Russia targets BRICS nations for seafood export growth

Brazil, India and China - as well as other BRICS countries - could account for almost two-thirds of Russian seafood exports by 2030, according to the All-Russian Fisheries Association (VARPE).

Russia is looking to the so-called BRICS nations as growing markets for its seafood exports over the next several years, the president of the All-Russian Fisheries Association told IntraFish.

German Zverev said Russian seafood exports had the potential to generate around $8.85 billion (€8.16 billion) annually by 2030. The BRICS nations could potentially absorb around two-thirds of Russia's fish exports, he said, more than offsetting a decline in shipments to Western markets.

The BRICS organization takes its name from the initials of its four founding members - Brazil, Russia, India and China - plus South Africa, which joined the group in 2010. Iran, Egypt, Ethiopia and the United Arab Emirates are also now members of the bloc.

"We believe that the BRICS countries, which currently secure approximately 50 percent of Russia's seafood exports, are potential markets that will absorb almost two-thirds of Russian fish exports." Zverev told IntraFish.

Russia's seafood industry, like all sectors of the country's agro-industrial complex, is pursuing a target set by the government to increase exports by 50 percent over the period 2021-2030. For seafood, this would mean exports of at least $8.5 billion (€7.8 billion) by the end of the decade.

Zverev said the potential of Russian seafood was even greater. He was commenting on a recent study by his association, known by the acronym VARPE, on the prospects for developing fish and seafood exports to 2030.

According to the study by VARPE, Russia has potential to increase supplies of processed fish products to its key BRICS partners - Brazil, India and China - while at the same time decreasing its dependence on countries that imposed restrictions on Russian fish in response to the war in Ukraine.

A level playing field

In particular, VARPE estimated the potential of the Indian market for Russian pollock fillets at $50 million to $60 million (€46 million-€56 million) from a current base of no more than several hundred thousand dollars.

To realize this potential, however, Russian companies would require the same terms as European competitors, Zverev said.

"India has signed agreements with a number of European countries - for example, with Norway, with Iceland - and imports products from these countries duty-free, while Russian fish is subject to import duties," he said during a presentation of VARPE's study in Moscow last week.

Brazil is another prospective market for processed fish from Russia.

"We see that Brazil consumes cod products," Zverev said. "Therefore, at-sea frozen fish fillet, including those produced on fishing vessels built under the investment quota program, could also be supplied to Brazil."

Clipfish, which some Russian companies have begun to produce, may also be in demand in Brazil, he said.

Developing new markets

Russian seafood supplies to China, meanwhile, could reach $4.88 billion (€4.51 billion) by 2030, accounting for around 55 percent of total exports, according to VARPE's latest estimate.

Exports to South Korea and Japan were seen increasing to $1.48 billion (€1.36 billion) and $1.41 billion (€1.30 billion), respectively, while combined supplies to countries in Africa, Latin America and the Middle East have the potential to jump fivefold to $523.2 million (€484.2 million) by 2030.

"Considering the prospects of these markets, we have some proposals for their development, including the adoption of customs and tariff regulation measures that would increase their attractiveness," Zverev told IntraFish.

"In addition, we believe it is important to work with different seafood products, not only with deep-processed, but also with chilled and live ones," he said.

Russia is also poised to make a breakthrough in fishmeal exports to serve what Zverev called "the active development of aquaculture against the stagnation in global fish and seafood production."

Reducing dependence on 'unfriendly' countries

In contrast to the projected growth in BRICS nations, the European Union's share of Russian exports is forecast by VARPE to decline by 8.4 percent from $779.3 million (€731.3 million) in 2023 to $570.4 million (€527.9 million) in 2030.

"At present, around 45 percent of Russia's total seafood supplies abroad go to 'unfriendly countries," Zverev said in a statement. "In the current geopolitical conditions, this creates risks: for example, since 2024, the EU has introduced duties of 13.7 percent against Russian whitefish."

A major shift toward new markets will be challenging, Zverev said.

"Some markets will have to be developed from scratch, and this is not an easy task, given the tough competition," he said. "In addition, flexible export duties on certain types of products, including seafood, linked to the rouble-US dollar exchange rate also impact Russian overseas supplies."

Russia introduced flexible export duties on certain products, including seafood, from Oct. 1 last year. The duties, linked to the rouble-US dollar exchange rate, are expected to remain in force until the end of 2024.

According to VARPE, the duties on fish products have led to a shortfall in export revenue of around $200 million to $210 million (€185 million-€194million) from pollock fillets, surimi and fishmeal.

From Oct.1 this year, the duty on fish products was raised to 5.5 percent from 4.5 percent of the customs value. This will be followed by a further increase, to 7.0 percent, from Nov. 1, meaning that Russian seafood will be shipped at the highest possible export rate. VARPE data shows that around 90 percent of Russia's total export revenue from seafood last year was generated by just four markets: China, with almost $2.8 billion (€2.6 billion); South Korea, with $803.9 million (€744.1 million); Japan, with $758.6 million (€702.1 million); and the European Union, with $779.3 million (€721.3 million).

VARPE has forecast Russia's overall seafood exports this year at $5.8 billion (€5.3 billion).