FAO at the VI Fishery Forum in St. Petersburg: Chinese FISH ROAD

The FAO Liaison Office in Moscow participated for the sixth time in the Global Fishery Forum & Seafood Expo Russia, which this year took place on 27-29 September at the Expoforum in Saint Petersburg.

On the first day of the forum, Oleg Kobiakov, Director of the FAO Liaison Office with the Russian Federation, spoke at the Roundtable “Entering and Working on the Chinese Market under a Russian Brand”.

“Many of our fishing companies have already registered their trademarks on the Chinese market,” moderator Nikolay Vavilov, sinologist and publicist, opened the discussion. “However, there are barriers and limitations. There are opportunities to overcome these barriers, although this market is large and complex.”

“Today, aquaculture products already exceed the volume of catch in the seas and oceans. In 2021-2022, the global fishing industry overcame this “Lagrange point”, and now fish and other aquatic organisms, as well as algae, are grown in much greater quantities than caught, and this trend will continue in the future,” Oleg Kobiakov said.

Presenting a study by FAO specialists on the state and prospects of the fishing industry and, in particular, of the Chinese market, the head of the FAO Moscow Office highlighted a diagram with growth curves of consumption of fish products per capita, starting from 1950 to 2018. “If you compare 1960 and 2018, the consumption of fish and fish products in the world has doubled over these 58 years. By 2030, it is predicted that their consumption will increase further and reach 22.3 kg per every inhabitant of the planet. This is exactly the norm recommended by the World Health Organization (WHO).”

“Some countries set themselves more ambitious goals. For example, Saudi Arabia, where in 2010 per capita consumption was 8.5 kg, has now brought it to 14 kg in 12 years, and by 2030 it plans to reach 30 kg. The conclusion is obvious: everything is possible with the availability of investments, the use of modern technologies and a combination of favourable political and economic decisions.

If we look back to the Chinese market, then due to the growing role of China in the global turnover of fish products and the growing capacity of its domestic market, FAO has been issuing a quarterly review of prices for fish products on the Chinese market for the second year in a row.

The products of the Russian fishing industry are in high demand in the Chinese market. When FAO started publishing this newsletter (there are similar studies on European and global markets), it responded to the requests of specific market players.

At the beginning of the publication, information is provided on the policy and regulatory actions that the Chinese authorities have taken to regulate the market. Two years ago, China banned all exports of frozen fish products, fearing that either frozen fish or packaging could be carriers of the coronavirus.

However, speaking here at the Forum two years ago,” Oleg Kobiakov said in conclusion, “we said that neither FAO nor WHO has reliable scientific data regarding the fact that coronavirus infection can be transmitted via frozen food. This information was received with gratitude by the audience.”

“Historically, today, it is convenient for us to use the Republic of Korea as a major hub for repairs and supplies. At the same time, during the 90s and the noughties, those were Chinese companies that helped greatly the industry,” noted Andrey Mikhalevich, Head of the Economy and Investment Department of the Federal Agency for Fisheries. “They bought our products and thereby financed fishermen when they did not have access to credit funds, as they do today.

Then the catch decreased compared to the times of the Soviet Union to less than four million tonnes of aquatic biological resources. And imported products, if we take 2013 as a cut-off point, amounted to more than one million 70 thousand tonnes. By 2018, it was possible to reach the figure of five million tonnes of extraction of aquatic biological resources. Imports began to decline slowly. Last year, it was about 500 thousand tonnes.

No less, if not more important, is that even five years ago, 85% of export products were raw materials. And today, more than 30% are ultra-processed products, either completely finished products, or fillets in one form or another, or surimi (minced fish without bones and fat), which was not produced before.”

Today, according to Andrey Mikhalevich, it makes sense to discuss not the strategy in the already established markets, but the possibilities of promoting fish products made from “raw materials caught in ecologically clean waters, on fishing vessels or raised at factories built in Kamchatka, Sakhalin, Primorsky Krai.” The expert believes that it is necessary to look at new niches in the Chinese market with its multi-million and, moreover, solvent population and start supplying both semi-processed and finished products.

