Required Report - public distribution

**Date:** 09/30/2005

**GAIN Report Number:** RS5068

R

**Russian Federation**

**Fishery Products**

**Annual**

**2005**

**Approved by:**

![](media/image1.wmf)Allan Mustard

American Embassy, Moscow

**Prepared by:**

Erik Hansen and Marina Muran

**Report Highlights:**

Russia's commercial fish catch is estimated to increase by three percent
in 2005-06 due to continued improvements to Russian fishing vessels and
to more production coming from Russia's Exclusive Economic Zone (EEZ).
However, fish production is still below historical levels and it is not
keeping pace with increased domestic demand for fish products. The new
fishing quota system has not yet proved its effectiveness and traders
are requesting further improvements to the system. Russian imports of
fish products reached a record high in 2004 and this trend will likely
continue in 2005-06.

Includes PSD Changes: Yes

Includes Trade Matrix: No

Annual Report

Moscow \[RS1\]

\[RS\]

Table of Contents

[Executive Summary 3](#executive-summary)

[Production 3](#production)

[Aquaculture 3](#aquaculture)

[Wild Catch 4](#wild-catch)

[Table 1: Fish Catches and Seafood Production in Metric Tons, 2001-2004
5](#table-1-fish-catches-and-seafood-production-in-metric-tons-2001-2004)

[Salmon 7](#salmon)

[Fish Roe 8](#fish-roe)

[Groundfish 8](#groundfish)

[Crabs and Crab Meat 9](#__RefHeading___Toc115862366)

[Consumption 9](#consumption)

[Trade 10](#trade)

[Overall 10](#overall)

[Policy 10](#policy)

[Overall 10](#overall-1)

[Quota Issues 11](#quota-issues)

[Import Tariffs 12](#import-tariffs)

[Poaching 12](#poaching)

[Marketing 13](#marketing)

[PSD Tables 13](#psd-tables)

[Table 2. Production, Supply, and Distribution of Salmon, Metric Tons
13](#table-2.-production-supply-and-distribution-of-salmon-metric-tons)

[Table 3. Production, Supply, and Distribution of Groundfish, Metric
Tons
14](#table-3.-production-supply-and-distribution-of-groundfish-metric-tons)

[Table 4. Production, Supply, and Distribution of Fish Roe, Metric Tons
15](#table-4.-production-supply-and-distribution-of-fish-roe-metric-tons)

[Table 5. Production, Supply, and Distribution of Crab and Crab Meat,
Metric Tons
16](#table-5.-production-supply-and-distribution-of-crab-and-crab-meat-metric-tons)

# Executive Summary

Russian fish production in 2005-06 is estimated to increase by an
average of three percent from 2004. Continued improvements to Russia's
fishing fleet and more production coming from Russia's Exclusive
Economic Zone (EEZ) are the main drivers behind this output expansion.
New policy measures aimed at tackling old constraints are being
implemented, but traders are asking for further improvements to the
quota system.

In 2004, Russia continued to be a net importer of seafood - a trend that
started in 1998 with the devaluation of the ruble. This trend is likely
to continue in 2005-06 since production of fish and fish products in
Russia is still below historical levels and is not keeping pace with
increased domestic demand for fish. Russia has experienced six straight
years of strong economic growth. As a result, consumer incomes have been
rising on a yearly basis as well. In addition, the country remains an
exporter of unprocessed fish products. Foreign investment in the sector
remains low.

# Production

## Aquaculture 

In the absence of reliable government data for aquaculture production in
the Russian Federation, industry sources estimate total fish farm
production in 2005 to be approximately 103,000 metric tons, up ten
percent from 2004. Production for 2006 is forecast an increase of around
10 percent reflecting new maturing projects in this field. The
importance of aquaculture grows as the demand for fish products increase
and overfishing continues to reduce ocean supplies. The two dominant
species farmed in aquaculture projects in Russia are common carp and
silver carp, but other species are also receiving special support from
the government.

Some 15 farms in the Far East received incentives to farm valuable Yesso
mollusks. The bulk of the output is around 200 metric tons and comes
from the largest Primoriye-based Nereida Aquaculture JSC. Other
incentives were provided to farmers of Atrakhan' province which began
farming tilapia. This species has good potential and has adapted well to
the area's climatic conditions. However, trade sources say that the cost
of farming tilapia is high. The local government is looking for ways to
support such projects, such as compensation for fuel prices and
assistance with long-tem credits.

According to the Federal Agency for Fisheries (Rosrybolovstvo), Russian
fish farms raised and released more than 3.3 billion fry of valuable
fish species in 2004, four percent more than the previous year. The
agency oversees 67 fish farms in the Far East, Azov and the Caspian
basins that raise sturgeon, salmon, whitefish, and fine-mesh fish that
are then released into marine feeding grounds. Farms in the Caspian and
Azov basins raised more than 62 million true sturgeon fry in artificial
conditions this year - primarily sturgeon, beluga and star sturgeon - up
four percent from 2004. Farms in the Far East released more than 600
million salmon fry into the Bering, Okhotsk and Japan seas, up 7.9
percent compared to last year.

Farms also produced about 2.5 billion fine-mesh fish fry (common carp,
grass carp, bream, pike) and 4.5 million whitefish fry. According to
research officials, an estimated 30 percent of caught sturgeon and
salmon originated from these farms. Agency officials also stated that in
the Far East basin all farmed salmon fry \"have Russian origin\" and
that more than 90 percent of farm-raised sturgeon retrieved from the
Caspian and Azov Seas also came from Russian farms.

Sturgeon aquaculture is also being developed in the Astrakhan region,
but development is surprisingly slow despite proven high returns on
investment. According to local authorities, the Federal Agency for
Fisheries is mainly concerned with wild fish catches and has allocated
only 27 million rubles (\$950,700) in 2005 for aquaculture research.

The diversity of fishing reservoirs in the Russian Federation offers a
strong opportunity for the development of different production methods.
Current development of aquaculture is concentrated in three main areas:
ponds, industrial (artificial bodies of water), and ocean farming in
pens. Government and private enterprises are developing new technologies
to assist producers in improving production yields and reduce the cost
of production. Some of these projects are joint ventures with foreign
companies. However, output growth has been tempered by the following
factors: a) demise of former agricultural support policies; b)
difficulties in farm-restructuring and enterprise-privatization, which
creates an uncertain legal status of farm ownership; c) environmental
degradation of inland waterways through industrial, urban, agrochemical
pollution; d) occasional shortages of imported feedstuffs; e) shortage
of investment capital for restructuring, maintenance, and for general
investment; and f) lack of new distribution and marketing channels for
both lower and higher priced aquaculture products.

