Russia Seafood Annual Report

From: American Embassy, Moscow
To: USDA/FAS Washington D.C.
Country: RS
Year: 1995
Report Code: 54 Post Report Sequence Number: 001
Report Title: Seafood
Report Type: A - Annual Report
Report Subject: Seafood Annual Report
Approved By: Suzanne Heinen
Drafted By: Susan Reid & O.Ovchinnikov
Security Classification: Unclassified, Not Official USDA Data
Date Due (MM/DD/YY): 09/18/95

Table of Contents	Page
EXECUTIVE SUMMARY	1
PRODUCTION AND MARKET TRENDS BY PRODUCT	3
Salmon	3
Bottom-dwelling fish (cod, hake, Korean cod)	4
Crustacea	4
Sturgeon and other types of caviar	5
All fish products, total	6
PRODUCTION	6
General background	6
Key factors influencing the catch volume	10
Seasonal fluctations in the catch	10
Catch volumes by fish species	11
Catch distribution by fishing zones	16
Catch distribution by regions of the Russian	21
Fish farming	25
The illegal catch	26
Fish and seafood production and product range	27
Technological aspects of fish production and	29
Regional aspects of the fish processing industry	31
Interindustry competition	32
CONSUMPTION	35
FOREIGN TRADE	36
General background and trends in froeign trade	36
Business opportunities for U.S. fishing companies	43
FISHERY POLICY	43
Financial management policy	43
Production and pricing policy	44
Capital investments for the fishery industry in	46
Tariff policy	48
Food quality and safety	51
PRICING	51
MARKETING	57
Domestic market opportunities for the imported	57
Market infrastructure and distribution chains	58
CONTACT LIST	60
CONCLUSION	61
-Total Edible Fishery Prods	62
-Fish/Urchin roe/Caviar/Lvr	63
-Salmon, Whl/Evisceratd	64
-Groundfish, Whl/Evisceratd	65
-Crab and Crabmeat	66

EXECUTIVE SUMMARY
The fishing industry plays an important role in the economy of the Russian Federation. In the four years since the breakup of the Soviet Union, Russia has seen a significant decline in domestic seafood and fish production, a deterioration in processing plant and equipment, and a rise in prices for the majority of fish products. In general, Russia's transition to a market economy has resulted in a sharp decline in financial resources available to the owners of capital, thus affecting the industry's future development.

Declining production has had a serious impact on consumption of seafoods. Due to the drop in purchasing power of most people, demand for the most commercially valuable seafood has dropped dramatically.

Added to the problem of tight domestic supplies due to declining production is the fact that exports of fish are rising. Even though fish prices in Russia have risen dramatically, in general domestic prices have not risen to world levels. Thus Russian producers are exporting more of their products for relatively high world prices. Growing exports only add to the domestic problem of declining production by pushing up domestic prices, thus causing consumers to cut back even further on fish purchases.

Relatively high world prices (compared to Russian domestic prices) are offering Russian firms incentives to export. These incentives are encouraging Russian firms -- some for the first time -- to compete with firms in other fish- producing countries, such as Japan, Canada and the United States, for foreign market share. While competition is unsettling for many long-established firms, some of them, in addition to the new, smaller private firms, have learned that they can compete, as is shown in the trade data below.

The import situation is different. Declining production and rising exports have resulted in tighter domestic supplies and correspondingly higher domestic prices. But because Russian fish prices are generally still slightly below world levels, there are few incentives for foreign firms to export to the Russian market. In addition, low Russian incomes and extreme price sensitivity on the part of consumers makes any significant increase in imports quite unlikely in the near future.

The changes in government policy and government resources available for support to the industry have had a significant impact on the production of fish and seafood products in Russia. Economic reforms have reduced the level and effectiveness of government regulation. Generally, central government control over production, price levels, and practices of foreign traders, has diminished. Current trends indicate that the industry will continue to operate at low levels of efficiency for the next two years. Given that there is no way to increase the level of investment by the central government, it is only reasonable to base an analysis of the future of the industry on an assessment of the effect that the new private investors will have on the sector.

Given the critical situation in the industry, significant positive changes should not be expected before the year 2000, even with an increased level of private investment.

In the PS&D tables data for 1994 and 1995 sometimes vary significantly. In addition, revised data for 1994 and 1995 show extremely large changes. For example, for Total Edible Fishery Products, Total Imports, the old 1994 figure is 15,800, while the new fugure is 275,000 MT.

This difference is the result of using different data sources. The old figure is based on data from GOSKOMSTAT, which we know are far too low. The new 1994 figure is based on Customs data, which are far more reliable.

To illustrate how different Customs and GOSKOMSTAT data are, see tables 17, 18 and 19.

Catch and production data for 1994 are estimates. Production estimates for 1993 through 1995 are based on data from different sources (GOSKOMSTAT and the State Fishery Committee).

Production of the most valuable fish, salmon, is subject to minor variations for biological reasons. It is expected that the salmon catch will slightly decrease (by 13%) in 1995 and slightly increase in 1996. At the same time, salmon export figures show an upward trend. Domestic consumption of salmon is therefore expected to decline by about 20% in 1996 over 1994.

Bottom-dwelling fish constitute the major part of total seafood yield in Russia. Stabilization and a slight increase of the bottom-dwelling fish yield in the next two years (by 1% to 2%) are highly probable. The import and export volumes of this product are increasing constantly, by 5% to 15% annually, while domestic consumption remains stable.

Crabs are primarily intended for export sales. Over 70% of the yield is exported, due to extremely small production volumes and high demand in foreign markets. Obviously, this scenario provides a major incentive to expand production in future years; export sales of the product are estimated to increase by 8% in 1996 over 1995.

In 1994 the production of caviar totaled about 30,000 MT. It should be pointed out that the most expensive types of caviar make up a minor portion (about 7%) of total production volume. Caviar exports' share of total fish production is small as well. Exports consist generally of the caviar of valuable species. Prospects for future export sales of caviar are favorable.

All fish products, total
All fish products, in 1000 MT
Indices	1994	1995	1996
	Actual figures	Provisional figures	Estimated figures
fish and seafood yield	3900	4050	4100
Gross production	2270	2400	2450
Including:
-fresh/frozen products	1500	1600	1650
-canned products	225	220	220
-processed otherwise	545	580	580
Gross impoorts sales	275	290	310
including:
-fresh/frozen products	225	230	245
-canned products	5	10	15
-processed otherwise	45	50	50
Gross export sales	1150	1250	1350
including:
-fresh/frozen products	1000	1100	1200
-canned products	7	10	13
-processed otherwise	143	140	137
Total consumption	1395	1440	1410

Fish and seafood yields are expected to rise by 2% to 5% during 1995-1996, and fresh and frozen fish production will increase. Consequently, the export of fish will rise. Increasing consumer demand among higher-income groups in Russia and overseas will provide an opportunity for a further increase in fish production, estimated at 10-13% in 1996. This may result in a small increase in consumption (about 1%).

PRODUCTION
General background
The fishing industry is one of the key industries in the Russian economy. Over the last two decades, a fishing fleet of significant capacity was developed. In 1992 it contained 150,000 ships of various tonnages. Over the past three years, as a result of economic hardship, the fishing fleet size has declined, and equipment has not been upgraded.

In the last few years before the breakup of the Soviet Union, over 10 MMT of fish and seafood were caught annually. For this reason, the USSR could meet domestic demand for fish products and at the same time be among the world's leading exporters of fish and seafoods. Annual export volume totaled over one million MT of fish and seafood, exceeding one billion US dollars. A significant amount of production is now accounted for by new, small private fishing businesses. Best estimates are that the production of these firms amounted to 600,000 to 650,000 MT last year (1994). In view of their independent financial status, and in the absence of efficient government regulatory and law enforcement mechanisms, data on the output of these enterprises is not contained official statistics of the Russian Federation, and can only be estimated. At present, the Russian Federation is among the six leading countries on the basis of catch volume. This group also includes China, Japan, the United States, Peru, and Chile.

The breakup of the Soviet Union has created an interesting situation in Russian trade in fishery products. At the same time that total catch volume was falling, exports were increasing significantly. However, in dollar terms, export sales gains do not match the increase in export volumes, due to the sharp decline in export prices for fish products. The decline in prices faced by Russian exporters is explained by increased competition for foreign buyers among newly-privatized businesses in Russia, and overall by an expansion of the world fishing industry due to rising world demand. Table 1 shows the overall fish production/trade balance in Russia.

These figures show a significant decline in the catch over the last decade. The production of canned and fresh/frozen foods has decreased by over 60% and 40%, respectively. At the same time, fish exports have doubled.

After the recession of 1991-94, and beginning this year, the catch increased noticeably. For the period January though May 1995, the total catch was 2.2 MMT, which is a 6% increase over the same period in 1994. Some of this growth can be explained by non-economic factors. For example, Rosrybkhoz granted domestic producers permission to catch as much as they were able to process, provided that the government credit line would be used efficiently, and regional catch quotas would not be exceeded. According to Mr. Y. Moskaltsov, General Director of Joint Stock Company "Dalryba", who co-ordinates business operations of the regional fleet in the Pacific fishery areas, the federal government has promised the industry additional support if an 11% to 12% fish yield gain is achieved. This government support will include tax cuts, extension of preferential credits (which will be less than the refunding rate of the Central Bank of Russia), reduced rail rates, and technical assistance to update the fishing fleet -- 70% of whose equipment needs replacing.

Generally, based on preliminary results for the current year, it is be expected that fish yield and production will increase this year. According to the forecast of Rosrybkhoz experts, made in February 1995, the catch may reach 3.9 MMT, a 13% gain over 1994. Accordingly, the production of fish and seafoods is expected to increase to 2.3 MMT (a 10% gain), including 650 MMT of cans (a 13.5% gain). A significant increase in fish meal production, which may reach the level of 208,000 MT (30% gain), is predicted as well. This forecast was officially confirmed by Rosrybkhoz experts in March. By the year 2000, Russian fishing experts expect that Russia will attain a stable catch level of 4-4.5 MMT. This level should be reached as a result of the increased yield of herring, sardines, cod and parthole fish. At the end of June, in Russian Federation Duma hearings on the Russian fishery situation, experts reaffirmed this expected growth in fish and seafood production in the current year. According to one official, Mr. Vladimir Karelskiy, growth would be 10-13% this year, which would mean an increase in production from 3.5 MMT in 1994 to about 4.2 MMT in 1995. (We note that Mr. Karelskiy's figures differ from the official data on which our PS&D tables are based. However, all data and all forecasts by industry analysts show an upward trend in the future catch size, with only slight differences in timing and degree.)

It is our opinion that the increase in predicted catch size will be achieved, in large measure, simply by a more accurate recording of production in the official statistics, rather than by more effective performance by the fleet. Under this assumption, actual growth will be in the range of 3-7%, rather than 10-13%.

