Russia shrimp importers sitting on ‘huge stocks’

Russia shrimp importers are sitting on large vannamei stocks as the country’s new glazing law has led to sluggish sales, one importer said.

The Russian vannamei market fell by more than 25 percent in the first quarter of the year compared to last year, Igor Salagaev, marketing director at Russia’s largest shrimp supplier, told IntraFish.

“There are more than 2,000 metric tons of vannamei in Russian warehouses,” Salagaev said.

This means Russia is unlikely to import any more before the coming two to three months he said. “We have more than enough [until then].”

The main reason for the large stocks lies in Russia’s newly introduced regulation on glazing, Salagaev said.

The law came into force in April, capping shrimp glazing at 7 percent and fish glazing at 5 percent. The result is that the biggest retailers have now stopped buying shrimp glazed at 20, 30 or 30 percent, leaving only the smaller wholesale market open to shrimp glazed at that amount.

This means suppliers are sitting on large inventories of shrimp that are glazed at between 20 to 40 percent, Salagaev said. While smaller importers may try to sell to the wholesale market, larger ones are waiting to see how the situation develops, he said. Agama, meanwhile, has an edge thanks to its deglazing technology, which allows it to sell its stocks by reducing the glazing on shrimp.

The situation has particularly affected sales of bulk prawns.

“If last year the correlation between packed and bulk was about 32 percent to 68 percent, (in kilos), right now it is down to 50-50,” Salagaev said.

He said the ratio of bulk sales could decrease even more if Russia’s glazing laws don’t change. “I think if nothing changes with glazing level in Russia, bulk sales will be even lower than we can see at the moment.”

In contrast, packed shrimp sales are faring well. The main explanation is that bulk and packaged shrimp sell for similar prices, but retailers typically prefer the better quality packaged products.

“People don’t see any reason to pay more money for bulk if they can find good quality, branded packages of coldwater shrimp with the same glazing level — even if it is 10 to 20 percent higher in price.”

Retailers are also selling fewer shrimp overall, he said. At one retailer’s store, sales of vannamei have fallen from 1 metric tons to 300 to 350 kilos over the past three to four months, while sales of coldwater shrimp have fallen from around 4 metric tons to 800 kilos to 1 metric ton.

However, there is an upside to the figures. Not only are sales of packed goods going well, but also, in net weight — so when excluding the glazing — sales have actually increased from last year. In other words, the lower sales are disguising an increasing in net weight sold, due to the lower glazing.

“If we look at the net weight sales, by which I mean sales without glazing, we can even see an increase, particularly compared to last year’s figures. We are selling more,” Salagaev said.

This is especially true for Agama’s sales of its Bay of Plenty range of coldwater shrimp. Last year, sales in net weight at 20 percent glazing never exceeded 200 metric tons per month, whereas in April this year they were at 280 metric tons per month.
Source: Intarfish pubished by Vietfish Internation
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