The Russian Far East The Russian Far East Salmon IndustrySalmon Industry

Initial Observations and Strategies for the Wild Salmon Center

World Wild Salmon ProductionWorld Wild Salmon ProductionU.S. Leading ProducerU.S. Leading Producer

0

100,000

200,000

300,000

400,000

500,000

600,000

Met

ric

To

ns

1994 1996 1998 2000 2002 2004

Japan Russian Federation United States of America

Russian Wild Salmon ProductionRussian Wild Salmon ProductionPink Salmon is Predominant SpeciesPink Salmon is Predominant Species

0

50,000

100,000

150,000

200,000

250,000

300,000

Sockeye

Pink

Masu

Coho

Chum

Chinook

Source: FAO FIGIS

Metric Tons

Global Salmon MarketsGlobal Salmon Markets

0 100 200 300 400 500 600 700

Other

Canned

US Fresh & Frozen

Japan Fresh & Frozen

EU Fresh & Frozen

Thousand Metric Tons

Relative Salmon ValuesRelative Salmon Values

$0.16

$0.32

$0.76

$1.04

$3.03

$0.00 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 $3.50

Pink

Chum

Sockeye

Coho

Chinook

Average Alaska ex-vessel value per lb

Initial Observations: ProductionInitial Observations: Production

• Russian salmon production seems relatively stable if data is correct but poaching is a problem and likely results in production being under-reported

• Fish traps seem highly efficient and quality of the salmon is good

• By-catch from traps is minimal and traps can be removed or disabled as necessary

• At sea salmon fishing less than 10% of total production and declining

• Run forecasts often highly inaccurate as government survey resources are limited

Russian Salmon TrapRussian Salmon Trap

Net “fence” anchored from the beach

EntranceTrap

Holding Pen

Sakhalin Salmon TrapSakhalin Salmon Trap

Emptying the TrapEmptying the Trap

Initial Observations: ProcessingInitial Observations: Processing

• Considerable investment in new plants and equipment

• Many plants also own salmon traps

• At plants visited processing is basic, i.e. whole gutted, roe and/or canning

• Plants generally modern and clean

• No plants visited that have U.S. HACCP certification

Salmon ProcessingSalmon Processing

Salmon Roe ProcessingSalmon Roe Processing

German Plate FreezersGerman Plate Freezers

Processing Salmon at SeaProcessing Salmon at Sea

At Sea Salmon ProcessingAt Sea Salmon Processing

Salmon line on processing ship

20 kg bag for frozen whole salmon

Initial Observations: MarketsInitial Observations: Markets• Smaller processors selling to middlemen (traders) in

Vladivostok and have minimal knowledge of end markets

• Current markets are primarily Japan (sockeye) and domestic (canned, roe and frozen whole)

• Japan imports almost 100% of Russian sockeye

• Some shipments to China for re-processing and sale of value-added products in U.S.

• Domestic seafood market is growing by 15-20% per year

• Russian consumers wanting more value-added but industry lacks sufficient capacity

Initial Observations: MarketsInitial Observations: Markets

• Moscow sees salmon resource as important to domestic food supply and tightening regulatory process to control quota and fight poaching

• Pink and chum salmon least valuable species in world markets and often used for value added products

• Strong interest in market expansion Europe and U.S.) and value-added

• Little awareness of ecolabels and MSC

Domestic Roe MarketDomestic Roe Market

$18.00

Fresh Whole Salmon in Fresh Whole Salmon in Local MarketLocal Market

Chum $3.60 per kg

King $7.20 per kg

Coho $5.40 per kg

Some Key Issues Affecting Some Key Issues Affecting Russian Salmon IndustryRussian Salmon Industry

• Limited government resources for monitoring salmon runs and forecasting

• Extent of poaching and under-reporting is not known and likely varies greatly from river to river

• Anti-poaching forces are limited and underpaid– Quota holders often subsidize

• Lack of end market information

• Length of quota period being debated in Moscow

Potential Market IncentivesPotential Market Incentives

• MSC certification of “model” rivers– Pre-assessment to address needs

• Collaboration with major buyers in key markets to feature sustainable RFE salmon– Preferential purchasing agreements– Support for regulatory reform

• Training programs with U.S. experts– Develop better monitoring and forecasting– Market information/education for processors

Potential Market CollaboratorsPotential Market Collaborators

• Metro (German retailer with markets in Russia) now sells Russian canned salmon

• Trident Seafoods – Major U.S. processor now buying Russian salmon for value-added plant in China

• Cerena Holding AG – Swiss group planning Kamchatka investment of up to $400 million for fishing fleet modernization, processing facilities and international marketing network. “Fresh salmon for Europe.”

• Japanese markets for MSC certified Russian sockeye (e.g. Aeon)