Note to this subsection: We have developed certain estimation methods to use in this report. The PS&D tables and several other sections of this review contain weighted estimates of production and trade, based on data sampling and evaluations by industry observers, as well as on figures from official sources. We feel that this is the approach which best provides an accurate picture of the situation in the Russian fishing industry, given the absence of a sufficient data base.

Annual currency exchange rates used in this report are as follows unless otherwise noted. Rates used in individual months may differ as noted.

1995: 4,500 rubles/dollar (forecast)
1994: 2,200
1993: 930
1992: 192
1991: 0.58 (official)
1990: 0.58 (official)

Earlier years as noted Key factors influencing the catch volume The quality and volume of the catch largely depend on a number of economic and natural factors. These include seasonal fluctuations, fish populations and types, regional and local features of the fishing areas.

In the case of Russia, the most important factors influencing catch size are financial ones. The more important of these are discussed in some detail in the sections below, and include (1) the age and state of repair of the fleet, and of fish processing plants and equipment; and (2) the level of government subsidies to the industry. Seasonal fluctuations in the catch Quarterly data on the fish catch over the period 1991 through 1994 are shown in Table 2.

The common feature of these data is that the highest yield of fish and seafoods is observed during the first quarter of each year. Over the past 4 years, the first quarter catch made up 32% to 40% of the annual yield. Accordingly, the lowest catch level is observed during the last qarter of the year. Figures for the second and the third quarters differ only slightly from each other and from year to year.

These data may not be perfectly accurate in showing quarterly variations, because reports on the catch from different regions are often delayed, and may not be fully adjusted for in later data revisions. This may be the reason for such significant differences between the first and fourth quarter figures.

Table 3 and 4 present catch volumes by fish species. The figures for 1993 are the last reliable figures available, because those reported for 1994 are incomplete. The only way to assess the catch composition is to analyze the figures for 1993.

Table 3. The catch composition (including algae) in the USSR and Russia (since 1992), wet weight, 1000 MT tons
Item	1992	1993	1994
TOTAL	5523.8	4467.7	3470.0
Carp	165.4	168.9	~
including:
Caspian roach, sea-roach, roach	28.5	25.6
Carp	47.9	57.3
Bream	29.5	28.8
Silver carp	31.3	30.7
Other	28.2	26.5
Other types of fresh water fish	49.6	29.2
including:
Sheat-fish	5.8	3.9
Pike-perch	8.0	5.5
Pike	6.1	5.3
River perch	4.6	2.2
Other	25.2	12.3
Sturgeon	8.8	4.8	3.0
including:
Sturgeon	5.2	2.9
Starred sturgeon	3.0	1.4
Great sturgeon	3.0	1.4
Sterlet	0.1	0.1
Other	0.0	0.1
Fresh water eels	0.1	0.4
Salmon, whitefish, smelts	578.4	331.5
including:
Humpback	86.9	106.0
Siberian salmon	21.3	19.2
Capelin	425.6	170.5
Red salmon	15.7	13.1
Other	28.9	22.7
Herring	112.2	75.3
including:
Caspian Sea sprat	111.0	73.4
Herring	0.3	1.5
Sardelle	1.0	0.4
Other	0.0	0.0
Flatfishes	103.2	77.8
including:
Plaice	90.1	71.1
Greenland halibut	7.1	5.5
Atlantic halibut	5.9	1.3
Other	0.1	0.0
Cod, hake, rattails	3014.4	2773.5
including:
Korean cod	3240.7	2114.5
North poutasseau	159.4	137.8
South poutasseau	28.0	2.6
Atlantic cod	182.9	250.9
Pacific cod	154.3	95.8
Silver hake	11.8	7.1
Navaga	53.9	43.7
Rattails	25.3	14.8
Other	58.1	106.5
banded sea perch, crucian carp, etc.	139.6	86.6
including:
Lantern eye fish	47.0	0.1
goby	38.5	27.5
Banded sea perch	21.2	34.2
Rasp	22.6	16.9
Ohter	10.3	7.8
Horse-mackerel, grey mullet and other allied species	359.3	334.3
including:
Non-classified jack mackerel	104.7	78.5
Cape mackerel	95.5	136.6
Kunene horse-mackerel	72.9	58.0
New-Zealand horse-mackerel	2.9	4.3
Peru horse-mackerel	1.4	0.0
Pacific saury	50.2	48.1
Other	1.7	8.9
Herring, blue sprats	550.2	292.4
including:
Ivasi sardine	165.3	4.3
Sardinella	65.6	31.9
Sardine	144.6	67.5
Pacific herring	109.3	115.2
Atlantic herring	14.7	35.6
European blue sprat	2.3	0.9
Baltic herring	28.0	23.5
Other	20.4	13.6
Tuna fishes, pelamyds	24.2	33.0
Parhole fishes, cutless fishes and other allied species	95.3	78.6
including:
Cutless fish	22.5	17.5
Atlantic parthole fish	71.8	60.8
West parthole fish	1.0	0.3
Other	0.0	0.0
Sharks, skates	0.9	0.5
None-classified sea fishes	42.1	11.5
Fresh-water fishes, crawfish	0.0	0.0
Crabs	38.8	35.3
Spiny lobsters, lobsters	0.0	0.0
Shrimps	23.5	25.0
Krill	83.0	2.2
Long-necked clams	0.4	0.1
Deep-sea scallops	8.2	6.9
Squids, octopuses, cuttlefish	138.0	87.9
Other sea mollusks	0.9	1.5
Sea urchins and other echinodermata	5.9	2.5

These figures indicate that while the catch of specific fish species has dropped, the yield on traditional types has remained stable. The catch of high-value sturgeon and salmon decreased by 47% and 43%, respectively, in 1993 versus 1992. The yield of cod/hake, and horse-mackerel/ grey mullet declined only by 8 and 7 percent, respectively. A sharp drop in herring and blue sprat production was seen. However, the size of the catch of expensive seafoods such as crabs, shrimps, etc., has only slightl decreased, while the tuna and pelamyd catch has increased by 36%.

Table 4. Catch composition in 1993, classified by production volume, in 1000 MT tons.
Fish Type	Catch	Percentage to total
	1000 MT	%
TOTAL	4467.7	100.0
1. Cod, hake, rattails	2773.5	62.1
2. Horse-mackerel, grey mullet	334.3	7.5
3. Salmon, whitefishes	331.5	7.4
4. Herring, blue sprats	292.4	6.5
5. Carp	168.9	3.8
6. Squid, octopuses, cuttlefish	87.9	2.0
7. Banded sea perch, crucian carp	86.6	1.9
8. Parthole fishes, cutless fishes	78.6	1.8
9. Flatfishes	77.8	1.7
10.Migratory herring	75.3	1.7
11.Crabs	35.3	0.8
12.Tuna fishes, pelamyds	33.0	0.7
13.Other fresh-water fishes	29.2	0.7
14.Shrimps	25.0	0.6
15.Unclassified sea fishes	11.5	0.3
16.Deep-sea scallop	6.9	0.2
17.Sturgeons	4.8	0.1
18.Sea urchins and other Echinoderm	2.5	0.1
19.Krill	2.2	0.1
20.Other sea mollusks	1.5	0.0
21.Sharks, skates	0.5	0.0
22.Fresh-water eels	0.4	0.0
23.Long-necked clams	0.1	0.0
24.Fresh-water fishes, crawfishes	0.0	0.0
25.Spiny lobsters, lobsters	0.0	0.0

1. Korean cod	2114.5	47.3
2. Atlantic cod	250.9	5.6
3. Capelin	170.5	3.8
4. North poutasseau	137.8	3.1
5. Cape mackerel	136.6	3.1
6. Pacific herring	115.2	2.6
7. Humpback	106.0	2.4
8. Pacific cod	95.8	2.1
9. Unclassified horse-mackerel	78.5	1.8
10.Caspian Sea sprat	73.4	1.6
11.Flatfish	71.1	1.6
12.Sardine	67.5	1.5
13.Atlantic parthole fish	60.8	1.4
14.Kunene horse-mackerel	58.0	1.3
15.Carp	57.3	1.3
16.Pacific saury	48.1	1.1
17.Navaga	43.7	1.0
18.Atlantic herring	35.6	0.8
19.Banded sea perch	34.2	0.8
20.Sardinella	31.9	0.7
21.Silvercarp	30.7	0.7
22.Bream	28.8	0.6
23.Goby	27.5	0.6
24.Caspian roach, sea-roach, roach	25.6	0.6
25.Balric herring	23.5	0.5
26.Siberian salmon	19.2	0.4
27.Cutless fish	17.5	0.4
28.Rasp	16.9	0.4
29.Rattails	14.8	0.3
30.Red salmon	13.1	0.3
31.Silver hake	7.1	0.2
32.Pike-perch	5.5	0.1

As in the past, cod and hake constitute the largest portion of the total catch - over 62 percent of the total. Among them, Korean cod predominates over other commercial types, yielding nearly 50 percent of the total.

Table 4a. Salmon fishing seasons of 1992 - 1994, the Far East, in 1000 MT tons
	1992	1993	1994
			Amount	Share*
	1000 MT	1000 MT	1000 MT	%
By fish species
Humpback	54.3	108.0	119.7	77.3
Siberian salmon	13.0	23.6	22.4	14.5
Red Salmon	5.2	8.9	8.7	5.6
hoopid salmon	1.1	1.6	1.4	0.9
Artic salmon	1.1	61.4	1.1	0.7
Chinook salmon	1.0	1.3	1.0	0.7
Other	0.6	0.3	0.4	0.2
By regions
Eastern Sakhalin	15.1	26.6	39.4	25.5
Western Kamchatka	14.5	61.8	22.2	14.3
Continental shore of the Sea of Okhotsk	14.3	15.2	12.8	8.3
The Amur	6.5	12.0	5.5	3.5
Western part of the Bering Sea	2.1	3.5	2.4	1.5
Northwestern Sakh	2.2	2.3	2.0	1.5
The Sea of Japan	2.1	3.3	1.8	1.1
total	76.3	205.1	154.8	100.0

Since 1990 the majority of fish (about 70%) have been caught in the 200-mile economic fishing zone of Russia. The importance of this zone has been increasing steadily due to the declining contribution of other fishing (see Table 5).

These figures indicate that the catch volumes in non-Russia fishing zones are decreasing steadily. Thus, the share of total fish volume caught in deep-sea areas has dropped from 14% in the 1970s to 3% today, while the catch volume in inland basins has decreased by about 80%. To a lesser extent, similar declines are observed in the 200-mile zones of other countries.