The Russian Export Centre has sent an employee to China, “whose task is to establish contact with a local distributor at your request, find out what kind of company it is, whether it is possible to interact with it,” said Alexander Morev, project manager for export support of the agro–industrial complex of the Russian Export Centre (REC). “As a result, you get a reputation certificate. Our employee can also arrange a meeting and help with its conduct. All this is a free service provided to you by the REC.”

In addition, the expert stressed, the REC is able to help in the search for financing for the creation of export-oriented production aimed at high value-added products. At the same time, the issue of insurance is being resolved, moreover, this service can be provided by both a Russian and a foreign bank with which the REC has a corresponding agreement. We can talk about the opening of production both in Russia and in China.

“In many countries there are programmes to promote national brands, including fish products,” said Alexander Morev. “Such programmes, for example, exist in Norway and Canada. We invite manufacturers to participate in the formation of technical specifications for our ‘Made in Russia’ brand promotion programme."

Presentations of several large Chinese companies were given at the Roundtable. Yang Hao, General Manager, Liao Yu Group Co., Ltd., told about the activities of his company, registered in the city of Dalian (our reference: this city called “Dalny” was founded by the Russians in 1898 on the site of the Chinese fishing village of Qingniwa on the territory leased from China. The Russian Empire spent 30 million gold roubles on the construction of the city, which took seven years).

Today, this company is a monopolist in this geographical location in the organization of cargo transportation, storage of imported fish products, as well as in the field of ship repair. During the COVID pandemic, the warehouse of its subsidiary was the main (and only) place for quarantine of imported seafood.

In turn, Li Naibing, CEO of Tieyue Yiheng (Dalian) Development Co., Ltd., presented her company, which is engaged in the production, processing, and storage of fish products, as well as the import and export of seafood. The company specializes in Kamchatka crab, trepang and marine fish species. The company has established branches and logistics warehouses in Russia, Japan, the Democratic People's Republic of Korea and a number of other countries. The annual trade turnover with Russia is three billion yuan (about USD 420 million).

The final presentation was memorable, in which Alexander Sapozhnikov, CEO of the Russian Crab Group of Companies, spoke about the heterogeneity of the geography of crab consumption in China – meat products are preferred in the north, and crab eaters are concentrated mainly in coastal regions. On the one hand, this circumstance opens up good prospects for exporters, since China has 110 ports for receiving seafood, but, on the other hand, only a few of them have proper port infrastructure and sufficient depth for receiving crab vessels, as well as capacities for storing live products.

Alexander Sapozhnikov pointed out the untapped potential for promoting Russian seafood. In recent years, for example, with the support of the Fisheries Council of Canada, a national association that deals with the positioning and promotion of fish products, the increase in imports of Canadian crab to China has reached 51%.

Alexander Sapozhnikov presented in detail the strategy of the Russian Crab company to promote its brand in the Chinese market. The “Trade marketing” section includes: establishment of a representative office in China; presentation of new products with tasting; training of partner employees; exclusive distribution. The “Branding” section comprises the following elements: registered trademark (TM); packaging; merch, printing, souvenirs; signature recipes. “Events” section: international and national fishing exhibitions; fairs, crab festival; thematic road shows. The “Pi-Ar” (PR) section: the website in Chinese; the brand account in WeChat; publications about the company in the media.

“Since surveys show that 91% of end consumers in China believe that they have never tasted seafood from Russia, but statistics say the opposite, and Russia has turned into the largest supplier of aquatic biological resources to China today, we have significant reserves to expand our presence in this market in China,” concluded the Russian businessman.

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The publication “GLOBEFISH: Chinese Fish Price Report, Issue 2/2023” in Russian, translated by the FAO Moscow Office specifically for the Forum, was disseminated at the section.

Additional information

China is Russia’s largest trading partner in the import of aquatic biological resources (ABR). Many Russian manufacturers have already started and completed the processes of registering their own trademark in China in order to enter the market with their product.