## Wild Catch

According to the Federal Agency for Fisheries, Russia's wild fish catch
during the first half of 2005 reached 1.5 million metric tons, an
increase of 12.5 percent over the same period in 2004.

Most of this increase originated from catches in Russia's EEZ and from
the Far Eastern Seas, up 18 and 21 percent respectively, from 2004. In
the Barents Sea and the White Sea, an estimated 136,200 metric tons of
fish were harvested during January-June 2005, up 9.6 percent over the
first six months of 2004. A decline in fish production was reported in
the Caspian Sea with 33,500 metric tons harvested in the first half of
2005, down 3.8 percent from the same period in 2004.

Russian fishermen also caught 274,400 metric tons of fish in other
countries\' economic zones during the first half of 2005, up 16.8
percent over the first half of 2004. Russia\'s harvest of fish and other
seafood products declined by 28.7 percent to 99,100 metric tons in
regions governed by conventions and on the open high seas in the first
half of 2005.

Wild catch will continue to increase in 2006 though at a lower rate. The
increase in catch is attributed to continued increase in catches from
the EEZ.

This increase in wild catch reflects the adoption of policy measures
aimed at improving the efficiency of the fishing industry and the
tackling of administrative and bureaucratic constraints, including the
restructuring of the fishery authority, as well as new government
incentives. The goal for 2005 calls for a recovery in wild catch to
reach between 3.1 million to 3.3 million metric tons, including 2.3
million to 2.5 million metric tons in waters under Russian jurisdiction.

According to Stainislav Il'yasov, Chief of the Federal Agency for
Fisheries, a number of measures will be in place soon to help the
world's oceans as a result of multilateral talks between Japan, Norway,
China and the United States. He expects these measures to enable Russia
to achieve a full range of fish production.

The Russian Statistics Committee (RosStat) also released a final report
estimating a total wild catch of nearly 3 million metric tons in 2004,
down 10 percent from the previous year. (Please see table 1). According
to trade sources, last year's production turned out to be better than
previously estimated because of an increase in the catch outside of the
Russian EEZ and the operation of new Russian factory ships with a large
capacity of 35-40,000 metric tons. However, wild catch production is
still well below historical levels.

