Russia’s annexation of Crimea and its continued involvement in Ukraine has led to Western governments imposing punitive sanctions. In response, Russia has banned food imports from the US, including seafood. KDLG’s Chase Cavanaugh has more on how that may affect Alaska salmon.
Earlier this year, Russia staged a military intervention in Ukraine, annexing the region of Crimea. The West strongly criticized this action, and has levied punitive sanctions as the conflict between the two nations has escalated. In response, Russia banned food imports from Norway, the US. Canada, the European Union, and Australia for a year.
Experts were divided about the ban’s effect on Alaska’s salmon. Bristol Bay Economic Development Corporation President Norman Van Vactor said Russia’s imported seafood was typically fresh, and the country’s seafood industry has a strong focus on reprocessing capability. According to him, the country most affected by the ban is Norway.
“What we’re already seeing in the last two to three days is an apparent significant shift from demand for Norwegian salmon to Chilean salmon. That same product coming into Russia from Chile will be coming in a frozen state and a significant amount of the processing for the consumer has already taken place and so there will be significant implications for the domestic reprocessing industry in Russia.”
Chile is one of the US’s main suppliers of farm raised salmon. With some of that product instead going to Russia, Van Vactor says their price may rise in the United States, as well as have an interesting effect on wild salmon purchases.
“What we would see, if farm fish starts to increase in price, you’ll see consumers starting to shift, maybe buy farm fish, say “hey, all of a sudden the price differential to wild fish isn’t that great anymore,” and given the lessening price differential, they’re going to opt for buying quality because the price difference isn’t that significant.”
Where Alaska is likely to take a hit is in the export of roe, or salmon eggs. Andy Wink is a seafood analyst with the McDowell Group, a research contractor with the Alaska Seafood Marketing Institute. He says most of the salmon exported to Russia is roe. With other countries knowing the US can’t sell to Russia, its sellers are put at a disadvantage.
“It just puts other roe buyers in a much better negotiating position. Russia accounted for 17% of all salmon roe exports in 2013 and the Ukraine accounted for 12%. Some of that product that goes into the Ukraine probably goes into Russia as well, but if we assume the Ukraine’s not going to be buying as much roe either, you’re talking almost 40% of the Alaska salmon roe exports are tied up in those two countries.”
Wink said it’s possible the ban may also have an effect on the prices offered to Alaska fishermen.
"If we a significant decrease, hopefully that doesn’t carry over into next year, but if processors aren’t getting as much for their roe, that can certainly have a carryover effect on ex-vessel prices for the following year.”
Overall, Wink said a significant amount of Alaska seafood would be affected by the ban.
"Overall, we’re going to have to wait and see how long this lasts. At this point, we have no indication of that. All we can really say is that Alaska’s seafood industry exported about $60 million of product to Russia last year, and that’s what we stand to lose. They are a major salmon roe buyer of ours and that market could be impacted. It’s going to have a big impact on the Norwegians."
Despite this, he says Norway may yet have a way to circumvent the ban.
“If there’s a winner in this, people have said it’s probably going to be Chile, because Chile can still export farm salmon to Russia and they grow a lot of it, so you would expect, in the absence of Norwegian exports, you'd see Chilean exports of salmon increase. The little catch there is that a lot of those companies are owned by Norwegian companies that have farms of their own in Chile. It’ll be interesting to see how that plays out and if Russia takes further steps to pick and choose who gets to sell into the country.”
Both Van Vactor and Wink said it was too soon to predict the long term effects of the ban. Any changes to it are likely to be tied to the ongoing geopolitical conflict between Russia and Ukraine.