and most local fishermen still prefer to buy used vessels abroad due to lower costs and less risk of delays in construction. Since 24 February 2022 the cost of building trawlers at Russian shipyards has significantly increased, which has forced Russian fisherman to consider the choice of South Korea and other shipyards in the Asia Pacific for their ships. According to Kommersant, a business newspaper, shipyards in Asia have traditionally been cheaper than those in Russia, but in recent months the difference has become even more substantial. For example, in China, a 56-meter-long crab catcher costs three times less than a similar vessel built in Russia as part of investment quotas. However, due to current restrictions, imposed on Russian fisherman and Russian business, building of Russian vessels in Asian shipyards has become seriously complicated. Fishermen are therefore hoping for an increase in support from the state and German Zverev has noted there is a need for a more efficient system of state support for the construction of the fishing fleet and import substitution of ship equipment. Among the planned support measures are subsidised rates on loans provided for building of new trawlers, additional capitalization of shipyards by including them on the list of industries that will be allowed duty-free import of equipment, the exemption from VAT and from other taxes and duties. Experts from Rosrybolovstvo and some independent Russian analysts in the fishing sector expect the current slowdown in building of new vessels to have a negative impact on capture fish production in Russia for years to come leading to its stagnation.
Jared Danielson was having a slow day of salmon fishing off the Alaska Peninsula, the long finger of land jutting toward the Aleutian Islands. While his fishing net bobbed in the water, he had time for a quick boat tour, thanks to satellite internet. He pointed out his net, the beach and a little bag of salmon that he hoped would grow before the end of the day.
Back in the before times, before the fires and the disease came, you could feed bread to ducks without being cancelled by the bird police. Just grab a sliced pan of wholewheat Warburtons and hurl it into a lake, then watch as every duck, swan and anaemic-looking goose in the postcode descended upon it in a feathery gale, quacking and honking and feasting in a sordid maelstrom of avian debauchery. Now, say the bird police, it is only appropriate to feed fresh organic frozen peas to the ducks, otherwise their insides will turn to slime and their beaks will go soft and drop off.
Even the most patient of fishing fans would become disheartened by the pace of this simulation, which is slowed even further by the glacial grind of selling your puny catches to afford better equipment, as well as the gradual levelling up required to visit better fishing spots. Geared towards pushing you into a microtransaction or two, progress is tuned to be mildly arduous and is, by the very nature of being a simulation, entirely removed from the real world benefits of impaling fish on tiny hooks for fun. Standing alone on a riverbank eating egg sandwiches, drinking tea and sucking down great lungfuls of clean country air is nourishment to the body and mind.
And so, I put my rod down and step away from the riverbank, turning to face the surrounding woods. An invisible wall prevents me from leaving the designated fishing zone, though with some well-timed sprinting and probing of the fence I manage to break out of this glass cage. I push on into the wilderness, the trees gradually losing their definition until they are simple cardboard cutouts. I am a goldfish escaped from its bowl. The landscape flattens out into a featureless plain.
Over the past few years, fishing ships built, purchased, or serviced abroad have been banned from landing catch at Russian ports, but were still allowed to obtain quotas and fish in Russia's exclusive economic zone, provided they received clearance to land their catch from the Russian Customs Service.
On 31 December, 2020, the Russian government issued its resolution prohibiting ships built, purchased, or serviced outside of the EAEU from receiving any quota for fishing in domestic waters, starting in 2022.
In January, the All-Russian Association of Fishing Industry (VARPE) contacted Russian Prime Minister Mikhail Mishustin urging him to postpone implementation of the resolution until 1 January, 2024, and to establish a transition period during which fisheries could raise money to pay the duties and VAT required to pass the clearance procedure.
Union of Fisheries of the North (UFN) General Director Konstantin Drevetnyak said in an interview with Kommersant that the attempt to get Russian companies to service and repair ships in Russia will cause issues, as the country does not have sufficient capacity to handle the work.
At the moment, Rekasov wrote, sardine iwashi is the cheapest fish in Russia, with one kilogram of the species selling for RUB 45 (0.58 USD, 0.49 EUR). In contrast, one kilogram of pollock typically costs around RUB 68 (USD 0.88, EUR 0.74) and Pacific herring costs RUB 65 (USD 0.84, EUR 0.70), he said. Rekasov said the new requirements will essentially destroy the iwashi fishery, and as a result, he wrote in support of the VARPE initiative to postpone the enforcement of the resolution.
In response to the complaints, Abramova ordered the Russian Ministry of Agriculture and the Federal Agency for Fisheries to review the issues raised by the industry and propose possible solutions. After that announcement, Shestakov said that a transparent procedure for customs clearance is needed.
The latest financial indicators show the Russian fishing industry is on the verge of a serious crisis. According to data of the Russian Association of Fishermen (RAF), the balance profit of the industry in the first half of 2017 fell by18.7 percent, which happened for the first time since 2014.
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