##  

## Table 1: Fish Catches and Seafood Production in Metric Tons, 2001-2004

+------------------------+---+---------+---+---------+---+----------+---+-----------+
| **Product**            |   | 2001    |   | 2002    |   | 2003     |   | 2004      |
+------------------------+---+---------+---+---------+---+----------+---+-----------+
| Fish and other fish    |   |         |   |         |   |          |   |           |
| products:              |   |         |   |         |   |          |   |           |
+------------------------+---+---------+---+---------+---+----------+---+-----------+
| Total catch            |   | 3,      |   | 3,      |   | 3        |   | 2,965,113 |
|                        |   | 620,522 |   | 257,632 |   | ,284,989 |   |           |
+------------------------+---+---------+---+---------+---+----------+---+-----------+
| Including:             |   |         |   |         |   |          |   |           |
+------------------------+---+---------+---+---------+---+----------+---+-----------+
| In land catch          |   | 272,581 |   | 273,762 |   | 291,175  |   | 243,915   |
+------------------------+---+---------+---+---------+---+----------+---+-----------+
| Including:             |   |         |   |         |   |          |   |           |
+------------------------+---+---------+---+---------+---+----------+---+-----------+
| Fresh basins           |   | 210,284 |   | 218,636 |   | 236,993  |   | 191,231   |
+------------------------+---+---------+---+---------+---+----------+---+-----------+
| Catch in Russian       |   | 2,      |   | 2,      |   | 2        |   | 1,762,121 |
| economic zones         |   | 464,125 |   | 065,471 |   | ,105,750 |   |           |
+------------------------+---+---------+---+---------+---+----------+---+-----------+
| Catch in 200 mile      |   | 666,508 |   | 663,939 |   | 533,921  |   | 577,369   |
| zones of foreign       |   |         |   |         |   |          |   |           |
| countries              |   |         |   |         |   |          |   |           |
+------------------------+---+---------+---+---------+---+----------+---+-----------+
| Catch in open ocean    |   | 217,677 |   | 254,460 |   | 354,143  |   | 358,648   |
| areas outside of 200   |   |         |   |         |   |          |   |           |
| mile zones             |   |         |   |         |   |          |   |           |
+------------------------+---+---------+---+---------+---+----------+---+-----------+
| **Catch by fish        |   |         |   |         |   |          |   |           |
| varieties:**           |   |         |   |         |   |          |   |           |
+------------------------+---+---------+---+---------+---+----------+---+-----------+
| Herring                |   | 402,839 |   | 314,602 |   | 343,458  |   | 298,510   |
+------------------------+---+---------+---+---------+---+----------+---+-----------+
| Sardine                |   | 3,544   |   | 9,108   |   | 4,815    |   | 6,014     |
+------------------------+---+---------+---+---------+---+----------+---+-----------+
| Sprat (kil'ka &        |   | 96,392  |   | 69,232  |   | 76,656   |   | 53,802    |
| salaka)                |   |         |   |         |   |          |   |           |
+------------------------+---+---------+---+---------+---+----------+---+-----------+
| Saury                  |   | 35,884  |   | 44,302  |   | 50,895   |   | 71,216    |
+------------------------+---+---------+---+---------+---+----------+---+-----------+
| Lancet fish            |   | 22,242  |   | 23,705  |   | 14,177   |   | 24,555    |
+------------------------+---+---------+---+---------+---+----------+---+-----------+
| Mackerel               |   | 62,519  |   | 82,144  |   | 53,005   |   | 11,640    |
+------------------------+---+---------+---+---------+---+----------+---+-----------+
| Sea perch              |   | 46,620  |   | 47,609  |   | 53,638   |   | 44591     |
+------------------------+---+---------+---+---------+---+----------+---+-----------+
| Jack mackerel          |   | 25,118  |   | 41,695  |   | 18,277   |   | 71,590    |
+------------------------+---+---------+---+---------+---+----------+---+-----------+
| Plaice                 |   | 114,139 |   | 88,177  |   | 85,101   |   | 67,724    |
+------------------------+---+---------+---+---------+---+----------+---+-----------+
| Halibut                |   | 28,722  |   | 27,625  |   | 25,030   |   | 24,601    |
+------------------------+---+---------+---+---------+---+----------+---+-----------+
| Sturgeon, total        |   | 622     |   | 491     |   | 513      |   | 191       |
+------------------------+---+---------+---+---------+---+----------+---+-----------+
| Coregonus, total       |   | 9,987   |   | 9,260   |   | 9,640    |   | 9,983     |
+------------------------+---+---------+---+---------+---+----------+---+-----------+
| Salmon, total          |   | 224,458 |   | 191,694 |   | 271,370  |   | 183,728   |
+------------------------+---+---------+---+---------+---+----------+---+-----------+
| Cod fish, total        |   | 1,      |   | 1,      |   | 1        |   | 1,563,055 |
|                        |   | 729,274 |   | 386,922 |   | ,651,291 |   |           |
+------------------------+---+---------+---+---------+---+----------+---+-----------+
| Includes: cod          |   | 322,112 |   | 283,453 |   | 246,154  |   | 261,288   |
| (theragra)             |   |         |   |         |   |          |   |           |
+------------------------+---+---------+---+---------+---+----------+---+-----------+
| Chalcogramma (lat.)    |   | 1,      |   | 831,179 |   | 1        |   | 857,460   |
|                        |   | 120,889 |   |         |   | ,003,009 |   |           |
+------------------------+---+---------+---+---------+---+----------+---+-----------+
| Haddock                |   | 40,060  |   | 40,598  |   | 43,479   |   | 55,408    |
+------------------------+---+---------+---+---------+---+----------+---+-----------+
| Total seafood and      |   | 149,949 |   | 158,805 |   | 131,636  |   | 128,233   |
| crayfish               |   |         |   |         |   |          |   |           |
+------------------------+---+---------+---+---------+---+----------+---+-----------+
| Includes crayfish and  |   | 144,249 |   | 147,479 |   | 122,006  |   | 117,871   |
| mollusks               |   |         |   |         |   |          |   |           |
+------------------------+---+---------+---+---------+---+----------+---+-----------+
| Crabs                  |   | 46,903  |   | 41,904  |   | 43,046   |   | 32,940    |
+------------------------+---+---------+---+---------+---+----------+---+-----------+
| > Shrimp               |   | 17,782  |   | 12,210  |   | 9,734    |   | 10,289    |
+------------------------+---+---------+---+---------+---+----------+---+-----------+
| > Mollusks             |   | 79,560  |   | 93,361  |   | 69,220   |   | 74,631    |
+------------------------+---+---------+---+---------+---+----------+---+-----------+
| **Fish; food products, | 3 |         | 2 |         | 3 |          | 2 |           |
| including canned       | , |         | , |         | , |          | , |           |
| products**             | 0 |         | 9 |         | 0 |          | 9 |           |
|                        | 5 |         | 6 |         | 3 |          | 6 |           |
|                        | 6 |         | 1 |         | 2 |          | 2 |           |
|                        | , |         | , |         | , |          | , |           |
|                        | 6 |         | 3 |         | 8 |          | 5 |           |
|                        | 4 |         | 6 |         | 3 |          | 8 |           |
|                        | 2 |         | 2 |         | 7 |          | 1 |           |
+------------------------+---+---------+---+---------+---+----------+---+-----------+
| Non-canned edible fish | 2 |         | 2 |         | 2 |          | 2 |           |
| products               | , |         | , |         | , |          | , |           |
|                        | 8 |         | 7 |         | 7 |          | 7 |           |
|                        | 4 |         | 4 |         | 8 |          | 0 |           |
|                        | 3 |         | 0 |         | 6 |          | 0 |           |
|                        | , |         | , |         | , |          | , |           |
|                        | 3 |         | 6 |         | 0 |          | 8 |           |
|                        | 0 |         | 9 |         | 7 |          | 6 |           |
|                        | 3 |         | 9 |         | 2 |          | 9 |           |
+------------------------+---+---------+---+---------+---+----------+---+-----------+
| Fish, live (excluding  | 3 |         | N |         | N |          |   |           |
| herring)               | 4 |         | / |         | / |          |   |           |
|                        | 3 |         | A |         | A |          |   |           |
|                        | , |         |   |         |   |          |   |           |
|                        | 9 |         |   |         |   |          |   |           |
|                        | 1 |         |   |         |   |          |   |           |
|                        | 5 |         |   |         |   |          |   |           |
+------------------------+---+---------+---+---------+---+----------+---+-----------+
| Fish frozen (excluding | 1 |         | 1 |         | 1 |          | 1 |           |
