Far Eastern fishermen are invited to the Exchange

Far Eastern Fish Exchange (FEFE) began preparations for the first in its history salmon fishing season, which started in the Far East in early June, and which will show the viability of the project. Still the fishermen are not in a hurry to change the usual scheme of work - many of them sell the catch abroad. Some experts believe that the auction site is more suitable for the trade, and only it will be able to return the Russian seafood trade back home from abroad.

In early June Far Eastern fishing vessels started one of their most important fishing seasons – the salmon one. It will be the first and, according to experts, largely decisive one for FEFE, which started working in May 2014.

"Until now, our exchange traded only remnants of the old catches. The outbreak of salmon season will be crucial in many aspects,"- said the president of  the "Far Eastern Fish Exchange", CJSC, Sergey Lelyukhin to the "Kommersant".

According to him, the exchange is profitable to everybody except poachers and smugglers. It will remove unnecessary intermediaries, which will increase the income of fishermen while reducing the price of marine resources for buyers. The Exchange will provide the State with the absolute transparency of trading, and thereby strengthen the confidence of business for the investment projects in the fishing industry in the region.

"The system of electronic exchange trading will allow you to make the job of fishing companies in the region more predictable and increase the amount of fish that has a final buyer on arrival at the Russian coast, and shipped directly to his address without any additional costs, such as warehousing. The electronic exchange platform will  exclude a number of intermediaries, which are essentially just reissue documents for the fish during its transportation from the port quay wall to the shopping center counter", - said Mr. Lelyukhin.

Electronic exchange platform for trading seafood is created in Vladivostok by "St. Petersburg Stock Exchange", CJSC, and "Far Eastern Fish Exchange", CJSC, with the support of Russian Federal Fisheries Agency. The Exchange can operate in several modes: first - addressed transactions when the contract is two-way; second - unaddressed transaction when the contract is concluded with the clearing company; third - futures, where the contract is concluded for the future catch; fourth mode - auctions, that is, if the owner wants to put the fish on the auction, the Exchange will allow him to do it, assured the FEFE. Registrarion as a member of the  exchange costs 22 thousand roubles a year. The exchange fee is set at 0.5% of the transaction amount.

It is the exchange fee that must ensure the functioning of the exchange, so the volume of trading which depends largely on the number of participants is important. There are about 20 participants in the process of registration at the moment. For stable and efficient operation of the exchange about 50 owners and even more buyers are needed, said Mr. Lelyukhin. He is confident in the success of the project. However, not all experts share his optimism.

"Many fishing companies have actually sold their future catch, as they got money from the foreign companies for the upcoming fishing season. So they have nothing to sell at the auction. It is easier and more conventional for those who have the resources to sell their catch the old tried and tested way. The main thing is that the export work with foreign partners is often much more profitable due to the use of shadow schemes. They do not need exchange at all"- said on condition of anonymity, the representative of one of the largest fishing companies.

"If the project of the Far Eastern Fish Exchange is successful, I'll be happy. But the fish is not a stock product. Experience suggests that the fish can be traded only in the format of the auction. The buyer must see the goods with his own eyes, because every batch is unique in its properties and characteristics. It is expected to create an auction site in the Primorye fish cluster. If we create the conditions for the project, we will be able to transfer at least the Russian seafood trading from the South Korean Busan to Primorye. But I underline that only market mechanisms should be used there not administrative, "- says Director of the Department of Fisheries of the Primorsky Region Alexander Perednya.

The project is actively supported only by the authorities of Kamchatka, with the governor of which the creators of the exchange met in March 2014 and reached complete understanding. The first exchange transaction at the Far Eastern Fish Exchange was concluded by the Kamchatka company "Koryakmoreprodukt.", LLC. Trading experts expect main tradings in July and August, when fishermen begin to supply the salmon.

Oleg Zhunusov, Vladivostok

Source: Kommersant