A similar situation is observed for Russian vessels fishing within the 200-mile zones of other countries, where Russia is allocated a fixed quota. In 1994 the Russian Federation secured quotas for 1,097,000 MT of fish in the fishing zones belonging to 17 countries. However, the quotas allocated by Japan have not been used (only 7,000 out of 1,000,000 fishing quota MT have been caught). No commercial operations have been conducted in the territorial waters of China and South Korea due to the absence of sufficient ivasi and parthole fish resources. Nor have Russian fishing boats fully taken up quotas allocated by Canada. However, the Russian catch volume in Canadian territoral waters was 17,700 MT of fish, including 3,700 MT of halibut caught under commercial contracts. The quotas allocated by Norway for trout fishing and by Greenland have been taken up by 63 and 52%, respectively.

Even though 1994 fishing quotas were not used 100 percent, Russia's 1995 quotas (which equaled 981,000 MT of fish) are not fully being used either. The two main reasons for a decline in Russia's catch in foreign waters are first, strict regulation of commercial fishing by foreign countries, and second, the difficulty in obtaining fuel due to increasing costs.

Table 6. Catch distribution in 1992-1994 by fishing regions in the Russian Federation, in 1000 MT (algae excluded).
Region	1992	1993	1994*	1994 vs
	Total		1993 (%)
TOTAL	5494.1	4459.4	3470.0	77.8
Inland regions
(inland basins)	378.0	307.0	152.6	49.7
Sea regions	5116.1	4152.4	3322.8	80.0
Atlantic ocean	1750.8	1336.2	1020.4	76.4
Northwestern Atlantic	34.1	26.5	9.2	34.7**
Northeastern Atlantic	970.8	833.3	632.1	75.9**
Central and Western Atlantic	0.0	0.0	0.0	0.0
Central and Eastern Atlantic	368.9	198.6	149.5	75.3
The Black Sea and the Azov Sea	14.4	6.7	25.8	385.1
Southwestern Atlantic	93.1	47.9	11.8	24.6
Southeastern Atlantic	189.1	220.5	192.0	87.1
Antarctic part of the Atlantic Ocean	80.5	2.5	0.0	0.0
The Indian Ocean basin	20.6	10.9	16.0	147.0
Western part of the Indian Ocean	17.6	10.9	16.0	147.0
Eastern part of the Indian Ocean	0.0	0.0	0.0	0.0
Antartic part of the Indian Ocean	3.1	0.0	0.0	0.0
The Pacific Ocean basin	3344.7	2805.3	2312.2	82.4
Northwestern Pacific	3227.3	2742.7	2253.1	82.1
Northeastern Pacific	0.0	0.0	0.0	0.0
Central and Western Pacific	2.2	18.9	5.8	30.7
Central and Eastern Pacific	0.0	0.0	0.0	0.0
Southwestern Pacific	82.9	43.7	53.2	121.7
Southeastern Pacific	32.4	0.0	0.0	0.0
Antarctic part of the Pacific Ocean	0.0	0.0	0.0	0.0
* preliminary assessments; ** including "small business" output

Russia's main fishing regions are the Nothwestern Pacific and Northeastern Atlantic, which account for over 80% of the total catch volume. The 22% decline in production in 1994 was associated with smaller volumes caught in the sea regions and inner water basins, here the decrease was 800,000 and 150,000 MT, respectively. As for traditional fishing regions, the most severe drop in catch volumes were noted in the Pacific (by 600,000 MT), including the main fishing area of the Northwestern Pacific.

The contribution of the inland seas (The Caspian, Black and Azov Seas) to total seafood production is quite small. Their share amounts to only 0.3% of the total catch volume. At the same time, they play an important role in the production of specific seafoods, including caviar. The Volga-Caspian sea region is one of the key fishing areas in Russia -- 90% of the world's reserves of sturgeon are found here.

Volumes and composition of the catch in inland seas are presented in Tables 7 and 8.

Table 7. Sturgeon fishing seasons, 1992-1994, in the Caspian Sea, MT
Region	1992	1993	1994
Astrakhan region	6766	3236	2574
Kalmykia	250	160	117
Dagestan	80	30	269
Total	7106	3426	2960
Including:
- Sturgeon	N/A*	N/A	1385
- Starred sturgeon	N/A	N/A	1441
- Great sturgeon	N/A	N/A	133
* N?/A - no data are available
Table 8. The catch in the Black and Azov Seas, MT
	1992	1993	1994*
TOTAL	14356	6700	25760
Carp	650	1642	1390
Other fresh-water fish	846	567	870
Sturgeon	878	904	1010
Migratory herring	977	317	670
Flatfish	77	72	100
Banded sea perch, crucian carp other allied species	145	232	320
Horse-mackrel, grey mullet, other	2	65	0
Herring, blue sprat	10515	2831	21400
Shark, skate	69	25	0
Long-necked clam	5	0	0
Other seafoods	192	29	0
*preliminary assessments

The contribution of the inland seas (the Black, Azov, Caspian and White Seas) has been steadily decreasing, with the catch volume dropping from 5% to 7% in 1990 to 2.7% in 1994, with 2% forecast in 1995. These declines are explained mainly by political factors. With the creation of the Commonwealth of Independent States, some of the fishing facilities that formerly belonged to the Soviet Union now belonged to Ukraine and other countries. In addition, within Russia, the old centralized system of oversight over fishing regions, fleets, ports, coastal facilities was severely weakened.

Today, the major facilities for sprat and anchovy catch and production are located in the territory of Ukraine. As a result, previously-forecast catch volumes of Caspian Sea sprat and Black Sea sprat have not been realized, while commercial fishing of Black Sea anchovy and Azov Sea sardelle has been practically stopped.

Currently, the most complicated domestic fishing issues in Russia concern the Caspian Sea situation. As mentioned above, the old Soviet system of regulation and control of domestic fisheries has weakened. In the past, fishing for sturgeon was forbidden during certain times of the year in order to restore the fishery's reserves. Over the past three years, poaching -- which was not unknown in Soviet times -- has been unprecedented.

The result of poaching has been a decline in the officially-reported sturgeon catch. In 1983, 16,700 MT of sturgeon were reported caught in Russia (compared to the total catch of 25,000 MT in the USSR). Eleven years later, in 1994, only 3,000 MT were reported caught. In the past, about 30% of the catch was taken illegally and went unrecorded in official statistics. Now the figure is estimated to be around 90%. This translates into a 1994 sturgeon catch as large as 30,000 MT. Unfortunately, we cannot empirically verify these figures. However, in this case we believe that the anecdotal data are good.

In 1994, as a result of measures taken by fish protection services, 10.5 MT of caviar were confiscated and 7 illegal caviar packing facilities were discovered in the Astrakzan region alone.

Catch distribution by regions of the Russian Federation
The territorial and organizational distribution of fish production in Russia is presented in Tables 9 and 10 below.

Table 9. Fish catch and production at regional manufacturing divisions and collective fishery enterprises in 1993.

Figures	1992	1993	1994		1994 vs
			Total	% of total	1992 (%)
TOTAL YIELD	5084.9	2346.0	2346.0	100.0	63.8
including:
Dalryba	2028.1	1718.2	1401.3	43.2	69.1
Collective fishery enterprises	1335.8	1183.0	970.0	29.9	72.6
Sevryba	1093.9	797.8	566.3	17.4	51.8
Kalinigradryb-prom	386.7	198.3	192.3	5.9	49.7
Novorossiysk-rybprom	75.3	91.5	50.4	1.6	66.9
Kaspryba	74.9	45.8	31.3	1.0	41.8
Lenrybprom	64.8	46.5	21.3	0.7	32.9
Other enterprises	25.4	14.7	13.6	0.4	53.5
FISH AND SEAFOOD OUTPUT, INCLUDEING CANNED FISH	2927.0	2399.3	1866.6	100.0	63.8
Including:
Dalryba	1546.2	1321.0	1009.6	54.1	65.3
Sevryba	756.7	539.7	440.7	23.6	58.2
Collective fishery enterprises	203.0	199.0	188.1	10.1	92.7
Kaliningradryb-prom	250.3	149.5	143.3	7.7	57.3
Kaspryba	95.2	71.2	45.7	2.4	48.0
Novorossiyskryb-prom	86.5	99.3	37.2	2.0	43.0
Lenrybprom	35.9	39.3	21.7	1.2	60.4
Other	47.0	35.5	30.7	1.6	65.3
CANNED FISH (mln Cans including	1153.5	724.1	431.0	100.0	37.4
Dalryba	687.0	403.3	232.7	54.0	33.9
Kaspryba	133.9	80.8	47.2	11.0	35.3
Sevryba	132.5	77.0	34.6	8.0	26.1
Kaliningradryb-prom	77.6	47.6	31.1	7.2	40.1
Collective fishery enterprises	39.0	46.9	29.0	6.7	74.4
Lenrybprom	2.6	3.2	0.9	0.2	34.6
Other	80.9	65.3	55.5	12.9	68.6
FEED MEAL	262.9	208.2	164.2	100.0	62.5
Including:
Dalryba	152.5	134.4	114.5	69.7	75.1
Sevryba	67.7	40.9	25.8	15.7	38.1
collective fishery enterprises	7.6	9.9	9.4	5.7	123.7
Kaliningradryb-prom	18.4	10.4	8.3	5.1	45.1
Novorossiyskryb-prom	3.6	5.6	2.6	1.6	72.2
Kaspryba	7.0	3.5	1.5	0.9	21.4
Other	2.6	1.2	1.3	0.8	50.0
Lenrybprom	3.5	2.4	0.8	0.5	22.0
FISH FODDER AND SCRAPS FOR WILD-ANIMAL BREEDING FARMS	318.0	248.1	123.5	100.0	38.8
Including:
Sevryba	119.6	142.1	51.1	41.4	42.7
Dalryba	134.2	50.7	43.4	35.1	32.3
Kalinigradryb-prom	34.6	25.3	20.2	16.4	58.4
Collective fishery enterprises	10.8	8.2	5.3	4.3	49.1
Lenrybprom	11.5	3.1	3.4	2.8	29.6
Novorossiyskrybp	7.3	0.5	0.1	0.1	1.4

The Far East region plays a leading role in fish production. It contributes over 70% to the overall catch and fish food production volume (inclusive of the products manufactured by collective fishery enerprises located in the region). The region ranks second only as regards the delivery of fish fodder and scraps to wild-animal breeding farms, where its share accounts for 30%. The Northern regions of Russia account for about 10% of Russia's total catch volume, while the Baltic countries' share is 4%.

As regards the enterprises involved in fish catch and production operations, "Dalryba", a joint-stock company, accounts for about 43% of the overall production volume. Collective fishery enterprises, which are largely Russian- financed and operated, account for about 30% of production.

