Ahmed Adel, Cairo-based geopolitics and political economy researcher

Prices for fish and seafood have risen sharply in Western countries due to the disruption of supplies from Russia in the context of sanctions policy imposed by the United States and the European Union. While Russia is finding new markets for its products, Western countries are unable to replace Russian supplies, leading to the collapse of a major company.

In March 2022, following the launch of the special military operation in Ukraine, the US banned the import of fish and seafood from Russia. The sanctions included salmon, cod, crab, and pollock. Subsequently, the US also refused to import processed products from any country as long as the fish was of Russian origin.

Russia, along with Canada, was one of the leading suppliers of crab to the US. In the three quarters of 2021, imports grew by 28% to $766 million. Now, as Bloomberg writes, the Americans have a crab crisis. Cod is the next to disappear. Over the course of ten years, the catch of cod in the US was halved, so it began to be imported from Russia.

The consequences have not been long in coming. Whittier Seafood, an American company specialising in Alaskan fishing, filed for bankruptcy in August. Its subsidiary, Marine Fishing International (MFI), supplied crab caught in Russian waters. The supply restriction led to a drop in the value of the company’s stock and lower demand for its products due to the designation of Russia as a country of origin.

“The embargo suddenly rendered MFI unable to import its primary product,” said Whittier Seafood Owner Alexey Kozlov last month. “In response to the sanctions imposed on Russia by the U.S. and E.U., Russia retaliated against American businesses with Russian connections. In March 2023, Russia revoked all of Tefida’s fishing licenses. The resulting damage to MFI was twofold. First, Tefida was unable to supply king crab to MFI, and MFI, in turn, was unable to supply king crab to its buyers. Second, Tefida was unable to repay MFI for a series of loans related to Tefida’s fishing vessels.”

Rather than the Russian fishing industry collapsing due to Western economic pressures, the US and the wider West are experiencing the boomerang effect of sanctions, as has happened consistently since February 2022 in other industries and sectors. Instead, Russia has been able to find alternative markets for its products. In particular, supplies to China have increased by a third over the year, according to Ilya Shestakov, head of Russia’s Federal Fisheries Agency.

“China is an important trading partner. It accounts for around 50% of exports: 1.3 million tons worth $3 billion,” he said.

Europeans are also paying for the sanctions. Russia is one of the world’s largest cod producers and the EU’s main supplier. Reduced catches and trade restrictions have led to a shortage of fish, causing concern among industry players.

At the end of 2023, the European Council excluded Russian fish from the tariff rate quota system for 2024-2026. There were no tariffs then, but now they are 13.7%. The EU also banned Russian seafood and caviar two years ago, but the Baltic states and Sweden also insist on banning cod, sprat, herring, and other fish.

Meanwhile, the EU imported pollock worth more than €1 billion in 2023. Of this, 26.3%, or €266 million, was imported from Russia. Therefore, in the event of a ban, the Europeans will lose more than a quarter of their supplies. In addition, pollock is very popular. In Germany, it accounts for 19% of fish consumption. And local media are already preparing Germans for bad news.

“We are facing the threat of massive price increases. The German market is dependent on fish from Russia. We cannot do without saltwater and cod. Around 1,000 employees in the fish processing sector are at risk of being made redundant. Three years will be enough to put an end to our industry,” said Steffen Meyer, managing director of the Federal Association of the German Fishing Industry and Wholesale Trade.

Yet, this phenomenon is not unique to the seafood industry. Even larger and more traditional companies, such as Volkswagen, face collapse as the German and European industries struggle to survive massive energy costs and low sales due to the impoverishment of citizens of all European Union countries since the imposition of reckless sanctions on Russia.

Although American industry mostly did not experience the negative effects of anti-Russia sanctions like their European counterparts, the bankruptcy of Whittier Seafood shows that the US is not immune and is now also beginning to feel the boomerang economic repercussions of trying to collapse the Russian economy.