Impact of Russian Sanctions on Seafood Supply Chain

Russia’s invasion of Ukraine is making waves around the globe. As one of the world’s largest seafood producers, the events of recent months are having a particular impact on the global seafood industry. Interested in finding out how activity in Eastern Europe will impact your next dinner? Let’s take a look at the impact of Russian sanctions on the seafood supply chain. 

Russian Sanctions: What and Why?

After taking control of the Crimean Peninsula, Russia banned American US seafood imports in 2014. In response to the country once again invading Ukraine, President Biden announced a March 11th ban on imports of Russian seafood. Seafood joins vodka, coal, and diamonds—amidst other products considered to weaken the country’s economic stability. 

Seafood is big business in Russia. Vladimir Putin and the Kremlin have worked hard to maintain power at sea—and the world has helped. From McDonald’s Filet-O-Fish sandwiches to a salmon dinner at your local fast casual restaurant, Russian seafood might be more common than you think.

As such, sanctions were considered to be a significant step in putting pressure on Russia to end its aggression towards Ukraine. While they haven’t yet ended the military assault, the country is now in a deep recession, with forecasted contractions of 10% this year and an additional 4% next year. 

As the sanctions have played out, however, Russia is hardly the only actor affected in the disruption to the seafood supply chain. 

Seafood Industry Disruptions

According to the Food and Agriculture Organization (FAO) of the United Nations, Russia is one of the largest producers of seafood globally. They’re the fifth-largest producer of wild-caught fish and a world leader in exports—particularly to the United Kingdom and European Union. 

Along with Norway and Iceland, Russia is one of the world’s biggest producers of crab and cod. Theirs is harvested by the Barents Sea and similar frigid oceans, and sold around the globe. Just ask the sushi restaurants in Japan, which are already scrambling for crab alternatives. 

The impact of tariffs and sanctions on Russian seafood is experienced at different levels around the globe. Cod, in particular, is ringing the alarm bells for many distributors, restaurants, and eaters worldwide. Why? Cod is a staple for fish and chips meals. Changes in the cod supply chain are already starting to have a significant impact on foodservice operators and distributors. 

Even prior to the war, British fish and chip shops were already feeling the pressure from rising food prices and increasing energy costs. These new crises are really taking a toll on one of the UK’s most culturally-relevant foods. There are estimates that more recent stressors may cause up to 50% of Britain’s 10,500 fish and chip shops to go out of business. 

While Americans aren’t known to frequent the ‘chippy’ as often, we also often use cod in our fish and chips meals. Similarly, pollock from the country often makes it into our frozen fish sticks and fast-food sandwiches. 

Across the country, we can expect to notice the impacts of the sanctions—even if we don’t eat cod or frozen fish sticks. As a global commodity, Russia’s shifts in seafood exports are likely to affect the price and availability of all types of fish. While consumers might notice a price hike on their favorite seafood, others will be impacted more directly. 

Faced with a decrease in cod imports, there are many concerns over possible job losses on the Eastern coast of the US. In Maine alone, more than $50 million in Russian seafood products are purchased annually. Processors and producers alike are now without the seafood upon which their jobs depend. 

This may encourage more imports from Canada and Norway. We might find that our favorite frozen seafood products are now made with domestically-caught and underutilized fish species—like hake or monkfish. It’s too early to tell what the future will hold for thousands of fish industry workers, or what long-term impacts the sanctions will have for eaters. 

A Loophole is Calling for Better Seafood Transparency

As another possible future for those in the fish industry, the US may unintentionally continue processing, selling, and eating Russian seafood. As a result of a “substantial transformation” loophole, trade rules allow products to claim a new country of origin if it's significantly altered in a country outside of where it was initially sourced. 

Consider pollock fish sticks, for example. They can be caught in Russia and barred from being exported to the US. More commonly however, they’re processed in China. Once the pollock is transformed, it’s now considered a “product of China”—and US sanctions no longer apply. 

In addition to pollock, Russian-caught salmon and crab often make their way to China before entering the US. In fact, there are concerns that Russia is only responsible for a very small amount of unprocessed seafood, meaning that we’re still importing a lot of Russian-caught, China-processed seafood. 

Up to one-third of China’s exports of wild-caught fish is likely from Russia initially. As for pollock and sockeye salmon, the percentage is even higher—up to 50% or even 75%. 

This has resulted in oversight hearings and calls for action from wildlife and environmental organizations. Similarly, consumers are driving the call for better transparency. If we really want to take billions of dollars of war money out of the hands of Vladimir Putin, then many are asking for the real origin of their seafood. 

Sustainable Seafood for a More Resilient Seafood Supply Chain

If you’re thinking that we could just bypass Russian seafood by making the switch to Alaskan cod, you’re right. Seeing “Alaska” on the box or packaging of cod or pollock is a sure fire way to know that it does in fact come from Alaskan waters. 

But Alaskan cod is hardly enough for every fish and chips meal in the US. These concerns over transparency and industry resilience highlight the future we might face if we don’t make our own fish stocks more sustainable. 

While Pacific cod is a sustainable seafood choice because stocks and fishing rates are at or above recommended levels, the same can’t be said for the other side of the country. Once fuelled by an abundant Atlantic cod fishery, our fish supply became dependent on foreign cod after overfishing and environmental changes. These stressors on the system meant that we went from roughly 100 million pounds of Atlantic cod a year in the 1980s to under 2 million in 2020. 

Improved sustainability of domestic fish stocks could help us better navigate crises like the Russian invasion of Ukraine. 

The Russian seafood ban was set to take effect on June 23. It’s likely that it will continue to be in place for many years to come. Sanction and ban-related stresses, coupled with those from overfishing, illegal fishing, a lack in traceability, and dwindling fish stocks serve as a hard-to-ignore reminder that our seafood industry is in need of change. 

The US is the world’s largest seafood importer—a lot of which comes from Russia. This shock to the system can encourage the change the industry needs. It calls to attention the fact that seafood is often caught in one country and processed in another. Known to contribute to a range of social and environmental problems, our global seafood chain can benefit from tools to facilitate traceability and tackle unsustainable fishing practices. 

And the Russia-Ukraine war might be just the catalyst to do so. 

Final Thoughts on Seafood and Russian Sanctions

It could take some time for the world to respond to Russian sanctions through increased transparency and sustainability improvements. Until then, if you’d like to ensure that your next poke bowl or baked cod meal isn’t contributing to Russia’s war machine, then direct trade (D2C) seafood is one of the best ways to consume your favorite fish. In addition to Alaskan cod, our Copper River salmon is sustainable, traceable, and helping to pave the way for a more ethical seafood supply chain.