Table 10. Fish and seafood production by regions of the Russian Federation, 1994, and January through May 1995, 1000 MT
Region	1994	1995	1994
		Jan-May	% of total	vs Jan-May
Russian Federation	3400	2165	100.0	106
Including:
Primorskiy kraiy	1100	842	38.9	112
Kamchatka region	587	446	20.6	138
Sakhalinskaya region	368	225	10.4	88
Murmanskaya region	490	169	7.8	73
Khabarovskiy kraiy	168	158	7.3	138
Kaliningradskaya oblast	211	93	4.3	92
Arkhangelskaya region	133	62	2.9	86
Astakhanskaya region	81	48	2.2	100
Magadan region	62	40	1.8	89
Other	199	82	3.8

Fish farming
During the period from 1990 to 1992, 7.5 to 8.3 mln fry, including 800,000 salmon young fish were released into Russian waters annually. Active measures to introduce salmon and sturgeon into the Caspian Sea, Siberian salmon and striped perch into the Sea of Azov, and humpbacks into the Barents Sea were undertaken. Far East crabs have been successfully introduced into the Northeastern Atlantic.

As of 1991, eight seaweed farms, nine mollusk farms, and 6 marine culture and fish farms were operating. Together, they produce an estimated 30,000 MT of seafoods annually.

Data on commercially valuable fry introduction in 1992-1994, and forecast figures for 1995 through 2000, are presented in Table 11.

Table 11. The introduction of commercially valuable fry in the Russian Federation, 1992-2000, in MT Headings: 1.Total in Russia 2.Sturgeon (Sea of Azov) 3.Great sturgeon 4.Various fresh-water fish (Don river) 5.Salmon 6.Omuls (Lake Baikal)

The illegal catch
Fish poaching is a serious problem in Russia. Poaching is worst in the Caspian Sea and Far East regions. In the Caspian Sea and adjacent regions, there is an enormous illegal catch of commercially valuable fish species, mainly sturgeon. In the Russian Far East, large unauthorized operations conducted by foreign fishing boats are of concern both to the industry and to the central government.

The scope of poaching is so great that the Russian government is taking some serious prevention measures. Since 1993, large-scale enforcement actions have taken place in Far East territorial waters of the Russian Federation. According to border officers, budgeted funds spent on one large operation called "The fishing season-94" were highly effective. Since they began, these measures have been estimated to save the government about 3.5 trillion rubles (approximately $1.5 billion). In addition, direct returns to the treasury in the form of penalties for the violation of territorial waters totaled 1 billion rubles ($350,000). Regular operations have resulted in decreased poaching activity -- 300 cases in 1994 versus 9000 cases in 1993.

Fish and seafood production and product range
Market reforms in Russia have resulted in the output of the majority of fish products dropping dramatically, which is well illustrated by the figures presented in Table 12. Over the past four years, the production of smoked fish has fallen by about 65%, while the decline in production of other cooked products has been equally dramatic.

Table 12. Fish products output in the Russian Federation in 1991-1994, in 1000 MT
Item	1991	1992	1993	1994	1994 vs
					1993 %
Gross output of fish and seafood	6893.4	5239.0	4467.7	3470.0	77.7
including:
Fish cught in ponds and other types of fish hatchery farms	125.9	79.3	66.6	52.5	78.8*
Food fish products including canned fish	3762.7	3123.0	2790.5	2270.0	81.3*
food fish products excluding canned fish	3090.7	2658.0	2354.3	1907.0	81.0
among them:
Live and clooed fish	360.0	324.0	241.4	191.5	79.3
Frozen fish	1878.6	1841.0	1678.8	1343.0	80.0
Frozen fillets	70.0	30.1	50.3	44.7	88.9
Salted fish (except herring)	98.8	51.4	41.5	32.4	78.0
Salted herring	76.2	44.2	61.0	47.0	77.0
Smoked fish	210.9	116.0	96.6	76.3	79.0
Dried and sun-dried fish	23.5	16.2	13.0	11.6	29.0
Spiced-salted and marinaded fish	21.2	14.0	8.6	4.8	56.0
Precooked fish	63.2	25.9	17.2	7.9	46.0
Cured fillet of sturgeon and other fish	5.2	3.3	2.7	1.9	71.0
Caviar	23.3	19.6	31.7	30.4	96.0
including:
- Sturgeon caviar	1.0	0.6	0.3	0.2	73.2*
- Salmon caviar	4.3	1.6	2.6	2.1	79.4*
- other fish caviar	18.1	17.4	28.7	28.1	97.8*
Other types of fish products	259.8	172.3	111.6	115.5	103.5
Canned fish,
- in 1000 MT	672.0	465.0	364.4	201.2	55.2*
- in mln cans	1920.0	1329.0	1041.0	575.0
including:
- Canned crabs,
in 1000 MT	2.1	2.1	1.1	0.9	76.6*
in mln cans	6.1	5.9	3.1	2.4
Inedible products,
Total	N/A **	672.2	526.4	480.0	91.2*
Including:
-Whale-oil, fish oil carcass oil	N/A	42.9	18.5	N/A	-
Including:
- Industiral	N/A	42.7	14.7	N/A	-
- Edible	N/A	0.27	0.07	N/A	-
- Pharmaceutical	N/A	N/A	3.7	N/A	-
- Feed meal	N/A	266.4	209.7	N/A	-
- Feed flesh	N/A	0.68	0.21	N/A	-
- (fish and seafood by-products, feed mince for animal breeding farms)	N/A	353.4	259.8	N/A	-
Including:
- feed mince	N/A	9.8	4.9	N/A	-
- feed krill	N/A	34.8	3.7	N/A	-
Other inedible products	N/A	8.8	38.2	N/A	-
Including:
- Sodium alginate	N/A	0.16	0.11	N/A	-
- Fish skin	N/A	0.25	0.20	N/A	-
- Agar and agaroid	N/A	0.17	0.19	N/A	-
* Estimated values; **N/A- no data are available

At present, about 300 large refrigerating facilities are operating in the industry, in addition to cold storage facilities located at ports.

Technological aspects of fish production and processing; Product quality and the factors responsible

The breakup of the long-term links between industrial fishery facilities and processing plants has resulted in serious dislocations in the industry. The irregularity of raw material deliveries has meant low capacity utilization, while the low profitabilty of such facilities has precluded their timely maintenance and upgrading. Consequently, the degree of wear and tear on the equipment has been gradually increasing over the past few years. Real hardship is faced by the processing plants established during the 1930s - 1940s, whose equipment and technologies have been traditionally financed from the federal budget. For example, last year, worn-out assets reached 45% at the largest and oldest fishery plant located in the Far East - the joint-stock company "Primorrybprom". This enterprise, established in 1930, accounts annually for about 3% of overall fish and seafood production and 6% of the canned fish total output in Russia.

Enterprises established 15 to 20 years ago and equipped with comparatively modern machinery have some productive reserves, which are being gradually depleted from year to year. For example, plant and equipment of the joint-stock company "Dalryba", the leading enterprise of the Vladivostok trawl and refrigerated cargo fleet base, which annually produces 7% of the total fish and seafood output and 12% of canned fish, are estimated by company analysts to have depreciated 30% in the 20 years since its establishment in 1974.

The fish processing industry in Russia has a great need for conventional fish processing lines; the trend in the world fishing industry clearly shows the shift towards intensive and more sophisticated methods of fish processing. The lack of infrastructure and the poor state of repair of many industrial facilities, makes storage, transportation and marketing of the product difficult and relatively expensive.

Finally, one of the overall political objectives of the agro-industrial complex in Russia is to ensure food safety. The use of worn-out equipment and outdated technologies for food production in he absence of a sufficiently large base of governmen support results in poor quality food products entering the market. In the past, this was a serious political problem for plant managers; today, it is an economic problem due to foreign competition on the retail side of the processed fish market.

There are other gaps in the processing industry system. In view of the vast territory of the country and the fact that fishing zones are far removed from distribution and sales areas, proper packaging and processing of fish products is of major importance. Product losses along the distribution chain are the result of inadequate quality control and somewhat primitive conditions is the packaging sector of the industry. In Soviet times, retail stores generally received fish and seafoods in large packages unsuitable for consumers' use and storage. With the advent of foreign competition, this situation is beginning to change, albeit slowly.

Table 13. Number of fish processing plants (facilities) by regions of Russia, as of 1994

Abbreviations: NW - Northwestern region; N- North region; C- Central region; VV - Volga-Vyatka region; CCh - Central Chernozem region; P - Povolzhskiy region; NC - North Caucases; Ur - Urals; WS - Western Siberia; ES - Eastern Siberia; FE - Far East.

Product	Region										Total
	NW	N	C	VV	Cch	P	NC	Ur	WS	ES	FE
Fish	10	13	9		2	14	5	10	8	10	38	119
Sun-dried fish		1	1			5	1	2			1	11
Smoked fish	6	9	4		1	6	3	3	2		2	36
Salted fish	5	7	2			10	1				7	32
Food fish products	8	4	3	5	2	10	9	1	16	15	7	80
Salted herring	5	4	2	1		5				1	5	23
Canned fish	17	11	2			4	2		11	1	31	79
Precooked fish	7						2					9
Shrimp (including frozen)											3	3
Caviar, total			1			4					15	20
including:
- Salmon caviar											10	10
- Korean cod caviar											4	4
- Sturgeon caviar						4						4
- Cod caviar			1								1	2
Fish meal	3	2					2	1			6	14
Total by regions	61	51	25	6	5	62	23	18	38	27	130	446
% of the total	13.7	11.4	5.6	13.9	1.1	4.0	5.2	6.1	8.5		29.1	100.0

Comment: the number of plants should be interpreted as the number of industrial facilities producing this or another type of product (brands); actually, each plant produces several types of products and may be mentioned in the table more than once.

At present, the total number of Russian fish processing plants is estimated at 450 to 500. Table 13 presents data on the regional distribution of fish processing facilities. The largest concentration, about 30% of all plants, is in the Far East region, while the Northwestern and Povolzhiye regions each account for about 14% of such facilities.

Interindustry competition
Fish and seafood are the traditional sources of protein in the diet consumed by the majority of the population in Russia. The high level of fish consumption was explained by the fact that prices for fish products were rather low as compared to other foodstuffs. At present, however, the change in food prices and purchasing power parity has substantially reduced domestic Russian demand for fish products. Table 14 and 15 below present the change in the price competitiveness of fish and seafoods versus other staple foodstuffs.

