In light of geopolitical tensions, the Russian government has introduced specific trade policies that involve prohibiting the import of value-added fish and canned seafood products (identified by HS codes 1604 and 1605, encompassing prepared and canned fish, caviar, and its substitutes, prepared or canned crustaceans and mollusks) from “unfriendly countries to Russia,” as stated by the Ministry of Economic Development of the Russian Federation. This import ban is set to be in effect until the end of 2023.
The ban targets some fish and seafood products from so-called "unfriendly countries" and territories. This list includes the European Union (EU), the United States (US), Norway, Canada, Japan, and others (See Full List of Countries below). By limiting the import of seafood products, the Russian government is not only trying to oppose Western sanctions caused by the Ukrainian crisis but also creating opportunities for domestic producers to expand their operations and increase their market share within the country.
List of countries defined by the Russian government as “unfriendly to Russia” and where import of some seafood products have been banned by the end of 2023.
5. United Kingdom (UK)
5. European Union (EU) Member States
12. New Zealand
14. Republic of Korea
15. San Marino
16. North Macedonia
18. United States of America (USA)
The Federal Agency for Fishery of Russia explained that the ban on importing fish from these countries would create niches in the fish market so that local Russian producers can fill them with their products, including premium segmentations. In addition, Russian authorities believe that this import ban should positively affect pricing in the industry. As the department points out, fish prices in Russia are quite high since imported fish depends on the exchange rate – which changes not in favor of the ruble – and domestic fish producers equate their prices with high imported ones. To address those market niches that domestic production cannot fill, the authors of the document retained the possibility of importing fish from "friendly" countries, the report says. According to industry experts, imports of fish and seafood products to Russia in Q1-23 amounted to more than 100 thousand metric tons (mt). The main growth drivers are Turkish chilled trout, Chilean frozen salmon fillets, and mussels; while herring imports, including fillets, have fallen sharply after the industry moved towards import substitution.
The "Russian food embargo" which started on Aug-14,targeted a wide range of food products, including seafood, meat, fruits, vegetables, and dairy products. The ban affected imports from the EU, the US, Canada, Australia, and Norway. According to Decree No. 778, dated August 7, 2014, titled "On measures to implement the Decree of the President of the Russian Federation No. 560 of August 6, 2014," the ban applies to various seafood items. This includes live, chilled, or frozen fish, crustaceans, mollusks, other aquatic invertebrates, and products made from them, such as fish fillets, minced meat, and flour.
The Russian government's food embargo included various seafood items from various countries. Some of the specific seafood products that were banned from import into Russia included:
1. Salmon (both fresh and frozen) from Norway. Norway was a major exporter of salmon to Russia before the ban
2. Trout from Denmark. Denmark was another significant supplier of trout to the Russian market
3. Mackerel from the EU
4. Sardines from the EU
6. Scallops from the US
6. King crab and snow crab from the US
7. Lobsters from Canada
According to industry experts’ estimates, the total import of fish and seafood to Russia increased by 54% in the first six months of 2023, compared to the same period in 2022, both in value and in total volume. The import volume increased by about 80 thousand mt and amounted to almost 240 thousand mt. In 2022, fish and seafood imports to Russia decreased by 33.3% in physical terms and by 19.4% in monetary terms, amounting to 0.4 million mt and RUS 125 billion, respectively. Analysts say a strong reduction in imports did not significantly affect the Russian market, primarily due to successful import substitution. In the structure of imports in physical terms, 48% of deliveries accounted for frozen fish, 22% for fish filets, 15% for crustaceans, 7% for fresh and chilled fish, and 3% for shellfish. Key suppliers include China, Chile, Vietnam, Turkey, and Ecuador.
In conclusion, the Russian government imposing a ban on the import of finished fish and seafood products from "unfriendly countries" represents a strategic move with significant implications for the domestic seafood industry. Set to be effective until the end of 2023, the ban aims to create market opportunities for Russian producers by freeing up certain niches in the fish market.
Industry experts have observed a surge in seafood imports during the first half of 2023, indicating a growing demand in Russia. While the ban may lead to positive effects on pricing and stimulate domestic production, there could also be challenges in meeting the demand and maintaining food security. Key suppliers such as China, Chile, Vietnam, Turkey, and Ecuador are expected to play a crucial role in filling the market gaps left by the ban. Moreover, the ban aligns with Russia's broader economic measures in response to Western sanctions, underscoring its determination to assert economic sovereignty. As the seafood import ban unfolds, it will be essential to closely monitor its impacts on market dynamics, trade relations, and food affordability for Russian consumers. Successful implementation will rely on balancing domestic production capabilities and necessary imports to ensure a stable and sustainable seafood market in Russia.