MOSCOW — In Russia, caviar is not just a snack for the elite. That would be black caviar, which can cost thousands of dollars per pound, and comes from sturgeon. Salmon roe, also called red caviar, is much cheaper and is a favorite of ordinary Russians, particularly on special occasions — making the production of red caviar a billion dollar industry in Russia.

Last summer the cost of red caviar jumped by 70%, largely because of a bad start to the salmon season in eastern Russia. That price has more or less returned to normal (about $50 per kilo) thanks in part to a large import of frozen red caviar from Alaska. That is good for consumers, but it might be an ominous sign for Russian fisherman and processors, who produce between 11,000 and 13,000 tons of red caviar annually.

Between 40% and 60% of the red caviar in Russia comes from fisheries in the far eastern part of the country, on the Pacific Ocean. When the fishing season there began poorly, prices jumped. Since then, though, “around 15,000 to 16,000 tons of red caviar have been released in the market, enough to satisfy internal demand,” explains Aleksander Savelev, press secretary for the Russian Federal Fisheries Agency. The major caviar processors say that the main reason for the drop in prices is an increase in the amount of frozen red caviar from the United States.

According to Federal Customs Service data, nearly 1,500 tons of frozen caviar had been imported to Russia as of August, worth more than $13 million. At customs, 89% of the caviar was declared at $7 to $9 per kilo, significantly less than the average price in Russia.

“In Moscow, this caviar from Alaska is being sold at wholesale prices of between $25 and $28,” Savelev explains. “The price given at customs is based on an assumption that this is last year’s caviar, because freshly harvested caviar is being sold at between $18 to $25 per kilo at auctions. Or the importers lowered the real value, and the government lost several million dollars in customs duties.”

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Much cheaper than black caviar — Photo: Puschinka

In Alaska, just like in Russia, the fishing season started poorly, but by the end of the season catches were back to normal. In Alaska alone, the catch amounted to 600,000 tons of Coho salmon, which will produce 24,000 tons of red caviar.

“Since most people in the U.S. aren’t interested in red caviar, most of that will be exported, including to Russia,” says Mikhail Glubokovskii, the director of the Russian Research Institute of Fisheries and Oceanography. That means that the price of caviar could drop much lower than current levels, which would make it difficult for both the fishermen and the processors to make a profit.

Not all caviar problems come from Alaska. Experts in the caviar market believe that caviar shortages and price fluctuations are just as much a result of conflicts between caviar processors on the eastern coast and those in central Russia near the Caspian Sea, which has been the historical center of caviar production. As catches increased on the Kamchatka Peninsula and in the Sakhalin region, more processors were established on the east coast — leaving the processors near the Caspian Sea with no place to get fresh salmon roe and changing the industry's power dynamics. “It used to be that around 30% of the Pacific fishermen were forced to sell their catch to processors in the European part of Russia, and the processors set the prices. Now the Pacific fishermen dictate the terms of the transaction,” says one expert.

Statistics support that observation. In 2010-2011 the Caspian Sea catch contributed about 4,000 tons to the raw caviar market. In 2012, that number dropped to 1,500 tons. “Processors in Central Russia have no choice but to buy caviar from abroad, especially at a low price,” one industry representative says. “Based on the amount of the imports, they appear to be compensating for the lack of raw materials.”