Table 14. Index of average prices for selected food products in 1990-1995, in dollar equivalent and ruble equivalent
Product	1990	1992	1993	1994	1995
		Dec	Dec	Dec	June
Dollar/ruble	0.58	450	1250	3500	4520
exchange rate
I. Dollar equivalent prices
Potato*	0.17	0.07	0.18	0.22	0.47
Salted herrings	1.90	0.60	2.23	1.19	2.12
Frozen fish	1.38	0.29	0.85	0.76	1.53
Canned fish in oil	1.38	0.22	0.78	0.62	1.46
Cheese	5.34	0.89	2.19	1.87	4.90
Pork	3.10	0.56	1.90	1.09	2.94
Cooked sausage	4.31	0.66	2.42	1.74	3.92
Vermicelli	1.03	0.16	0.43	0.39	0.87
white bread	0.86	0.10	0.25	0.29	0.70
Live fish	2.24	0.29	1.15	-	1.71
Millet	0.52	0.11	0.18	0.16	0.37
Beef	3.45	0.44	1.58	0.94	2.48
Smoked fish	4.31	0.58	2.69	-	2.97
Eggs (per dozen)	1.72	0.20	0.58	0.30	0.78
Poultry	5.17	-	1.76	1.70	2.22
II. Indexes of ruble's price, 1990 = 1.00
Potato*	1	300	2300	7690	21220
Salted herrings	1	245	2536	3780	8728
Frozen fish	1	163	1325	3339	8649
Canned fish in oil	1	125	1225	2694	8238
Cheese	1	129	884	2113	7138
Pork	1	139	1317	2121	7374
Cooked sausage	1	118	1208	2430	7085
Vermicelli	1	117	900	2272	6540
White bread	1	90	620	2000	6302
Live fish	1	100	1108	-	5945
Millet	1	167	767	1850	5643
Beef	1	100	985	1650	5609
Smoked fish	1	104	1346	-	5378
Eggs (per dozen)	1	90	730	1043	3518
Poultry	1	-	733	1980	3338
* The price for potatoes is only indicative, due to seasonal fluctuations.

The general tendency of the above data shows a sharp and steady increase in prices for staple protein-rich foodstuffs. Clearly, fish products rank first among other foodstuffs in terms of price increases. The cost of live and smoked fish has increased by 4,000 ercent over the period 1990 through 1994. The price increase for frozen fish and poultry has been practically identical at 3,300 ercent. Furthermore, even such high-value products as pork, beef and eggs are cheaper than fish -- a situation that Russians find very strange.

The following table shows purchasing power parity of certain staple products vis-a-vis frozen fish. It answers the question: One kilogram of each of the staple products listed below will buy how much frozen fish? Numbers are expressed as ratios.

Table15. Purchasing power parity: ratio of the prices of various staple food products to the price of frozen fish, 1990-1994
Product	1990	1992	1993	1994	1995
		December	December	December	June 26
Potato	0.15	0.23	0.22	0.29	0.31
Canned	1.00	0.77	0.92	0.81	0.95
fish/oil
Cheese	3.75	3.08	2.58	2.45	3.20
Pork	2.25	1.92	2.24	1.43	1.92
Cooked sausage	3.13	2.27	2.85	2.27	2.56
Vermicelli	0.75	0.54	0.51	0.51	0.57
White bread	0.63	0.35	0.29	0.37	0.46
Live fish	1.63	1.00	1.36	-	1.12
Millet	0.37	0.38	0.22	0.21	0.24
Beef	2.50	1.54	1.86	1.24	1.62
Smoked fish	3.13	2.00	3.17	0.00	1.94
Eggs (per dozen)	1.25	0.69	0.69	0.39	0.51
Poultry	3.75	-	2.08	2.22	1.45

The above data clearly show that the competitiveness of fish products as compared to other staple foodstuffs has significantly decreased over the past few years. For example, while in 1990 the cost of 2.5 kilos of frozen fish equaled the price of one kilo of beef, in 1994 only 1.2 kilo of frozen fish was equivalent to one kilo of beef.

Over the past few years, the fish and seafood consumption rate has dropped from the level of 20 to 23 kg per capita in 1985-1990 to 16 kg n 1991 and 9.8 kg per capita in 1994, according to official statistics. This downward tendency is explained by the sharp increase in prices for fish.

The table below shows the purchasing power parity of Russian incomes and pensions in terms of frozen fish. It answers the question: Each year, how many kilos of frozen fish can the average Russian salary (or pension) buy?

Fish consumption varies from region to region of the Russian Federation. Generally, consumption depends on the level of supply and traditions in the local community. In certain regions, e.g. Kaliningradskaya and Murmanskaya in the Far East, the level of fish consumption is comparable to that of Norway, Portugal, and Japan. However, in the regions with traditionally high consumption of meat products, such as Kalmykiya, the Urals, and Siberia, the demand for fish products is quite limited. I addition, fish and seafood in the major fishing areas are far less expensive than in the regions of mass consumer demand, due to the absence of high storage and transportation costs, which contribute about 60-80% to the retail price.

General background and trends in foreign trade
The existing system of data collection in the fishing industry is far from perfect, largely because the majority of fishing operations are conducted outside the area of customs control. Records on volumes of fish caught outside the territorial waters of the Russian Federation are inaccurate because much product is never physically brought to shore and cleared through Customs, but is traded directly from the oat. Information provided by the Customs Committee of the Russian Federation, which has been the principal official source of statistical data on foreign trade since 1994, therefore generally underestimates values for the fish catch exported by Russia.

The second major source of official foreign trade information is the Federal Committee on Statistics of the Russian Federation (GOSKOMSTAT), which processes and disseminates to the public the data that is collected by the Ministry of Foreign Trad Affairs. Even though these data go beyond reported data and contain estimates, still they underestimate exports of fish from Russia, because they do not account fully for the activities of the new, small, private enterprises. Small firms are estimated to catch roughly 600 to 650 MT annually. In January 1995, a preliminary estimate of total 1994 exports of frozen fish was published; the estimate was over 1.3 MMT. However, the data finally reported by the Federal Committee on Statistics were closer to the data that were actually reported, or about 900,000 MT of frozen fish.

For this report we have assumed that the total volume of fish and seafood exports in 1994 was 1.15 MMT, versus 152,000 MT reported by the Customs Committee, and 900,000 MT reported by the Federal Committee on Statistics. As regards seafood imports, the most accurate data are provided by the Customs Committee, because imported products are under strict customs control. Unauthorized imports into Russia of fish caught by foreign trawlers in the territorial waters of Russia are estimated to be small.

Table 17 shows Russian fish exports and imports according to the Russian Customs Committee.

Table 19 provides a comparison between data reported by GOSKOMSTAT and the Russian Customs Committee, by category.

Table 17. Major categories of fish products imported and exported in 1994, according to the Customs Committee
of the Russian Federation
Code	Product category/country	Volume	Value	Average Price	Value Percentage
		MT	$1000	USD/MT	%
A. Total Imports		274543	140154
0302	Live and chilled fish, except filleted fish and flesh	15301	14162	926	100.0
	Of which:
	Great Britain	3929	6403	1630	25.7
	Norway	2710	1845	681	17.7
	Estonia	1700	581	342	11.1
	Sweden	1060	950	896	6.9
	CIS Countries	955	323	338	6.2
	USA	160	195	1219	1.0
	Other	4787	3865	807	31.3
0303	Frozen fish, except filleted fish	210040	100371	478	100.0
	Of which:
	Great Britain	69589	28681	412	33.1
	Norway	40066	15998	399	19.1
	Netherlands	21326	10433	489	10.2
	Estonia	14334	7553	527	6.8
	Sweden	12170	5634	463	5.8
	CIS Countries	8243	3867	469	6.9
	USA	2262	1145	506	1.1
	Other	42050	27060	644	20.0
+PAGE
0304	Filletted fish and fish flesh	5532	12589	2276	100.0
	Of which:
	Germany	1345	2628	1954	24.3
	Norway	907	2072	2284	16.4
	Estonia	600	931	1552	10.8
	Denmark	539	2094	3885	9.7
	CIS countries	136	51	375	2.5
	USA	65	459	7062	1.2
	Other	1940	4354	2244	35.1
0305	Dried, salted and briny fish	41491	37006	892	100.0
	Of which:
	Norway	9293	8450	909	22.4
	Germany	9498	3959	609	15.7
	CIS countries	4976	2263	455	12.0
	Estonia	4742	3461	730	11.4
	Iceland	3516	3538	1006	8.5
	Latvia	2498	2306	923	6.0
	Finland	2426	2489	1026	5.8
	USA	448	2457	5484	1.1
	Other	7093	8083	1140	17.1
0306	Crustacea dressed, whole, live, fresh, cooled	2180	11207	5141
	Of which:
	Denmark	683	3582	5245	31.3
	Norway	341	967	2836	15.6
	Sweden	335	1356	4048	15.4
	Germany	239	1317	5510	11.0
	USA	58	749	12914	2.7
	CIS countries	41	84	2049	1.9
	Other	483	3152	6526	22.2
1605	Consumer-ready seafoods and canned crawfish,
	mollusks, etc	411	1825	4440	100.0
	Of which:
	Denmark	137	405	2956	33.3
	France	56	248	4429	13.6
	Thailand	53	187	3528	12.9
	Germany	40	246	6150	9.7
	CIS countries	5	24	4585	1.3
	USA	4	17	4722	0.9
	Other	116	698	6009	28.2
B. Total exports		152071	271215
0302	Fresh and chilled fish, except filletted fish and fish flesh	2914	1919	659
0303	Frozen fish, except filletted fish	135259	163632	1210
0303.10	Pacific salmon, frozen	36845	73333	1990
0304	Filletted fish and fish flesh	3546	4563	1287
0305	Dried, slated and briny fish	2922	9529	3261
0306	Crustacea dressed, whole, fresh, chilled	7460	91572	12325
1605	Consumer-ready seafoods and canned crawfish, mollusks, etc.	2172	50307	23162

