“We are introducing over–the-counter registration of crustaceans in order to understand the entire traceability of the chain along the entire line,” Igor Artemyev, Candidate of Biological Sciences, president of the St. Petersburg International Commodity Exchange, said recently. “I can’t understand why, when almost all transport from the Far East to Moscow is subsidized, we see fish more expensive than meat on the shelves in Moscow,” said Artemyev, who previously claimed that frozen fish could be sold on the stock exchange. “For example, frozen pollock, other types can be counted from it – the market knows the conversion factor. And it will be possible to get a market price, and this whole sales system will be transparent,” Artemyev is sure.
The story of the stock exchange and the idea of selling frozen pollock on it reflects the nature of the time and the trends shaping the current socio-economic realities. And if so, it probably makes sense to recall the basics of some mechanisms of the market economy. You can’t think of a better, more revealing example than the fish exchange.
The stock exchange is a place for speculation, not for solving social problems.
Recall that exchange-traded goods differ from others in the presence of the necessary features that characterize them as items of exchange trading. The subject of exchange trading, firstly, must be homogeneous (interchangeable and divisible), that is, each batch of goods can be replaced by any other batch of goods from any manufacturer of such goods. Secondly, the item must be long-lasting and easily transported. Thirdly, it is suitable for creating an exchange classification standard – an approved unified characteristic of a commodity contract (“paper”) in terms of grade, quality, weight, batch size, packaging, labeling, delivery conditions, etc.
At the same time, commodity exchange trading is a type of financial transactions. A commodity exchange is a speculative market for the turnover of exchange–traded contracts (“securities”) that insures players against commercial risks, as well as determines the dynamics of future commodity prices in the real market. The purchase and sale of goods at the time of the transaction on the stock exchange is not carried out – the goods are not available, “paper” is traded. According to Article 9 of Federal Law No. 325-FZ dated 11/21/2011 “On Organized Trading”, the exchange provides services for conducting organized trading, where contracts that are derivative financial instruments are concluded.
The objects of trading for which purchase and sale transactions are concluded on the stock exchange are futures – standard fixed–term exchange-traded purchase and sale contracts (“securities”) for raw materials. The “price” and “delivery time” of an exchange–traded asset are traded – they and only they are the object of the transaction.
Standardized goods (raw materials) can be sold and bought using only names and/or numbers. For example, the classic of the genre “sugar No. 11” is a standardized futures contract for trading raw sugar. Under this type of contract, raw cane sugar is delivered in bulk on FOB (free on board) terms, the price includes all costs of shipping sugar cane to a ship (in a wagon) in the port of the producing country) of any of the 27 countries that grow sugar cane, as well as the United States. The volume of trade under the Sugar No. 11 contract is 50 “long” tons (112 thousand pounds). Deliveries are carried out in January, March, May, July and October.
There are hundreds of similar parameters of various standardized exchange-traded assets, and professional stock market players in a particular commodity group know them by heart. After the conclusion of an exchange transaction, the contract (“paper”) can continue to “spin” on the stock exchange until the deadline for its execution.
The purpose of a futures transaction on a commodity exchange is to obtain a positive difference between the price of a “paper” at the time of its purchase and the price of this futures on the day of its expiration. In this regard, it should be clearly understood that the commodity exchange is not a bureau of good offices or a department of social protection of the population, it is a place of financial speculation. The exchange is also not an institution for ensuring state justice, and there is no question of any non-discriminatory access to real goods.
Currently, contracts (“securities”) for about 100 standardized exchange-traded goods (various types of raw materials) are “spinning” on world commodity exchanges. Their main positions can be grouped into the following groups: energy raw materials, non-ferrous and precious metals, cereals, oilseeds and products of their processing, live animals and meat, food products, textile raw materials, industrial raw materials.
Could there be a frozen pollock futures
It should be recalled that the fishing sites of mass fish species are located hundreds and sometimes thousands of nautical miles from the Russian coast. Domestic vessels extract perch, halibut and cod off the coast of Canada. Herring, mackerel, and whiting are found in the waters of the Northeast Atlantic. Sardines, anchovies, mackerel, horse mackerel – in the area of Morocco (West Africa). Pollock, herring, sardines and other fish species are found in the Far Eastern seas. And this is only a part of the fishing areas in the oceans where our fishermen work. The crew makes a variety of food products from the catches on the ship. At the same time, there can be no talk of any “stock standardization of goods” here – in principle. There are dozens of types of cutting and processing of catches, as well as the aquatic biological resources themselves, from which fish products are made.
On October 18, 2016, the Council of the Eurasian Economic Commission approved the technical regulation “On the Safety of fish and fish products”, in which it defined the concept of “fish products”. Food fish products – fish (including live fish and raw fish (fresh), aquatic invertebrates (including live and fresh aquatic invertebrates), aquatic mammals (including fresh aquatic mammals) and other aquatic animals, as well as algae (including raw algae (fresh) and other aquatic plants (including fresh aquatic plants), including products from them, in unprocessed or processed (processed) form, which are intended for human consumption.
