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Russian coldwater shrimp market collapses on high landings, low demand

Unprecedented domestic landings pushing prices further down compounding to the problem of falling demand.

Russia's coldwater shrimp market has been in a jeopardy since the country implemented its import ban on a number of western countries, but it is looking even bleaker now that the Russian fleet is landing product at home.

Before the ban, there were around 120 coldwater importers in Russia, today there’s three. In 2016, the three remaining coldwater shrimp importers -- Polar Seafood, Agama and Maguro, all collaborating with Greenlandic companies -- brought in just 7,200 metric tons of shrimp, a steep decrease from the 21,000 metric tons imported in 2014.

“It is a terrible situation for importers," Igor Salagaev, marketing director at Russia’s shrimp importer Agama, told IntraFish.  "After the ban prices spiked and consumers, who used to buy a lot of shrimp, shifted to chicken, and consumption just goes down every year now.” 

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In 2015, the Russian fleet started fishing for coldwater shrimp in the Barents Sea for the first time, adding a new player to a market already facing a price and demand collapse.

Murman was the only company fishing in the Russian Exclusive Economic Zone (EEZ), but this year, there are already two vessels on the water and another two expected to come in over the coming weeks.

“Every year from now will be different in Russia,” Salagaev said.

“For what I know there will be two more trawlers in the Barents Sea next year and it means more Russian-origin shrimp, and even lower prices.”

This year, Russian landings from the Barents Sea are expected to reach 3,000 metric tons.

“That’s something never seen before, in 2014 there were no landings whatsoever, nothing from the Russian fleet, it is horrible for imports, because the price of the domestic product is much lower,” Salagaev said.

In addition, vessels in the Russian Far East will also bring in another 2,500 metric tons of coldwater shrimp, all of it for the domestic market.

“The markets in Russia are very, very slow, I don’t see demand increasing at all even with the low prices,” Salagaev said.

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Imports are going to increase slightly in 2017 due to a fall in prices, which means the markets will be flooded with product.

The situation is not only damaging for importers, but for producers in Denmark -- who export the product through Greenland -- as well, since there are sizes traditionally bought by Russia and no other markets.

“Small shrimp sizes, 180+, are only wanted in Russia, producers will not have anywhere to market the product if not here,” Salagaev said.

“And the problem is that the Russian fishery is landing for this market, it is not exporting even though the product has a very competitive quality. 

"I guess it would be an option to export if fishermen in Murmansk see they can’t sell the product here," he said. 

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