| herring)               | , |         | , |         | , |          | , |           |
|                        | 6 |         | 6 |         | 7 |          | 6 |           |
|                        | 7 |         | 6 |         | 0 |          | 2 |           |
|                        | 5 |         | 1 |         | 0 |          | 1 |           |
|                        | , |         | , |         | , |          | , |           |
|                        | 2 |         | 0 |         | 8 |          | 0 |           |
|                        | 9 |         | 2 |         | 0 |          | 9 |           |
|                        | 3 |         | 5 |         | 9 |          | 3 |           |
+------------------------+---+---------+---+---------+---+----------+---+-----------+
| Fish chilled           | 1 |         | N |         | N |          | N |           |
| (excluding herring)    | 0 |         | / |         | / |          | / |           |
|                        | 4 |         | A |         | A |          | A |           |
|                        | , |         |   |         |   |          |   |           |
|                        | 9 |         |   |         |   |          |   |           |
|                        | 1 |         |   |         |   |          |   |           |
|                        | 9 |         |   |         |   |          |   |           |
+------------------------+---+---------+---+---------+---+----------+---+-----------+
| Fillet frozen          | 9 |         | 4 |         | 6 |          | 4 |           |
| (excluding herring)    | 2 |         | 9 |         | 7 |          | 8 |           |
|                        | , |         | , |         | , |          | , |           |
|                        | 6 |         | 4 |         | 7 |          | 5 |           |
|                        | 6 |         | 4 |         | 3 |          | 0 |           |
|                        | 7 |         | 1 |         | 2 |          | 4 |           |
+------------------------+---+---------+---+---------+---+----------+---+-----------+
| Salted herrings        | 3 |         | 3 |         | 4 |          | 4 |           |
|                        | 3 |         | 4 |         | 1 |          | 9 |           |
|                        | , |         | , |         | , |          | , |           |
|                        | 3 |         | 4 |         | 8 |          | 5 |           |
|                        | 5 |         | 2 |         | 3 |          | 0 |           |
|                        | 4 |         | 0 |         | 4 |          | 6 |           |
+------------------------+---+---------+---+---------+---+----------+---+-----------+
| Herring, all types of  | 4 |         | 3 |         | 3 |          | 3 |           |
| processing             | 0 |         | 7 |         | 7 |          | 6 |           |
|                        | 7 |         | 2 |         | 4 |          | 2 |           |
|                        | , |         | , |         | , |          | , |           |
|                        | 1 |         | 9 |         | 7 |          | 9 |           |
|                        | 2 |         | 6 |         | 5 |          | 9 |           |
|                        | 4 |         | 6 |         | 5 |          | 5 |           |
+------------------------+---+---------+---+---------+---+----------+---+-----------+
| Smoked fish (excluding | 2 |         | 2 |         | 3 |          | 4 |           |
| herring)               | 6 |         | 8 |         | 3 |          | 0 |           |
|                        | , |         | , |         | , |          | , |           |
|                        | 5 |         | 6 |         | 4 |          | 6 |           |
|                        | 7 |         | 8 |         | 9 |          | 7 |           |
|                        | 9 |         | 3 |         | 8 |          | 3 |           |
+------------------------+---+---------+---+---------+---+----------+---+-----------+
| Fish dries and         | 9 |         | 9 |         | 1 |          | 1 |           |
| dry‑cure               | , |         | , |         | 0 |          | 1 |           |
|                        | 1 |         | 9 |         | , |          | , |           |
|                        | 3 |         | 7 |         | 4 |          | 3 |           |
|                        | 3 |         | 1 |         | 8 |          | 5 |           |
|                        |   |         |   |         | 7 |          | 6 |           |
+------------------------+---+---------+---+---------+---+----------+---+-----------+
| Spiced and marinated   | 2 |         | 2 |         | 3 |          | 3 |           |
| products               | , |         | , |         | , |          | , |           |
|                        | 4 |         | 4 |         | 4 |          | 8 |           |
|                        | 2 |         | 7 |         | 8 |          | 7 |           |
|                        | 4 |         | 8 |         | 7 |          | 2 |           |
+------------------------+---+---------+---+---------+---+----------+---+-----------+
| Culinary products      | 1 |         | 1 |         | 3 |          | 5 |           |
|                        | 1 |         | 6 |         | 7 |          | 0 |           |
|                        | , |         | , |         | , |          | , |           |
|                        | 6 |         | 8 |         | 7 |          | 4 |           |
|                        | 0 |         | 1 |         | 3 |          | 4 |           |
|                        | 8 |         | 8 |         | 6 |          | 8 |           |
+------------------------+---+---------+---+---------+---+----------+---+-----------+
| Balyk products         | 1 |         | 1 |         | 2 |          | 2 |           |
|                        | , |         | , |         | , |          | , |           |
|                        | 2 |         | 6 |         | 0 |          | 0 |           |
|                        | 8 |         | 4 |         | 7 |          | 1 |           |
|                        | 4 |         | 1 |         | 7 |          | 9 |           |
+------------------------+---+---------+---+---------+---+----------+---+-----------+
| Food, feed, and        | 1 |         | 1 |         | 1 |          | 8 |           |
| industrial products    | 8 |         | 6 |         | 2 |          | 3 |           |
|                        | 7 |         | 3 |         | 1 |          | , |           |
|                        | , |         | , |         | , |          | 7 |           |
|                        | 8 |         | 8 |         | 3 |          | 5 |           |
|                        | 9 |         | 0 |         | 3 |          | 3 |           |
|                        | 5 |         | 7 |         | 6 |          |   |           |
+------------------------+---+---------+---+---------+---+----------+---+-----------+
| Caviar, total          | 2 |         | 2 |         | 2 |          | 2 |           |
|                        | 8 |         | 1 |         | 4 |          | 4 |           |
|                        | , |         | , |         | , |          | , |           |
|                        | 0 |         | 6 |         | 9 |          | 1 |           |
|                        | 3 |         | 5 |         | 6 |          | 9 |           |
|                        | 4 |         | 2 |         | 5 |          | 5 |           |
+------------------------+---+---------+---+---------+---+----------+---+-----------+
| Including sturgeon     | 2 |         | 2 |         | 1 |          | 9 |           |
|                        | 4 |         | 4 |         | 4 |          | , |           |
|                        |   |         | , |         | , |          | 9 |           |
|                        |   |         | 5 |         | 7 |          |   |           |
+------------------------+---+---------+---+---------+---+----------+---+-----------+
| Including salmon       | 6 |         | 5 |         | 7 |          | 6 |           |
|                        | , |         | , |         | , |          | , |           |
|                        | 1 |         | 6 |         | 0 |          | 2 |           |
|                        | 2 |         | 7 |         | 8 |          | 0 |           |
|                        | 0 |         | 4 |         | 4 |          | 2 |           |
+------------------------+---+---------+---+---------+---+----------+---+-----------+
| Fish and seafood fat   | 2 |         | 2 |         | 1 |          | 1 |           |
|                        | , |         | , |         | , |          | , |           |
|                        | 8 |         | 4 |         | 8 |          | 7 |           |
|                        | 0 |         | 7 |         | 0 |          | 3 |           |
|                        | 1 |         | 2 |         | 9 |          | 9 |           |
+------------------------+---+---------+---+---------+---+----------+---+-----------+
| Fish feed meal         | 9 |         | 6 |         | 6 |          | 6 |           |
|                        | 8 |         | 6 |         | 7 |          | 1 |           |
|                        | , |         | , |         | , |          | , |           |
|                        | 3 |         | 6 |         | 3 |          | 7 |           |
|                        | 9 |         | 3 |         | 6 |          | 6 |           |
|                        | 9 |         | 6 |         | 0 |          | 7 |           |
+------------------------+---+---------+---+---------+---+----------+---+-----------+