Table 18. Fish and seafood imports and exports in 1993-1994, according to the Federal Committee on Statistics of the Russia
Federation
Code	Category	1993 Volume	Value	1994 Vol	Val	Percent Vol	Change Val
		MT	$1000	MT	$1000	%	%
A. Total Imports		47551	16475	68852	39595	45	140
0302	Fresh and chilled fish, except filleted fish and flesh	19536	4073	21968	8006	12	97
0303	Frozen fish except filletted fish	23820	6352	42247	20948	77	230
0304	Fresh, cooled, frozen filletted fish and flesh	191	456	1028	1554	439	214
0305	Dried, salted and briny fish	N/A	N/A	4282	4068	-	-
0306	Dressed, whole, live, fesh, chilled Crustacea	362	944	429	1719	19	82
0307	Mollusks and other invertebrates, except Crustacea	4	55	6	80	55	45
1604	Consumer-ready seafoods and canned fish, caviar	3585	4223	3154	7193	-12	70
1605	Consumer-ready and canned crustacea, mollusks	53	372	20	95	-62	-74
1605.10	Consumer-ready and canned crabs	0.3	4	1.1	14	282	250
B. Total Exports		591758	872186	913147	1175828	54	35
0302	Live and chilled fish, except filletted fish and flesh	56720	69878	161501	93775	185	34
	Of Which:
	Japan			46041	20149
	Norway			39348	47036
	South Korea			36375	13598
	Spain			39005	5601
	Other			11733	7391
0302.50	Fresh/chilled cod	45174	54720	44414	49901	-2	-9
0303	Frozen fish, except filletted fish	44854	483591	617512	629598	39	30
	Of which:
	China			132576	39096
	Namibia			77426	22465
	Japan			73864	262264
	South Korea			61233	88886
	Other			272413	216887
0303.10	Frozen Pacific salmon	18971	30505	23044	63542	21	108
0303.60	Frozen cod, escept: filletted cod and cod flesh	109671	112319	122147	146543	11	30
0303.79	Frozen Korean cod and coalfish	107060	31525	180475	49318	69	56
0304	Fresh, chilled, frozen filletted fish and flesh	43917	64255	58558	72737	33	13
	Of Which:
	Germany			16911	17217
	Japan			14869	25923
	USA			12322	12395
	Other			14456	17202
0305	Dried, salted or briny fish			32121	22347
	Of Which:
	China			14273	6358
	Japan			11369	8286
	Other			6479	7703
0306	Dressed, whole, live, fresh or chilled Crustacea	24849	146578	28698	270662	15	83
	Of Which:
	Japan		20561	203921
	USA		4414	47291
	Other		3723	19450
0307	Mollusks and other invertibrates, except Crustacea	13335	18915	9365	27995	-30	48
	Of which:
	Netherlands			4532	7698
	Japan			1703	7260
	Argentina			1023	762
	Other			2107	12275
1604	Consumer-ready and canned fish and caviar	4308	23252	4017	21156	-7	-9
	Of Which:
	Great Britain			1064	4591
	South Korea			1036	3271
	France			724	1579
	Netherlands			397	2248
	Other			796	9467
1604.30	Sturgeon and other fish caviar	77.3	11184	48.9	9137	-37	-18
1605	Consumer-ready and canned Crustacea, mollusks	3776	46717	1375	37558	-64	-42
	Of which:
	Japan			885	2442
	South Korea			427	11628
	Other			63	1488
1605.10	Consumer-ready and canned crabs	3776	64717	1363	37412	-64	-42

Table 19. Comparison of data on fish imports and exports in Russia in 1994 provided by different sources, in MT
Code	Category	Data Sources
		Customs Committee	Committee on Statistics	Percent*
EXPORT	(0302-0306)	152071	898390	17
0302	Fresh and cooled fish	2914	161501	2
0303	Frozen fish	135259	617512	22
0304	Filletted fish	3546	58558	6
0305	Dried, salted fish	2922	32121	9
0306	Live Crustacea	7430	28698	26
1605	Consumer-ready fish products	2172	1375	158
IMPORTS	(0302 - 0306)	274543	69954	392
0302	Fresh and chilled fish	15301	21968	70
0303	Frozen fish	210040	42247	497
0304	Filletted fish	5532	1028	538
0305	Dried, salted fish	41490	4282	969
0306	Live crustacea	2180	429	508
1605	Consumer-ready fish products	411	20	2055

* Customs Committee figures are a percentage of those provided by the Federal Committee on Statistics.

In spite of the variation in foreign trade figures reported by different sources, two trends are obvious: First, fish export volumes have considerably increased over the past few years. And second, fish imports are steadily increasing, largely due to the increase in consumer-ready seafood imports, including high-priced gourmet seafood preparations.

Great Britain and Norway are the two major importers of fresh and fresh-frozen fish products from Russia, accounting for 40-55%. Norway and Germany are the major importers of processed seafoods, having a 40% share of the total import volume of such products.

As regards exports from foreign countries into Russia, the situation is different. PacRim countries - North Korea, South Korea and Japan - are the absolute leaders among exporters. Norway is the only European country that is exporting comparable amounts of seafood to Russia. However, the Russian Federation plans to expand its export sales into the European Economic Community market. At present, fish volumes imported into EC countries from Russia are about 150,000 MT annually. The lack of adequate processing facilities in Russia, plus the fact that product quality does not meet the requirements of the European Quality Standard, are the principal obstacles blocking Russian export sales expansion.

Business opportunities for U.S. fishing companies
The United States enjoys an economically beneficial geographic location between the two major fishing areas of the world -- the Atlantic and Pacific Oceans. Both regions contain commercial fishery zones of Russia.

Under current Russian law, the products of joint ventures may be imported duty-free into the Russian Federation. Goods produced by joint ventures therefore enjoy a significant price advantage. Again, the major obstacle to expansion of the Russian market for fish is low Russian incomes. A good, stable market exists in Russia for high- value and highly-processed seafood, but it is small.

FISHERY POLICY
Financial management policy
Historically, fishing industry activities and operations were strictly regulated by the central government. Even though this is less the case today than it was in the past, the old Soviet organization for fisheries continues to function. The Committee on Fisheries of the Russian Federation (Rosrybkhoz) remains the principal regulatory and enforcement agency for the industry.

In addition to its regulatory functions, Rosrybkhoz is responsible for the allocation of government funds within the industry. In other words, Rosrybkhoz manages all federal support programs for the fishing industry, and decides which companies receive the allocated funds.

Funds allocated by the government have considerably decreased over the past few years. As a result of the rigid financial policy pursued by the government, in 1994 Rosrybkhoz received only 46 billion rubles ($13.1 million) to allocate within the industry, when 156 billion rubles ($44.6 million) were actually budgeted under the governments centralized investment program for 1994, and an additional 71 billion rubles ($12.6 million) of public credits were scheduled. The 46 billion rubles ($13.1 million) which were actually received were only made available at the end of the year. As a result, the Rosrybkhoz investment program for 1994 was only 44% funded.

Rosrybkhoz's budget appropriation in 1995 was only 34.4 billion rubles ($9.8 million). Given this low level of funding, the government's catch targets will be hard to achieve. Instead of reaching the targeted annual catch level of 4.2 MMT by the year 2000, the industry is more likely to catch annually less than 3 MMT between now and the year 2000.

Top officials of the Russian government have criticized Rosrybkhoz s bureaucratic methods of management as unsuitable for market-oriented reforms. Prime Minister Viktor Chernomyrdin pointed out in a report that the Rosrybkhoz authorities had been unable to develop competitive bid mechanisms for fishing quota allocations. Poor management only compounds the problem created by the lack of funding in the industry.

Production and pricing policy
In view of seasonal fluctuations in production, the Russian fishing industry needs considerable financial credits, particularly for fuel. In 1993, fuel oil and diesel fuel requirements of the industry totaled 1.7 MMT and 3.1 MMT, respectively.

At present, the government does not provide enough financial support to the domestic industry to ensure that it wins government procurement contracts. It is source of contention between the industry and the central government, that Russian firms holding state procurement contracts receive few concessions. A 30% compensation for fuel costs is offered, but even this support is tenuous. In 1993 the industry received as compensation for fuel costs of about 13 billion rubles, compared with 47 billion rubles in the original appropriation -- about 28% of the allocation.

In the past, subsidies and grants were viewed as indispensable government measures. Now, the government refuses to provide financial support not only because it is short of funds, but also out of fear of encouraging the perverse incentives of dependency.

The industry's position is that considerable government support will be required to modernize the industry and make Russian-produced fish products fully competitive with products from other leading fish-producing countries. Declining catches over the past few years, they say, prove that the industry cannot operate profitably without substantial government support. Most arguments appear to be made for support during this transitional period only, with the implication that support would not be needed after this unusual time of economic and political stress.

The following example shows clearly the serious problem of lack of funds in the industry: Even in the event that all depreciation deductions, plus 50% of total revenues, were allocated to upgrade or replace plant and equipment, the sum of these would replace only one-tenth of outdated production facilities. Table 20 shows the decline in government support to the industry.

Table 20. Cost structure of total earnings resulting from product sales, services and other types of work rendered in the fishery complex in Russia in 1993, in percents

Analysis of the figures in the table above shows a sharp decline in government-budgeted funds, as well a rise in levels of taxation. The percentage of gross income going to taxes increased from 8.7% to 22.4%, while budget disbursements have reached the level of 40.9% as compared to the original level of 28.6%.

The central government is not deaf to the industry's calls for support. Recently, it adopted a resolution (number 443), which allows ishermen to barter a portion of their catch for equipment and services. This will help to simplify the system of mutual settlements and reduce the level of mutual debts between producers and their suppliers.

Local authorities are also taking steps to relieve certain financial burdens on the industry. The Primorskaya Regional Duma has granted fishing companies permission to pay a portion of their taxes in the form of fish products. This measure will shorten the distribution chain and, as a result, lower prices.

Capital investments for the fishery industry in Russia The most important step the industry can take to promote its own development is to obtain sufficient investment. Capital investments in the fishing industry have declined by more than 60% in the period 1992-1994. During this period, fishery enterprises have endured peak inflation, with 200-250% increases in prices for productive raw materials and equipment (including fuel, cargo, fishing and processing fleet machinery, and coastal facilities). As is the case in so many other agricultural enterprises, fishing firms are unable to pay off their considerable debts. The debt burden adds to the gap between revenues and expenditures, as shown in Table 21.

Table 21. Financial resources required and actually invested in the Russian fish industry for the period 1986 through 1994, in million dollars

A number of forecasts indicate that in the last six months of 1995, prices for the majority of fish products in the domestic Russian market will reach world levels. High prices are an incentive to Russian firms to upgrade their facilities and to produce competitive products. Again, the big constraint here is the lack of funds available for investment -- either from companies' own operations, or from foreign investment.

Management in fishing and processing facilities appears to want to remain dependent on traditional financial sources -- th government -- rather than to give up control to foreign (or domestic) private investors. Trying to obtain sudsidies from the government consumes much management time and energy. One often-heard argument for subsidies is that, because facilities are so old, production costs are much higher for Russian firms than for foreign firms, and therefore the government should compensate firms for this cost disadvantage in order to level the playing field.

Tariff policy
The table below presents fish export and import duties as of July 1, 1995.

Table 22. Customs duties on fish exports and imports (in $/1000 kg or as percentage of the customs value)

Note on the exchange rage: At the beginning of July 1995, just after the new tariff rates went into effect and when this report was prepared, the ruble/ECU rate was about 6,100. The $/ECU rate was about $1.35. Thus a tariff of 100 ECUs equaled $135.

