January 3, 2014

Russia's ban on Norwegian whitefish and pelagic exports commences

On January 1, 2014, Russia's ban on Norwegian whitefish and pelagic exporters kicked off, shutting off 485 plants from Norway's largest seafood market.

The ban, which was announced on December 20, leaves only 29 Norwegian plants able to sell whitefish or pelagic products to Russia.

The ban is not expected to have a major impact on whitefish exporters, but could have negative consequences for pelagic players. Although the number of pelagic plants to Russia is much fewer than the whitefish ones, they are far more significant in volume and value sold.

Speaking to Norwegian media, Norway's new fisheries Minister Elisabeth Aspaker said the case is being treated with the highest priority by Norwegian authorities, with hopes of finding a solution before too long.

The ban specifically affects all pelagics and whitefish coming from Norwegian processing plants that have not been inspected since 2000, the reason being that Russia's veterinary agency Rosselkhoznadzor is dissatisfied with hygiene standards and procedures.

Those that will be shut out will now have to wait to be inspected by Rosselkhoznadzor before getting access again. Norway's food and safety authority (NFSA) regional director Bjorn Rothe Knudsen said in December that the agency is working on getting this done as soon as possible.

Russia was Norway's largest seafood market in volume and value in 2012, buying 324,000 tonnes, for NOK5.961 billion (US$980 million). Of this, NOK4.52 billion (US$733 million) was salmon and trout and NOK1.142 billion (US$185 million) came from mackerel and herring, while barely NOK300 million (US$49 million) or so were from cod and haddock.

Within pelagics, herring is a major product -- Russia imports around 80,000 tonnes of herring from Norway a year, accounting for around a quarter of its consumption.

The head of Russia's Fish Union Sergey Gudkov, has warned the ban could send prices soaring. The ban does not affect Norwegian salmon and trout exporters who are already approved to sell into Russia, though Rosselkhoznadzor said it will increase quality control of such products, as part of on-going criticism of the quality of Norway's salmon and trout exports.

Rosselkhoznadzor, however, is under investigation for abuse of power by the Russian Anti-monopoly Service (FAS). The FAS believes the veterinary agency colluded with Russian importers of Norwegian salmon in establishing a salmon cartel. Two importers, Severnaya and Russian Sea Group, have been fined for their role in the alleged cartel.