Source: Russian State Statistics Committee

> *Note: Data provided in the Production, Supply, and Distribution
> Tables of this report may differ from official Russian statistics
> because they also include estimated data provided by trade sources on
> production and unreported exports.* *Official data is provided for
> comparison purposes only.*

## 

## Salmon

According to the Federal Agency for Fisheries, Russia is planning to
boost the catch of all types of salmon in 2005. The salmon fishing
season began in late June in the most important producing areas of
Sakhalin, Kamchatka and Magadan oblasts, and in the Koryak *okrug*
(region). Russia\'s Kamchatka Peninsula produces 25 percent of the
world\'s wild Pacific salmon.

Pacific salmon quotas for coastal fishing total 208,800 metric tons in
2005, including 5,150 metric tons for native-born people of the north,
2,660 metric tons for sport and amateur fishing, and 18,730 metric tons
for scientific research. Total allowed catch for chum, sockeye and pink
salmon in 2005 is 255,411 metric tons.

The Russian government has approved a resolution to organize the catch
of Pacific salmon under which the Ministry of Agriculture must present a
draft regulation to the Federal Agency for Fisheries by March 15 of
every year. This draft regulation will include a requirement for studies
of fish population to determine the catch of Pacific salmon for the
current year. After these considerations, the Ministry of Agriculture
will issue the resolution with the total allowable catch of Pacific
salmon by March 25 of each year.

The government also announced that the Federal Agency for Fisheries
should send to the Ministry of Agriculture for confirmation, no later
than April 10 of every year, a draft distribution of the total allowed
catch for Pacific salmon. This will depend on the types of quota (for
coastal fishing in Russian waters, for supporting the traditional way of
life and activities of native people of the North, Siberia and the Far
East in fishing and producing Pacific salmon, etc).

Although Russia is a major producer of Pacific salmon, the country
imports most of its Atlantic salmon. Reliable official data is not
available, but trade sources report a major increase in imports of
Atlantic salmon during the last few years, mostly from Norway. Imported
products enter the Russian market mostly as fresh, chilled or frozen,
and partially processed.

## Fish Roe

## 

According to the Resolution of the Convention on the International Trade
in Endangered Species (CITES), Russia is allowed to export 28 metric
tons of black caviar in 2005, about two metric tons less than 2004. The
2004 quota was not filled because Russia failed to comply with several
international requirements. The Federal Agency for Fisheries reported
that Russia exported 20 metric tons of caviar in 2004.

The Russian government is also working on a new law to regulate the
turnover of sturgeon fish and sturgeon fish products, including caviar.
Voting on this law is expected by the end of 2005 or during the first
quarter of 2006. According to the head of the Federal Agency for
Fisheries, the situation in the Caspian is catastrophic with high levels
of poaching and numerous species on the brink of extinction. This has
evoked pressure for strong measures by the Russian government, such as a
state monopoly on sturgeon turnover.

The Caspian Sea basin produced more than half the Soviet fish catch
until the 1950s. In the second half of the 20^th^ century dams were
built on the Volga River that blocked access to 85 percent of sturgeon
spawning grounds, a catastrophe for sturgeon production. Between 1959
and 1962 the Soviet Union created 12 hatcheries and Iran one. At their
peak, these hatcheries produced 100 million fingerlings per year.

By 1990 the sturgeon catch was still in the range of 10,000 to 15,000
tons per year, despite lower hatching rates than in 1950. This means
there was severe overfishing, and the result was a drop in the last 15
years in the sturgeon catch. Officially, the catch in 2003 was about
2,000 tons across the five Caspian basin countries (Russia, Iran,
Turkmenistan, Kazakhstan, Azerbaijan) with 1,000 of that taken by Iran;
in 2004 the catch was less than 1,000 tons, with 420 tons caught by the
FSU Caspian states and 530 tons by Iran. Poaching is a serious problem
despite a ban on fishing in the open Caspian (fishing is permitted only
in the delta and the rivers that drain into the Caspian). There is no
internationally coordinated effort to combat sturgeon poaching.

For more information on sturgeon and caviar production and trade please
see

GAIN RS 5038 dated May 20, 2005.

## Groundfish

Groundfish catch is estimated to rise by nearly four percent in 2005,
reflecting an increase in the fishing quota and larger harvest of cod
reported from the Far East as well as new investments in their
fishing-fleets (such as large capacity ships).

The forecast for 2006 calls for further increase of groundfish catch,
mostly cod and haddock due to restoration of the population and further
investments in the fishing fleet.

The quota for Alaska pollack in the Sea of Okhotsk in the Far East was
set at 508,000 metric tons, 88,000 metric tons higher than in 2004, and
at 473,000 metric tons in the Bering Sea, 62,500 metric tons more than
in 2004. The quota for herring catch in the Sea of Okhotsk was set at
250,100 metric tons, up 6,200 metric tons from last year.

The cod stock is defined as being fished outside of the safe biological
limits. Environmentalists believe that cod stock is under threat from
overfishing, oil exploration, and Soviet-era radioactive waste dumping.

Fishery scientists from the Murmansk Research Institute have completed a
survey on cod and haddock stocks. According to the survey, a new class
has been found that is 25 percent stronger than the 2003 generation and
resistant to major losses. This is expected to boost fishing stocks in
4-5 years. Meanwhile the current fishing stock has declined slightly to
500,000 metric tons, which is due to a high degree of fish dispersion
resulting in incomplete stock taking. The haddock fishing stock has been
estimated at 200,000 to 300,000 metric tons, roughly the same as the
previous year. According to marine biologists of the Russian Academy of
Sciences, the outlook for long-term production of Alaska pollock in the
sea of Okhotsk is quite optimistic.

## 

[]{#__RefHeading___Toc115862366 .anchor}Crabs and Crab Meat

Crab and crabmeat production is expected to increase slightly in 2005
and 2006 because of overfishing and poaching. This increase is also due,
in part, to a government measure to lower the fee for opilio crab catch
from 30,000 rubles (\$1,050) to 13,000 rubles (\$456) per metric ton in
the Far East Basin. The corresponding government resolution adopted in
April 2005 will enable fishermen to catch the allowed quota of 14,666
metric tons. According to Russian scientists in Vladivostok, production
in the Kamchatka Peninsula is estimated to be a little higher than 5,000
metric tons this year because of overfishing in the area.

