Russian Crab

Russian Crab

The new face of Russia’s crab industry

Government-run auctions for crab quotas in Russia have become a real game-changer for the country's crab industry. This has not only led to unprecedented fleet renewal, but also demands more efficient operation, said Russian Crab general director Dmitry Trubnikov.

Russian Crab, as it is today, was born in October of 2019, successfully bidding to acquire nearly 15% of crab quotas.

‘Our annual catch is around 13,000 tonnes now. This figure may vary depending on the national total allowable catch,’ he said.

Russian Crab has emerged as a leading player in the Russian crab sector after securing quotas at auction. Image: Russian Crab / Русский Краб превратился в лидера российской краболовной отрасли после того как приобрел квоты на аукционе

The company’s predecessor PrimCrab had rights to catch only 2400 tonnes of crab annually. Russian Crab’s acquisitions in the auctions has made expansion of its fleet inevitable.

‘As PrimCrab, we were operating six fishing vessels. Now we have 19,’ Dmitry Trubnikov said. ‘We have a diverse fleet – we tried to take only modern vessels. These are Japanese tuna longliners, refitted to catch crabs,’ he explained, adding that the design work for the ten-month refit process was completed in Korea.

‘We all recognise that those thirteen ships we purchased and modernised are just a temporary solution until we take delivery of our new vessels, which we already under construction,’ he said.

Russian Crab general director Dmitry Trubnikov. Image: Russian Crab / Генеральный директор Русского Краба Дмитрий Трубников

The concept of selling crab quotas through auctions instead of allocating them based on track records is generally considered a controversial measure, but according to Dmitry Trubnikov, the entire industry has benefited from that reform.

‘The revenue from crab quota auctions totalled Rub142 billion (€1.81 billion), and this is significantly higher the overall taxes the [crab] industry paid over the past decade. Another point is that when a resource is not available for free, it gets treated with respect,’ he said.

‘Already now, we see how some longstanding market players are changing their attitude – and those changes are for the better. They aim at using the resource more effectively, now that it is no longer free. It costs – and it costs a lot,’ he added, commenting that there is now no question about making making full use of quotas, considering the cost of acquiring them.

The company’s existing fleet of refitted tuna longliners were never intended to be anything other than a temporary measure. Image: Russian Crab / Существующий флот переделанных тунцеловов всегда рассматривался лишь как временное решение

‘The bottom line is that the auctions work well both for the industry and for the country. They are restructuring the industry into a more professional and organised sector,’ he said.

‘The result is going to be a brand new crab industry, more prestigious and a more pleasant working environment’.

Post-Covid-19 reality

The Covid-19 pandemic, which brought turmoil to the Russian crab industry, has been a shadow over Russian Crab’s first year with new quotas.

‘We had a difficult situation in January and February this year when the Chinese market was closed with no prior notification. At that time, we had a lot of crab in stock, and those events resulted in substantial financial losses,’ Dmitry Trubnikov said.

Taking early preventative measures well ahead of Russia’s nationwide quarantine programme ensured that the company’s offices and vessels have remained Covid-free. Fortunately, the storm passed over quickly and the situation was already improving in March. The recovery has been so strong that Russian Crab’s deliveries to the Asia market over the first five months of 2020 have surpassed the same period last year.

‘There are still challenges with the US market. We sell crab in two mains forms – live crab goes to Asia while frozen production goes to the US and Japan. We all know what is happening in the US right now,’ he said, adding that exports are crucial as Russian companies sell up to 95% of crab abroad.

Russian Crab has successfully bounced back from the challenges it faced at the beginning of 2020. Image: Russian Crab / Русский Краб успешно справился с вызовами начала 2020 года

‘This is also about the culture of consumption. In Russia, crab is not the most popular thing to serve. It’s different in the US and or China,’ he said.

The low purchasing power of Russian consumers is also a barrier, since crabs commonly are not affordable for the majority of the Russians as a regular purchase.

‘It’s not so long since I started noticing crab on the shelves of some Russian major food retailers in Moscow. But this is still a rarity,’ he said.

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