According to the Federal Customs Committee resolutions dated November 11, 1993 and September 1, 1994 ( No.452)

Item	Code	Duty Rate
Category 3
Fish and crustacea, mollusks, other invertebrates	03	10%
Including:
Fresh/Colled
- Pacific salmon	030212000	600 ECU
- Plaice	030222000	750 ECU
- Herring	030240000	600 ECU
- Cod	030250	300 ECU
Frozen:
- Pacific salmon	030310000	20%
-Atlantic and Danube salmon	030322000	20%
CRustacea	0306	24%
Mollusks	0307	25%
Category 16
Consumer-ready/canned fish and seafoods	1604	10%
Including:
- Sturgeon caviar	160430	14000 ECU
- Crabs	160510000	800 ECU
- Shrimp	160520000	600 ECU
- Other Crustacea	160540000	600 ECU

B. Import duty
Item	Code	Rate *
B.1 According to the Federal Customs Committee resolution dated March 11, 1994, and effective July 1, 1994
Category 3
Fish and Crustacea, mollusks and other invertebrates	03	5%
Except:
- Fish meal and granulated powder	030510000	duty-free
- Pacific Salmon	030541000	16100 ECU
- Smoked trout (including filletted trout)	030549400	20%
- smoked eel (including filletted eel)	030549500	20%
Category 16
Consumer-ready/canned fish and seafoods	16	15%
Except:
- Canned/consumer-ready salmon	160411000	10.5 ECU
- Other canned/consumer-ready fish	160419	25%
- Cooked salmon products	160420100	25%
- Sturgeon caviar	160430	100 ECU
- Canned/consumer-ready crabs	160510000	12 ECU
- Canned/consumer-ready shrimps	160520000	7.4 ECU
- Canned/consumer-ready lobsters	160530000	14 ECU
- Canned/consumer-ready Crustacea	160540000	6.9 ECU
- Canned/consumer-ready invertebrates	160590	20%

B.1 According to the Federal Customs Committee Resolution dated May 17, 1995, effective July 1, 1995
Category 3
Fish and Crustacea, mollusks, other invertebrates	03	10%
Except:
- Fish meal and granulated powder	030510000	duty-free
- Pacific salmon	030541000	16.1 ECU/kilo
- Smoked trout (including filletted)	030549400	20%
- Smoked eel (including filletted)	030549500	20%
Category 16
Consumer-ready/canned fish	16	15%
Except:
- Consumer-ready/canned salmon	160411000	10.5 ECU/kg
- Consumer-ready/canned fish	160419	25%
- Cooked salmon products	160420100	25%
- Sturgeon caviar	160430	100 ECU/kilo
- Consumer-ready/canned crabs	160510000	12 ECU/kilo
- Consumer-ready/canned shrimps	160520000	7.4 ECU/kilo
- Consumer-ready/canned lobsters	160530000	14 ECU/kilo
- Consumer-ready/canned crustacea	160540000	6.9 ECU/kilo
- Consumer-ready/canned invertebrates	160590	20%

On May 6, 1995 the government issued a decree which increased import duties on food, including fish and seafoods. (The new rates are shown above.) The higher duties are expected to reduce import sales and to push up domestic Russian fish prices.

Food quality and safety
Before the transition to a market-oriented economy began, the issues connected with food quality and safety required minimum attention because sales and distribution were under central control. With a great number of private suppliers and distributers entering the market, the State Standardization System (GOST) confronted the problem of official standards violations. The porosity of the borders between countries of the former Soviet Union makes GOST's job difficult. Products not meeting Russian official standards have entered Russia and have been consumed in several instances with serious health consequences. In the past two years, Russian authorities have become noticeably more rigid in enforcing compliance with official standards.

Since fish and seafoods are perishable products and require careful preservation and processing, and in view of the unavailability of resources necessary to upgrade processing facilities, the risk of Russian firms' selling unsafe fish products is increasing. Unfortunately, we do not have information on incidences of food safety problems with Russian-processed fish.

PRICING
Tables 23 through 25 present fish and seafood prices: average prices thoughout the country, wholesale prices at one of the largest markets (in Moscow), and retail prices at the Moscow foodstores.

Table 23. Prices and price indices for selected products and seafoods in 1992 - 1995
Date	1	2	3	4	5
A. Average prices for selected fish products an seafoods in the Russian Federation, rubles per as of the end of the month, in 1993 - 1994
1992
December	0.29	0.59	0.22	0.35	450
1993
January	0.42	0.66	0.26	0.41	560
February	0.44	0.62	0.25	0.38	660
March	0.49	0.64	0.29	0.40	770
April	0.47	0.67	0.32	0.40	870
May	0.45	0.69	0.32	0.41	980
June	0.44	0.74	0.37	0.48	1080
July	0.48	1.09	0.48	0.55	1020
August	0.55	1.48	0.58	0.71	990
September	0.56	1.71	0.62	0.80	1070
October	0.59	1.77	0.65	0.83	1190
November	0.77	20.9	0.77	1.05	1190
December	0.86	2.26	0.79	1.15	1240
1994
January	1.01	2.32	0.79	0.60	1420
February	1.25	2.25	0.82	0.58	1580
March	1.30	2.20	0.80	0.58	1720
April	1.37	2.14	0.88	0.62	1790
May	1.32	2.03	0.93	0.62	1880
June	1.31	2.01	0.98	0.64	1960
July	1.31	1.98	1.01	0.67	2030
August	1.27	1.98	1.04	0.71	2120
September	1.15	1.83	0.98	0.70	2350
October	0.97	1.56	0.83	0.60	3040
November	1.05	1.78	0.97	0.70	3150
December	1.17	1.98	1.02	0.74	3390
1995
January	1.30	2.07	1.11	0.80	3860
February	1.35	1.95	1.08	0.79	4260
March	1.35	1.85	1.16	0.76	4750
April	1.33	1.80	1.16	0.78	5020
May	1.36	1.87	1.23	0.84	5060
June	1.47	2.04	1.40	0.96	4710

B. Average price (in rubles) indices for selected fish products and seafoods in the Russian Federation, as of the end of the month, 1993-1994, December 1992 = 1.00
1993
1993
January	1.8	1.4	1.5	1.4
February	2.2	1.5	1.7	1.6
March	2.9	1.9	2.2	2.0
April	3.1	2.2	2.8	2.2
May	3.4	2.6	3.2	2.5
June	3.7	3.0	4.0	3.3
July	3.8	4.2	4.9	3.5
August	4.2	5.5	5.8	4.5
September	4.6	6.9	6.7	5.4
October	5.4	7.9	7.8	6.2
November	7.1	9.3	9.3	7.9
December	8.2	10.5	9.9	9.0
1994
January	11.1	12.4	11.4	5.4
February	14.7	13.3	13.1	5.8
March	17.2	14.2	14.0	6.3
April	18.8	14.4	15.9	7.0
May	19.1	14.4	17.6	7.4
June	19.7	14.8	19.4	8.0
July	20.5	15.1	20.7	8.5
August	20.8	15.8	22.2	9.5
September	20.8	16.2	23.2	10.4
October	22.4	17.8	25.5	11.6
November	25.4	21.1	30.9	14.0
December	30.5	25.2	34.9	15.9
1995
January	38.5	30.1	43.4	19.6
February	44.2	31.3	46.7	21.3
March	49.2	33.1	55.6	22.8
April	51.5	34.0	58.9	24.9
May	53.0	35.6	62.9	26.8
June	53.2	36.1	66.6	28.5

1 - frozen fish*; 2 - Salted and spiced-salt. herrings; 3 - Canned fish in oil 350 g*; 4 - Canned fish in tomato sauce 350 g*; 5 - Dollar/ ruble exchange rate. * Non-delicacy fish products

Table 24. Wholesale prices for fish and seafoods in Moscow, June of 1995; maximum and minimum prices equivalent in US dollars at the exchange rate of 4900 rubles per $1.00
Item	Unit	Price max.	($ per unit) min.
		$	$
Cured fillet of sturgeon, vacuum-formed	200g	3.90	4.70
Red caviar	kilo*	26.50	29.80
Black caviar	kilo*	180.60	-
Crab sticks	200g	2.20	2.30
Fish sticks	250g	0.80	0.90
Filletted cod	kilo	4.10	-
Fresh-frozen fish
Flatfish	kilo	1.30	1.40
Korean cod	kilo	0.90	1.10
Banded sea perch	kilo	1.40	-
Sturgeon	kilo	4.70	-
Starred sturgeon	kilo	5.10	-
Herring	kilo	0.80	0.90
Parthole fish	kilo	0.90	1.10
Cod	kilo	1.40	-
Hake	kilo	1.80	-
Canned fish
Canned bream in tomato sauce	350g	0.60	-
Canned salmon in tomato sauce	260g	0.80	-
Salmon canned in own juice	250g	0.90	0.90
Baltic herring blanced in oil	250g	0.50	0.70
Sardines blanced in oil (120-125g)	kilo*	2.60	4.80
Sprats in oil	160g	0.50	0.60

Table 25. The Moscow foodstore retail prices for selected fish products, as of the end of July 1995, in US dollars (at the exchange rate of 4600 rubles per $1.00)
Product	Foodstores in the retail network "Ocean"	Moscow region foodstores
	$	$
Fresh (frozen) fish
Pike-perch	2.58	1.74
Korean cod	1.77	-
Navaga	1.63	1.63
Cod	2.15	2.07
Argentina	1.82	-
Crucian carp	1.63	-
Perch (headed/whole)	2.85	1.96
Aspius	1.90	-
Flatfish	2.04	-
Squid	-	2.39
Siberian salmon	-	6.96
Salted herring	1.90	-
Smoked herring	2.36	-
Smoked parthole fish	2.99	-
Sun-dried bream	2.45	-
Tinned salted herring (1.3 kg)	2.50	-
Precooked fish
Hot-smoked Baltic herring (0.5 kg)	1.49	-
Minced cod (0.5 kg)	1.18	-
Filletted Korean cod	4.08	-
(Dressed) lancet fish	3.26	-
Filletted parthole fish	2.72	-
Filletted herring	2.17	-
Sheat-fish (specially dressed)	2.72	-
Imported fish products
Filletted fish, fractionally packed	4.38	-
Filletted cod (0.4 kg)	2.07	-
Filletted cod in sauce (0.5 kg)	2.72	-
Sliced cold-smoked Siberian salmon (150 g)	3.67	-

Filletted salmon (200 g)	4.49	-
Smoked filletted European salmon (200 g)	6.08	-
Spiny lobsters	17.91	-
Cooked/frozen shrimps	8.48	-
Canned fish
Raw-canned fish in tomato sauce (250 g)	0.83	-
Canned pike in tomato sauce (250 g)	0.71	-
Canned flatfish in oil (240 g)	0.70	-
TINNED COD LIVER (230/160 g)	1.83	1.74
Canned parthole fish in oil (400 g)	1.26	-
Canned herring natural (250 g)	0.87	0.89
Canned Baltic herring in tomato sauce (160 g)	0.61	-
Canned salmon in toato sauce (240/350 g	0.95	1.30
Canned navaga in oil (250 g)	1.53	-
Tinned Korean cod liver (240 g)	0.59	-
Tinned sardines (230/160 g)	0.85	-

Fish prices have risen by 30 to 70 times over the past two and one-half years (December 1992 through 1995). In U.S. dollars, prices have increased by two to four and one-half times. Domestic market prices for fish products have now reached the level of world market prices, and in several cases have exceeded them.