There is no reliable data for crab catch and crabmeat production in
Russia due to the high level of unreported crab catches and trade. In
2004, unreported exports of crab to the four major Russian destinations
(Japan, the United States, South Korea, and China) totaled nearly 50,000
metric tons. Unreported sales of king crab to the United States appears
to be declining due to the actions of some NGO's in the west coast and
to stricter enforcement of leg size requirements. According to the data
provided by the Audit Chamber, during the first nine months of 2004,
Japanese fishing companies on Hokkaido Island received an estimated
43,000 metric tons of crab illegally imported from the Russian Far East.

# Consumption

Overall consumption of fish products in Russia will likely increase by
three to four percent in 2005, driven by the following factors: a)
higher market prices for all types of meats, but mostly for poultry due
to the implementation of import quotas which have provoked a shift in
consumption to fish products; b) changing structure of consumer
segmentation in Russia with more people aged between 30-45 with higher
income to purchase high-value fish products such as salmon; c) ongoing
modernization of Russia's distribution and retail structure which now
makes seafood delicacy available to new consumer groups interested in
more variety and quality rather than cost; d) increase in seafood
delicacy like octopus, squid, mussels, sea scallops, and other less
familiar seafood for ordinary consumers; d) health and safety concerns
with diseases affecting meat products which are leading consumers to
switch to alternative animal proteins.

The outlook for 2006 also foresees a continued increase in fish
consumption. Production is not keeping pace with increasing demand as
consumer incomes continue to rise as a result of seven consecutive years
of strong economic growth.

For more information please see GAIN RS5057.

# Trade

## Overall

During the first half of 2005, imports of fish and fish products
increased by over 40 percent. At the same time, Russian exports
increased by nearly 49 percent. According to the Russian State Customs
Committee, total Russian seafood exports (chapter 3 of the HTS) totaled
\$324 million in 2004, down 18.6 percent from 2003, while imports
reached \$642 million, up almost 60 percent from 2003. The result is a
total trade deficit of \$138 million. Trade sources attribute this
deficit to the following factors: a sharp decrease in the value of
exports of black caviar; a sharp increase (over 126 percent) of salmon
imports mostly from Norway; nearly 70 percent of all seafood exports are
not processed with lower aggregate value to the product; lack of policy
coordination between different government agencies (both at the federal
or regional levels); poaching; illegal landings in foreign ports of
foreign vessels; lack of compliance with European Union fishery
standards; and lack of organization among small and mid-sized fishing
companies.

Russian seafood exports remain concentrated in few markets. In the first
half of 2005, the major exporters were Republic of Korea \$86.8 million
(41.7 percent), China \$52.5 million (25.2 percent), Singapore -- \$19.4
million (9.3 percent), USA - \$18.4 million (8.8 percent), and Germany -
\$12.8 (6.2 percent).

Unreported exports continue to be a difficult issue for the Russian
government. There is no reliable estimate for unreported exports and
imports, although trade sources believe they fall within a range of 25
to 35 percent of total official data. Some trade sources believe that
unreported data is as high as 100 percent of all official data.
Underreporting is motivated by attempts to evade state and federal
taxes, customs duties, and complete accounting for quota usage. A
significant share of the unreported fish catch is in the Russian Far
East, where fishermen harvest in Russian territorial waters but ship the
product directly to other countries (mainly to Japan, Korea and China)
without registering the catch with Russian Customs. It is estimated that
within the last three years, as a result of unreported exports of
seafood to Japan, the Russian government lost \$150 million in tax
revenues. Trade sources also indicate the same problems in the Barents
Sea.

According to Head of the Federal Agency for Fisheries, Stanislav
Ily'asov, about 70 percent of the fish caught by Russian fishermen in
the Russian EEZ goes abroad, which causes losses of over five billion
rubles a year. He estimates that if half of this catch returned to the
Russian coast, Russia would be able to fully use the capacity of
processing plants and cut market prices in half. According to Mr.
Ily'asov, about half of the fish in Russia's market is imported.
However, reports indicate that five times more fish were unloaded at
Murmansk Port and double the volume at Kaliningrad and Far Eastern ports
compared to last year.

The United States is a major destination for a variety of edible fish
and seafood from Russia. In 2004, the United States imported \$10.7
million of fish and seafood products from Russia, up one percent from
2003. At the same time, Russia imported \$22.8 million worth of seafood
products, a significant increase of nearly 185 percent.

# Policy

## Overall

The major legislative breakthrough of the industry in 2005 was the
implementation of the "Law on Fishery and Preservation of Marine
Biological Resources" (Law Number 166/04). This law outlines the broad
structure of commercial and recreational fisheries and the role of the
government in monitoring and ensuring resource sustainability and the
development of a sustainable program. Despite Russia's enormous marine
resources and the key role fisheries play in many communities, Russian
policy had been rudderless for the past eight years. The Russian
government operated without a clearly defined law framework that
coordinated key elements of resource management policy. Each of the main
elements was developed independently and not subject to continued
coordination or adherence to a broadly agreed-upon policy document, such
as the U.S. Magnuson-Stevens Fishery Conservation and Management Act.

Prime Minister Mikhail Fradkov signed Resolution# 317 on May 2005,
giving federal executive agencies a number of functions in the fishing
industry and in preserving marine biological resources. According to the
document, the Ministry of Agriculture and the Federal Agency for
Fisheries will determine and distribute the allotted catch of marine
bio-resources in Russian waters as well as set quotas for their
production every year.

The Federal Agency for Fishery will implement state control in the
fishing and marine bio-resources industries by giving permission to
catch marine bio-resources or annul such permission until the set
timeframe has expired. In addition, the Veterinary Service might
temporarily set up, issue and register permission for catching marine
bio-resources and amend such permission until there are amendments to
Russian legislation.

On May 20, 2005, the Russian government signed Resolution# 316, on
organizing the catch of Pacific salmon. The government instructed the
Ministry of Agriculture, in agreement with the Federal Anti-Monopoly
Service, to develop a plan for holding auctions that will grant contract
rights for catching Pacific salmon in coastal fishing areas by January
1, 2006. It also instructed them to confirm a standard resolution on a
commission for holding the auctions.

The commission should include representatives of the interested federal
executive agencies and those of the Russian coastal areas with shallow
rivers where Pacific salmon reproduce in the Far East. The government
invalidated a resolution dated May 21, 2001, on determining the catch of
marine biological resources, including Pacific salmon. In addition, a
government resolution dated November 20, 2003 on quotas for catching
marine bio-resources will not be used in organizing the catch of Pacific
salmon.