The regulation applies to 13 types of frozen fish products. And these are only the “types of fish food products” in themselves, without taking into account the type of cutting, processing, size and weight of the goods in the package. At the same time, there is an interstate standard “Frozen fish” GOST 32 336-2013 GOST 32 366-2013, in which “frozen fish” (the temperature inside the product is no higher than minus 18 ° C) is divided into two categories: undivided (whole) and butchered. The document specifies the types of butchering of frozen fish, namely: decapitated fish; semi–gutted fish; gutted fish; decapitated gutted fish; fish carcass; semi-gutted fish carcass; fish back; fish piece; fish gutted fish; tesha – the abdominal part of the fish; fish steak.
In 2025, the draft “List of products from aquatic biological resources, including for the purpose of making changes to the All–Russian Classifier of products by type of Economic Activity (OKPD 2) OK 034-2014 (CPA 2008)” prepared by the Federal Agency for Fisheries contains 959 types of products, of which 204 are a variety of frozen fish and all what can be made and frozen from it. Another 11 types of frozen crustacean products, 7 – from shellfish, 6 – aquatic invertebrates, other frozen algae and sea grasses.
And all this is referred to by the single term “frozen fish products.” Taking into account the variety of industrial packaging and packaging of this type of product, manufactured in factories of fishing vessels or in coastal fish factories, there can be a huge number of types of products. For example, pollock fillet ice cream can be supplied in at least five types. Moreover, we recall that according to GOST 32366-2013, “frozen fish” is further divided into the first and second grades in terms of quality.
In addition, it is necessary to note one very important point. The domestic fish market consists of food products from more than 250 types of aquatic biological resources. Even produced from different catches of the same biological species, it may differ in its characteristics: heterogeneity of the size range, different fat content, saturation of caviar, etc. The consumer properties of these foodstuffs will be different, and they depend on natural factors, so the fish cannot be unified for stock trading.
Another important factor that prevents the standardization of fish products. Seafood is a perishable pleasure. The shelf life of frozen fish at a temperature not exceeding minus 18 ° C is on average from 6 to 12 months from the moment of its extraction (catch). The selling price for sale largely depends on the date of production of the product, that is, on the speed of its movement from the fishing areas to the counter.
In connection with the above, we can state the existing reality. First of all, there is no such thing as “frozen fish” or just “fillet of fish ice cream” in the fishing industry. Secondly, people on planet Earth do not produce frozen fish products that are standardized for the commodity exchange and do not trade “fish” futures.
About competition, traceability, and product price indicators
The first thing you hear from some stockbrokers is that trading on the stock exchange is supposedly competition. They say that access to fish is limited, it is impossible to track how many intermediaries there are in the distribution chain, everything needs to be “straightened out”, and there is a commodity exchange for this. It sounds tempting at first glance – for people who are far from the fishing industry. In fact, the initiative of the fish exchange has nothing to do with protecting competition, creating conditions for the effective functioning of the domestic fish market, and even more so with reducing prices for fish products. This is a “story about money”. Behind the loud social slogans, there is an attempt by exchange intermediaries to get their percentage from the “paper resale” of seafood. Stock exchange lobbyists are not stupid people, they regularly put pressure on government officials to include frozen fish products, and now crustaceans (there are more “fat” there) in the list of goods for which national price indicators are needed for fiscal authorities. According to stakeholders, these indicators should identify private trading platforms (exchanges). Therefore, the purchase and sale of government-defined goods must be executed on the stock exchange. For money, of course.
Let’s get to the bottom of this initiative. It should be noted that from the point of view of protecting public health, access to the domestic consumer market and the turnover of fish products are administered by veterinary authorities. The traceability of fish movement from the deck of the vessel to the store counter is provided by the Rosselkhoznadzor using the automated Mercury information system. By the way, it is Mercury that best sees the number of intermediaries in the food market.
At the same time, in the field of international trade, state customs authorities issue declarations for goods on a daily basis and have complete data for automatically calculating price indicators by type of goods – in the age of artificial intelligence, this can be done by a computer program, rather than a private exchange on a fee basis.
Weekly monitoring of domestic wholesale prices (the first sale from a fisherman) is conducted by the Federal State unitary Enterprise National Fish Resources, subordinate to the Federal Agency for Fisheries. Data on average wholesale prices for the most widespread frozen fish products can be seen on the website of FSUE “Natsrybresurs”. The Government of the Russian Federation may decide to grant the state status to the commodity price indicators of Natrybresurs, which will allow the Federal Tax Service of Russia to obtain relevant data for tax databases.
In fact, much has already been decided regarding the state administration and control of the turnover of fish products. Turning the stock exchange into another additional administrative barrier for fish market participants is an absolutely irresponsible idea, leading to an increase in the operating costs of producers. State coercion to trade frozen fish products with mandatory paid registration of securities on the commodity exchange will inevitably lead to an increase in retail prices for fish on the domestic market, a decrease in the competitiveness of domestic fisheries enterprises and an increase in imports of foreign fish products.
