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The Fish That Laid Ruby Eggs: U.S. Caviar a Hit in Russia
by Mikhail Maximenko
In some parts of Asia, the color red is thought to represent good fortune, a view probably shared today by many Alaskan fishermen.
The reason: U.S. red caviar sales to Russia hit a record $2.3 million in 1999.
This quiet caviar revolution that took place over the last three years was created by a series of events. It is a story of smart entrepreneurs and companies. But it is also about making the best of bad luck.
Traditionally, black caviar, the roe or eggs of the sturgeon, has been the pride of Russia’s export products. This delicacy, however, has become scarce recently because of over-harvesting.
The Russian woes began the day in 1998 that the ruble was devalued, and Russian consumers woke up with four times less purchasing power than they had before. Since Russian seafood producers export as a matter of good business sense, they realized they could get a better price outside the domestic market.
The outflow of caviar created an unmet demand among those Russian caviar-lovers who could still afford the product. In this luxury niche market, consumers proved willing to substitute U.S. red caviar for black. Not only is it more readily available in Russia; it is–for caviar, anyway–quite a bargain.
A Red-Hot Success From a Cool Place
U.S. red caviar–which usually comes from Alaskan salmon–is familiar in Japan in the form of a product called sujiko, processed caviar still in the skein or egg sack.
Thanks to the Japanese market for sujiko, a value system is in place for salmon eggs: Sockeye tops the list; at the bottom is pink salmon.
But sujiko proved to be a minor–and somewhat fragile–market. When Asia’s economic downturn hit, fewer people were interested in luxury items such as caviar. This pushed prices down.
Sockeye eggs, the most expensive variety, were able to command a high enough price to recoup production costs; pink salmon eggs, though, became a money-losing proposition. Since the market price couldn’t cover costs, the low-grade, pink salmon eggs were discarded.
Enter a number of Russian expatriates, now living in the United States. Without knowing it, they’ve been participating in a great immigrant tradition–using business connections in the land of their birth to build markets, promote trade and start companies in the United States.
Perhaps it was nostalgia, but someone took a look at U.S. red caviar and starting thinking about the possibility of exporting to Russia. The idea spread like wildfire throughout the Alaskan salmon industry–and at headquarter offices in the State of Washington.
"These are smart people," said Robert Katsura, who works in caviar production at Wards Cove Packing in Seattle, speaking of the trade promoters. "Their idea made sense, caught on quickly and has really helped the fishing communities throughout southeast Alaska. Naturally, it has also been good for U.S. seafood companies. Eggs that were once wasted are now getting sold."
Wards Cove has had a buyer in Russia for about a year now–and has had several reorders. Other Alaskan seafood exporters know and use this trend, said Katsura.
There is some expectation for it to continue. Why, Katsura points out, would the industry work so hard to create a market only to abandon it when Japan’s economy improves? Then, there will be two outlets for pink salmon caviar. Moreover, creating the market was not that hard, he notes. Not only did Russian consumers already have an awareness of red caviar–some may eventually come to prefer its taste over the traditional favorite, sturgeon caviar.
Foul Way To Treat a Fish
There are more worrisome forces driving U.S. exports of red caviar to Russia: namely, over-fishing spurred on by pressure from a stressful free market, and water pollution.
In Russia, the sturgeon, which is the original–and purists would say the only–caviar fish, outlived the dinosaurs, but is having trouble surviving communism’s collapse.
With the change in government came a free-for-all against the fish–with devastating over-harvesting and egg-destroying water pollution.
In the wild, sturgeons need to mature for 20 years before laying eggs. But poaching, a $1-billion a year industry in Russia, diminishes the shot female fish have at motherhood, especially when spawning grounds were raided.
It didn’t take long for the species to show signs of strain. In the Caspian Sea and the Volga Delta, the 1999 quota for sturgeon fish was 640 metric tons, but trawlers succeeded in harvesting only 300. Poor egg harvests cut Russian caviar exports by 30 percent.
This occurred despite the protection of the UN’s 1998 Convention on International Trade and Endangered Species. This treaty protects globally traded animals, such as sturgeon, and plants from extinction. Clearly, the situation also required action by the Russian government.
Will Our Salmon Be Safe?
The sad story of the sturgeon is a cautionary tale for other fish, and other nations. In the United States, salmon are harvested under the careful eye of fish biologists to ensure population stability.
"Alaska is the only state in the Union which has written into its constitution protection of the environment, including fish, forest, wildlife, grasslands and all other replenishable resources," said Herman Savikko, a fisheries biologist with Alaska’s department of fish and game. "Our salmon catch for 1999 was the second largest ever recorded–ever. Egg recovery is now a $100 million industry, also in great shape."
Moreover, spawning grounds are carefully managed so that salmon can produce enough eggs to perpetuate the species–and make a delicious treat for humans–for many years to come.
Russia Rescues National Treasure
In an effort to save sturgeons, the Russian government changed some rules.
Most of Russia’s fishing area is found at the Pacific region of Russia’s Far East. So, at the end of 1998, a new law required fishing licenses for catches within a 200-mile Pacific Russian Economic Zone. The previous zone covered only 12 miles. The catches must also be recorded.
Previously, catches sold abroad went unreported, so the Russian government had little means to track populations.
In an effort to curb overharvesting, the Russian government also began selling commercial quota licenses to catch and sell fish.
Many caviar-loving countries hope these new measures are not too late for the oceanic sturgeon. Some authorities, however, believe that the only sturgeon anybody will enjoy in the future will be farm raised.
Will Red Roe Grow In Russia?
Most of Russia’s seafood is exported. And a majority of it, 85 percent, is exported in the form of low-value primary products–including the exported black caviar.
The impact of Russia’s economic downturn on imports was dramatic. Russian consumers now prefer inexpensive frozen fish. Also, subsidized pork from the European Union has cut into the market for seafood.
However, since U.S. red caviar is now a stronger presence in Russia, the market may continue as a tasty, inexpensive alternative to black gold.
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The author is an agricultural attache with FAS’ Office of Agricultural Affairs at the American Embassy in Moscow. Tel.: (011-7095)-956-4103 Fax: (011-7095)956-4262 Telemail: agmoscow@fas.usda.gov [Open Box One]
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