According to head of Agency for Fisheries Il'yasov, it is necessary to
amend 11 additional pieces of legislation, adopt two other laws, and
amend four government resolutions and two presidential decrees now that
a law on fishing and conserving biological resources has been
implemented. Implementation of the full legislative framework for the
fishing industry, including the bill on coastal fishing, is planned for
mid-2006.

Stanislav Il'yasov also reported that he is not happy with the transfer
of some functions from the Fisheries Committee to the Natural Resources
Surveillance Service at the Ministry of Natural Resources
(RosPrirodNadzor), and other agencies. For him, this creates additional
obstacles for fishermen. However, discussions are now taking place that
would return the responsibility for allocating fishing permits to the
Federal Agency for Fisheries.

For more information please see GAIN RS5050.

## 

## Quota Issues

In January 2004, Russia switched to a five-year capture quota share
distribution system.

A preliminary result from the Audit Chamber indicates that Russia\'s
fishing industry performance declined in 2004 due to this new quota
distribution system. The Audit Chamber recently looked at the results of
inspections as well as the efficiency of using quotas on catches of
marine bio-resources divided by users, in accordance with the
instruction passed by the Russian government on November 20, 2003.

The Federal Agency for Fisheries carried out these inspections in the
Kamchatka and Magadan oblasts and in the autonomous districts of Koryak
and Chukotka from February-May 2005. According to the results, 11
organizations, which are involved in the fishing industry in four
regions of the Far East Federal District, did not meet some of the
requirements of the Russian law in the EEZ. The regions that have
seacoasts were basically not allowed to participate in the division of
industrial quotas on catches of marine biological resources on the
continental shelf and in the EEZ. The catch of fish and other marine
resources was a little more than 2.9 million tones in 2004, or 10.7
percent less than in 2003.

The production of fish products dropped by 363,000 metric tons or 12
percent. Annual payments made to the budget from all branches of the
fishing industry have been dwindling since 2001. In 2004, the payments
amounted to 10.2 billion rubles, a 30.3 percent drop from 2003 and a
29.1 percent decrease from 2002.

According to the rules of the new quota system, the applicant for a
quota must provide historical annual catch records for the last three
years (2000-2003) along with records of allocated and purchased quotas.
In addition, he must prove that he has not exceeded the previous year\'s
officially allocated quota, possess a fishing vessel(s), and outfit the
vessel with equipment for satellite distribution of information, which
includes data on the size of the catch and real-time monitoring of the
vessel's location and movement. If these records are not accurate or if
the company did not report catching its entire quota during any of the
previous seasons, it might lead government restrictions for the company
by not being eligible for fishing licenses. The company could also be
left out of further quota allocations as well.

For more information and background on quota distribution system in
Russia please see GAIN Report RS3053 and GAIN RS4051.

## Import Tariffs

# 

The import duty for most fish and seafood products is 10 percent. For
more detailed information on import tariffs please refer to GAIN RS4305.

Referring to granules from fish or shellfish, mollusks and other water
invertebrates (HTS 2301 20 0000), soybeans, corn, and flour of fine
grinding and graham, the [Decree of the Government of the Russian
Federation N 178 of 4 April
2005](http://www.kodeks-em.ru:5107/law?d&nd=901929222&prevDoc=747400021&mark=1SGM26M2KV45UP1ROCVMK2A9U7T5000032I000002G0LPD3752863L39#I0)
establishes that the rates of import custom duties approved by the
Decree of the Government of the Russian Federation #830 \"On Customs
Tariffs of the Russian Federation and Commodity Nomenclature Applying on
Providing of Foreign Economic Activity\" of November 30, 2001, shall not
be applied until May 8, 2005.

# 

## Poaching

Poaching is one of the major obstacles hindering sustainable fishery
development in Russia. Poaching damages the internal market and causes
price dumping in the world market. The main reason for poaching is the
ineffective system of state inspection and control over bio-resources
caught in the Russian EEZ.

The Interior Ministry and regional offices of the Federal Veterinary and
Phytosanitary Surveillance Service (VPSS) plan to join forces to
preserve bio-resources in Russia\'s lakes, rivers and reservoirs, and
enforce fishing legislation. Interfax reported that the head of the
VPSS, Sergey Dankvert, and First Deputy Interior Minister, Aleksandr
Chekalin, have signed a joint action plan for 2005-2006.

The efforts will focus on law enforcement at internal bodies of water,
fighting poaching and the illegal purchase, transportation, storage and
sale of fish products. The police have always helped protect biological
resources, especially in fighting poaching, and up to 20 percent of
violations of fishing rules on the country\'s lakes and rivers are
stopped with the aid of the police.

The action plan calls for expanding the form of collaboration on
protection of bio-resources, especially in areas that are home to
valuable fish such as salmon, sturgeon and whitefish. Special attention
will be paid to tightening control over processing, storage,
transportation and sales of caviar and other sturgeon products.

# 

# Marketing

Please see GAIN Reports RS 4305 and RS 5008. These reports provide a
road map for market entry and best prospects for U.S. suppliers of fish
and seafood products to the Russian market.

# 

# PSD Tables

## Table 2. Production, Supply, and Distribution of Salmon, Metric Tons

  --------------- --------------------- ----------------- ---------- ----------------- ---------- -----------------
  **PSD Table**                                                                                   

  **Country**     **Russian                                                                       
                  Federation**                                                                    

  **Commodity**   **Salmon,                                                            (MT)       
                  Whole/Eviscerated**                                                             

                  2004                  Revised           2005       Estimate          2006       Forecast

                  USDA Official \[Old\] Post              USDA       Post              USDA       Post
                                        Estimate\[New\]   Official   Estimate\[New\]   Official   Estimate\[New\]
                                                          \[Old\]                      \[Old\]    

  **Market Year                         01/2004                      01/2005                      01/2006
  Begin**                                                                                         

  Beginning       0                     9000              0          6000              0          8006
  Stocks                                                                                          

  Total           0                     180000            0          182000            0          185650
  Production                                                                                      

  Intra-EC        0                     0                 0          0                 0          0
  Imports                                                                                         

  Other Imports   0                     42161             0          61300             0          79644

  TOTAL Imports   0                     42161             0          61300             0          79644