A product mix sampling in large city markets (with Moscow serving as the control) shows a great variety of domestic and imported fish products. The price per unit varies widely. For example, the price for cured fillet of sturgeon varies within 20%, while for blanched sardines the variation is 100%.

Retail prices depend in part on the type of retail store selling the product. For example, in the middle of June 1995, the cost of fresh-frozen pike/perch was $2.60 per kilo at "Ocean" speciality foodstores, while ordinary shops were selling the same product for $1.70.

Domestic market opportunities for the imported fish products
Generally, domestic market opportunities for fish imports are great. This is especially true in large cities, due to the fact that the average income of city dwellers is usually higher than that of the rural population. Demand for a greater variety of fish products is increasing. However, the growth in demand is restricted by comparatively high prices. At present, the average monthly income in Russia is approximately $100. Based on a market basket cost of $150 (in Moscow), it is impossible to buy imported fish products on a regular basis. The most stable demand for fish is observed in income brackets over $400 per month.

Over the past few months, some increase in domestic consumption has been noted. This increase in demand is most likely the result of the U.S. dollar's new strength, as well as of the gradual improvement in wages. (We note that the data on incomes are notoriously poor. However, the numbers are starting to show a stablization of real wages. Some people here argue that incomes began rising at some point during the last year, but the improvement has not shown up in the data.) As a result, demand for some types of imported fish products is growing.

One note that applies to imported food products overall: We have observed that in Russia, active and timely advertising plays a very important role in helping consumer tastes to change. Many consumers, especially those outside the cities, are simply not aware of what products are available for them to buy. In Russia, advertising serves an educational function to a much greater extent than it does in the Western economies.

In their efforts to sell into the Russian market, foreign firms do well to devote significant resources to advertising. We understand that many companies consider television advertising to be the most efficient way to sell their products here. Radi advertising is considered by some companies to reach too few people for the cost, and there seems to be some feeling that Russians do not pay very close attention to radio advertising. Print advertising reaches even fewer people than radio, given th sharp decline in newspaper readership over the last two years. Television is the medium of choice for those companies whos (future) sales volumes can justify the expenditure (it is expensive even by Western standards, we understand). Of course, there opportunities are available to companies that want to advertise their products -- trade shows, in-store promotions, etc.

Market infrastructure and distribution chains
The former Soviet Union had a centralized, vertically- integrated fishing industry -- from sea to shelf. The specialized retail sales and distribution network "Ocean" was part of this system. Privatizatation has broken the link between retail food stores belonging to the "Ocean" network, and the whole fish trading system.

The role of the government as a major fish distributor and sales agent has been declining over the years. Significantly reduced catch volumes, growing export sales, and a lack of government funds have all caused a decline in state procurements. The small size of the catch in 1994 was 3.5 MMT, versus 4.5 MMT in 1993, and precluded state procurements. The pre-planned and actual volumes of state procurements in 1994 are presented in Table 26.

Table 27 presents the total market volumes of fish and seafoods, including state deliveries. It should be pointed out that although the role of the government in the distribution of fish products has been gradually decreasing, it is still considerable. With the caveat that in Russia today there may be very fine lines between government and private commercial activities, an estimated 50% of fish products are currently distributed through government or quasi-government trade networks.

The major marketing problem for fish products is the considerable increase in delivery costs. Far East fish producers in Primorye, Sakhalin, Kamchatka, Magadan, Khabarovsk account for about 60% of the federal purchases. As of March 1995 the cost of delivery by railway refrigerated container with a capacity of 160 MT (5 refrigerator cars with a capacity of 32 M each) exceeded 500,000,000 rubles (just under $100,000 in March 1995). This means that the cost to deliver 1 MT/kilomete equaled 530 rubles ($0.12). So delivery costs alone added about 60% to the initial price. As a result, the cost per one kilo of Korean cod delivered to Moscow was 2300 rubles in May of 1995 (about $0.46), which was comparable to the wholesale price for this product in the Far East - 2400 rubles/kilo (about $0.48). The retail rice for Korean cod in Moscow was twice as high.

In May of 1995, the cost to deliver fish products by refrigerated container from Murmansk to Moscow was 35,000,000 rubles ($7,000), or about 1,000,000 rubles ($200) per MT of delivered product.

With this in mind, the Russian government adopted in February of 1995 a resolution which established reduced transportation rates for cargo on long-distance runs over 3,000 kilometers.

Vladimir Korelsky, Chairman
The Russian Federal Fishery Committee
12 Rozhdestvensky Bulvar
Moscow 103031, Russia
Tel: +7-095-924-1139
Fax: +7-095-928-7319

All-Russia Association of Fish Catchers and Exporters
15 Rozhdestvensky Bulvar
Moscow 103045, Russia
Tel/Fax: +7-095-928-8449

Association of Fishing Joint Ventures
Koldashevskaya Nab. 6/1, Stroyeniye 3
Moscow 109017, Russia
Tel: +7-095-208-4510/230-7174
Fax: +7-095-238-8643

Kirill Ivanov, Deputy Derector
Lenexpo Exhibition Complex
103 Bolshoi Prospect V.O.
St. Petersburg 199106, Russia
Tel: +7-812-355-1911
Fax: +7-812-355-1985

I.S. Denisov, General Director
Expocenter
14 Krasnopresnenskaya Nab.
Moscow 123100, Russia
Tel: +7-095-255-3799
Fax: +7-095-205-7210

At present, the fishery industry of the Russian Federation is in the process of transition from a centrally regulated system to a market-oriented one. In the last two years, many small fishing and processing firms have been started in the Russian fishing industry. This new small business sector is made up of private companies that are not regulated by the Russian Federation Committee on Fishery (Rosrybkhoz), which in Soviet times exercised strict control over the industry.

The presence of these new small independent businesses, together with the weakening of Rosrybkhoz's regulatory role, have radically changed the structure and functioning of the industry.

The upheaval of the transition period makes precise analytical evaluation particularly difficult. In order to conduct an in-depth and more precise study of the situation in the industry, the use of larger amounts of significant data, highly skilled and experienced personnel and considerable financial resources will be required.

Global Economic Data Exchange System
Commodity: Total Edible Fishery Prods. (0300000) (METRIC TONS)
Beg. Month/Year of Marketing Year:	01/94		01/95		01/96
RUSSIAN FEDERA	Revised 1994		Prelim 1995		Forecast 1996
	Old	New	Old	New	Old	New
Landings/Comm'l Catch	3700000	3900000	3300000	4050000	0	4100000
Fresh/Frozen Production	2100000	1500000	2000000	1600000	0	1650000
Canned Production	180000	225000	160000	220000	0	220000
Cured Production	260000	545000	230000	580000	0	580000
Total Production	2540000	2270000	2390000	2400000	0	2450000
Fresh/Frozen Imports	50000	225000	60000	230000	0	245000
Canned Imports	8000	5000	10000	10000	0	15000
Cured Imports	0	45000	0	50000	0	50000
TOTAL Imports	58000	2758000	70000	290000	0	310000
Fresh/Frozen Exports	650000	1000000	730000	1100000	0	1200000
Canned Exports	13000	7000	15000	10000	0	13000
Cured Exports	45000	143000	50000	140000	0	137000
TOTAL Exports	708000	1150000	795000	1250000	0	1350000
Domestic Consumption	1890000	1395000	1665000	1440000	0	1410000

Global Economic Data Exchange System
Commodity: Fish/Urchin Roe/Caviar/Lvr (0300100) (METRIC TONS)
Beg. Month/Year of Marketing Year:	01/94		01/95		01/96
RUSSIAN FEDERA	Revised 1994		Prelim 1995		Forecast 1996
	Old	New	Old	New	Old	New
Beginning Stocks	0	0	0	0	0	0
Total Production	18000	30000	15000	32000	0	34000
Intra-EC Imports	0	0	0	0	0	0
Other Imports	0	0	0	0	0	0
TOTAL Imports	0	0	0	0	0	0
TOTAL SUPPLY	18000	30000	15000	32000	0	34000
Intra-EC Exports	0	0	0	0	0	0
Other Exports	100	75	110	90	0	100
TOTAL Exports	100	75	110	90	0	100
Domestic Consumption	17700	27825	14690	29670	0	31520
Other Use/Loss	200	2100	200	2240	0	2380
TOTAL Utilization	17900	29925	14890	31910	0	33900
Ending Stocks	0	0	0	0	0	0
TOTAL DISTRIBUTION	18000	30000	15000	32000	0	34000

Global Economic Data Exchange System
Commodity: Salmon, Whl/Evisceratd (0340100) (METRIC TONS)
Beg. Month/Year of Marketing Year:	01/94		01/95		01/96
RUSSIAN FEDERA	Revised 1994		Prelim 1995		Forecast 1996
	Old	New	Old	New	Old	New
Beginning Stocks	0	0	0	0	0	0
Total Production	410000	155000	350000	135000	0	145000
Intra-EC Imports	0	0	0	0	0	0
Other Imports	0	0	0	0	0	0
TOTAL Imports	0	0	0	0	0	0
TOTAL SUPPLY	410000	155000	350000	135000	0	145000
Intra-EC Exports	0	0	0	0	0	0
Other Exports	30000	25000	33000	30000	0	35000
TOTAL Exports	30000	25000	33000	30000	0	35000
Domestic Consumption	345000	115000	290000	90000	0	93000
Other Use/Loss	35000	15000	27000	15000	0	17000
TOTAL Utilization	380000	130000	317000	105000	0	110000
Ending Stocks	0	0	0	0	0	0
TOTAL DISTRIBUTION	410000	155000	350000	135000	0	145000

Global Economic Data Exchange System
Commodity: Groundfish, Whl/Evisceratd (0340410) (METRIC TONS)
Beg. Month/Year of Marketing Year:	01/94		01/95		01/96
RUSSIAN FEDERA	Revised 1994		Prelim 1995		Forecast 1996
	Old	New	Old	New	Old	New
Beginning Stocks	0	0	0	0	0	0
Total Production	2300000	3050000	2100000	3100000	0	3100000
Intra-EC Imports	0	0	0	0	0	0
Other Imports	35000	120000	40000	130000	0	150000
TOTAL Imports	35000	120000	40000	130000	0	150000
TOTAL SUPPLY	2335000	3170000	2140000	3230000	0	3250000
Intra-EC Exports	0	0	0	0	0	0
Other Exports	420000	500000	450000	520000	0	550000
TOTAL Exports	420000	500000	450000	520000	0	550000
Domestic Consumption	1750000	2460000	1550000	2470000	0	2430000
Other Use/Loss	165000	210000	140000	240000	0	270000
TOTAL Utilization	1915000	2670000	1690000	2710000	0	2700000
Ending Stocks	0	0	0	0	0	0
TOTAL DISTRIBUTION	2335000	3170000	2140000	3230000	0	3250000