A weekly review of the most important events happened in the fisheries industry of Russian Federation 15.12.2014-21.12.2014

Over the past week, the following significant events happened in the fisheries industry can be highlighted:

On the 16th of December, the last meeting of the Public Council under the Federal Fisheries Agency of the current year was held in Moscow. During the meeting of the Public Council, Deputy Director of the Exchange "Saint-Petersburg" Vitally Kononov made a speech. He presented an exchange platform for electronic trading of aquatic biological resources and their products. He spoke about a joint project of the Far East fishery exchange and exchange "Saint-Petersburg" and the feasibility of realization of catches through exchange trading or auctions.

Among the benefits of exchange trading for fishermen were named the market expansion, transparency of transactions, absence of intermediaries, reduced expenses on the maintenance of sales and marketing services of fishing enterprises, the products quality control, the guarantee of the trading contracts fulfillment and an opportunity to hold futures trading, which will allow fishermen to have their own finances for the preparation for the fishing season.

The members of the meeting noted that the project of the exchange trading of aquatic biological resources is interesting for the industry, however, it was pointed out that today there exists some obstacles for the organization of the auction trading – for example, the lack of essential infrastructure.

Also, some of the recommendations of the representatives of the Exchange to the Federal Agency for Fishery did not satisfy the members of the meeting.

As a result, it was suggested to find an option that would be acceptable to all - to combine the interests of fishermen and of the exchange trading.

On the 16th of December, public hearings about the project of fisheries cluster, developed by the Nomura Research Institute in collaboration with experts from TINRO and DNIIMF, were held in Vladivostok. Among the high-priority issues to be addressed, the contractor named the establishment of a corporation of the actual project members, which would charge a commission of 5.5 % of the volume of the products sold as well as identification of sources of funding and creation of favorable conditions for investors. The members of the hearing noted that the project did not specify where it was planned to attract investment from and did not fully determine the sources of profits of the corporation. Additionally, the role of the existing enterprises is still unclear. The project of fisheries cluster does not take into account the current capacity of Primorye ports, does not consider the current sales volume of fish. Nevertheless, as the result of the hearing, representatives of the public and the department as a whole approved the document. However, they proposed a number of amendments. The project will be improved within 10 days and then submitted to the administration of Primorsky region for the final adoption. 

On the website of the Ministry of Agriculture, there were added new fishing regulations for the North, West, Baikal and the Volga-Caspian basins. Fishing regulations for all fisheries basins have been decided to be reissued due to changes in the structure of the fisheries industry management, namely, the necessity to approve the most important documents of the industry by order of the Ministry of Agriculture, not the Federal Agency for Fishery, as it used to be.

The process of republication took over two years. Today, the renewed fishing regulations are into effect for Azov, Black Sea, and the Far Eastern and East-Siberian basins. Also, in the end of November, the regulations for West-Siberian basin passed the state registration.

In the first quarter of 2015, it is scheduled to consider the bill «On Amending the Federal Law «On fishing and preservation of aquatic biological resources»» at the meeting of a working group under the Ministry of Agriculture. The amendments covered the key industry issues: an extension of the period of assigning the shares of fixed quotas for aquatic biological resources to users up to 25 years; an increase of the threshold of compulsory realization of quotas for preserving the right to fish from 50% to 70% in two years; changes in the regulations of coastal fisheries, and others.

Deputy Minister of Agriculture – the Head of the Federal Agency for Fisheries Ilya Shestakov signed a decree "On approval of the Plan of artificial reproduction of aquatic biological resources in 2015".

The plan calls for realization of a number of activities on artificial reproduction, which are carried out by the federal government financed institutions, subordinate to Federal Agency for Fishery, and legal entities at their own expense.
The document discusses the types of living aquatic resources and the volumes of necessary outputs of commercial fishing basins. The document also sets the timings and the stages of the release of whitebaits, indicating the sources of planting material.

In comparison with the past week, the following changes in prices for fish products have taken place(www.fishnotice.com). Table 1 shows the prices for fish products in Vladivostok, since this city is the most convenient point for the calculation of the price in other regions of the country. All prices in other regions will be calculated according to the rule ‘the price in Vladivostok + the journey to the calculated region’.

Table 1. The changes in prices for fish products over the period from 15.12.2014 to 21.12.2014

         The project submitted by Nomura Research Institute leaves a lot of questions. The ultimate evaluation of the project will be possible, however, only after the release of the final draft that will take into account all amendments. But, even now it is clear that the core of the cluster will, in essence, be a centralized intermediary who will charge a rather high commission or their services. In addition, it is still not clear what advantages the corporation will provide to the industry. There has been a growth in prices for some types of fish products in Primorsky region, caused by the growth of the ruble exchange rate in the period under review.

The review is prepared by:

Yury Levchenko

Client Relations Department CJSC “Far Eastern Fish Exchange”

Tel./fax: +7 (423) 2279913

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