  TOTAL SUPPLY    0                     231161            0          249300            0          273300

  Intra-EC        0                     0                 0          0                 0          0
  Exports                                                                                         

  Other Exports   0                     93661             0          101150            0          115400

  TOTAL Exports   0                     93661             0          101150            0          115400

  Domestic        0                     120500            0          128144            0          135900
  Consumption                                                                                     

  Other Use/Loss  0                     11000             0          12000             0          16000

  TOTAL           0                     131500            0          140144            0          151900
  Utilization                                                                                     

  Ending Stocks   0                     6000              0          8006              0          6000

  TOTAL           0                     231161            0          249300            0          273300
  DISTRIBUTION                                                                                    
  --------------- --------------------- ----------------- ---------- ----------------- ---------- -----------------

## 

## 

## Table 3. Production, Supply, and Distribution of Groundfish, Metric Tons

  --------------- --------------------- ----------------- ---------- ----------------- ---------- -----------------
  **PSD Table**                                                                                   

  **Country**     **Russian                                                                       
                  Federation**                                                                    

  **Commodity**   **Groundfish,                                                        (MT)       
                  Whole/Eviscerated**                                                             

                  2004                  Revised           2005       Estimate          2006       Forecast

                  USDA Official \[Old\] Post              USDA       Post              USDA       Post
                                        Estimate\[New\]   Official   Estimate\[New\]   Official   Estimate\[New\]
                                                          \[Old\]                      \[Old\]    

  **Market Year                         01/2004                      01/2005                      01/2006
  Begin**                                                                                         

  Beginning       0                     447000            0          427000            0          437500
  Stocks                                                                                          

  Total           0                     2325000           0          2418000           0          2490000
  Production                                                                                      

  Intra-EC        0                     0                 0          0                 0          
  Imports                                                                                         

  Other Imports   0                     607000            0          680000            0          750000

  TOTAL Imports   0                     607000            0          680000            0          750000

  TOTAL SUPPLY    0                     3379000           0          3525000           0          3677500

  Intra-EC        0                     0                 0          0                 0          0
  Exports                                                                                         

  Other Exports   0                     1955000           0          2014500           0          2075000

  TOTAL Exports   0                     1955000           0          2014500           0          2075000

  Domestic        0                     867000            0          937000            0          1002590
  Consumption                                                                                     

  Other Use/Loss  0                     130000            0          136000            0          148000

  TOTAL           0                     997000            0          1073000           0          1150590
  Utilization                                                                                     

  Ending Stocks   0                     427000            0          437500            0          451910

  TOTAL           0                     3379000           0          3525000           0          3677500
  DISTRIBUTION                                                                                    
  --------------- --------------------- ----------------- ---------- ----------------- ---------- -----------------

## Table 4. Production, Supply, and Distribution of Fish Roe, Metric Tons 

  --------------- --------------------- ----------------- ---------- ----------------- ---------- -----------------
  **PSD Table**                                                                                   

  **Country**     **Russian                                                                       
                  Federation**                                                                    

  **Commodity**   **Fish,Urchin                                                        (MT)       
                  Roe/Caviar,Livers**                                                             

                  2004                  Revised           2005       Estimate          2006       Forecast

                  USDA Official \[Old\] Post              USDA       Post              USDA       Post
                                        Estimate\[New\]   Official   Estimate\[New\]   Official   Estimate\[New\]
                                                          \[Old\]                      \[Old\]    

  **Market Year                         01/2004                      01/2005                      01/2006
  Begin**                                                                                         

  Beginning       0                     8900              0          8895              0          9258
  Stocks                                                                                          

  Total           0                     54280             0          54800             0          54890
  Production                                                                                      

  Intra-EC        0                     0                 0          0                 0          0
  Imports                                                                                         

  Other Imports   0                     1500              0          1450              0          1385

  TOTAL Imports   0                     1500              0          1450              0          1385

  TOTAL SUPPLY    0                     64680             0          65145             0          65533

  Intra-EC        0                     0                 0          0                 0          0
  Exports                                                                                         

  Other Exports   0                     18520             0          18900             0          18970

  TOTAL Exports   0                     18520             0          18900             0          18970

  Domestic        0                     23365             0          23687             0          23800
  Consumption                                                                                     

  Other Use/Loss  0                     13900             0          13300             0          13500

  TOTAL           0                     37265             0          36987             0          37300
  Utilization                                                                                     

  Ending Stocks   0                     8895              0          9258              0          9263

  TOTAL           0                     64680             0          65145             0          65533
  DISTRIBUTION                                                                                    
  --------------- --------------------- ----------------- ---------- ----------------- ---------- -----------------

## 

## Table 5. Production, Supply, and Distribution of Crab and Crab Meat, Metric Tons

  ---------------- -------------- ----------------- ---------- ----------------- ---------- -----------------
  **PSD Table**                                                                             

  **Country**      **Russian                                                                
                   Federation**                                                             

  **Commodity**    **Crab and                                                    (MT)       
                   Crabmeat**                                                               

                   2004           Revised           2005       Estimate          2006       Forecast

                   USDA Official  Post              USDA       Post              USDA       Post
                   \[Old\]        Estimate\[New\]   Official   Estimate\[New\]   Official   Estimate\[New\]
                                                    \[Old\]                      \[Old\]    

  **Market Year                   01/2004                      01/2005                      01/2006
  Begin**                                                                                   

  Beginning Stocks 0              1800              0          1100              0          1700

  Total Production 0              103400            0          119300            0          130260

  Intra-EC Imports 0              0                 0          0                 0          0

  Other Imports    0              500               0          500               0          500

  TOTAL Imports    0              500               0          500               0          500

  TOTAL SUPPLY     0              105700            0          120900            0          132460

  Intra-EC Exports 0              0                 0          0                 0          0

  Other Exports    0              91181             0          104900            0          115390

  TOTAL Exports    0              91181             0          104900            0          115390

  Domestic         0              12219             0          13000             0          14100
  Consumption                                                                               

  Other Use/Loss   0              1200              0          1300              0          1270

  TOTAL            0              13419             0          14300             0          15370
  Utilization                                                                               

  Ending Stocks    0              1100              0          1700              0          1700

  TOTAL            0              105700            0          120900            0          132460
  DISTRIBUTION                                                                              
  ---------------- -------------- ----------------- ---------- ----------------- ---------- -----------------