Eurofish - Latvia

Country Description

The Latvian fishing and fish processing enterprises are established mainly along the coastal areas of the Baltic Sea and the Gulf of Riga. These regions have developed a specific infrastructure around ports, netting workshops, cold stores, educational and social establishments and other infrastructure elements. The inhabitants of these communities are therefore highly dependent on fishing, fish processing and the fisheries development operations in these areas.

Since 1994 the fish catch in the Baltic Sea and the Gulf of Riga has increased by more than 10% per year and in 1997 it amounted 85,500 tonnes, the largest catch since 1980.

Over recent years, however, the high seas catch has dropped dramatically. Ageing and reduction of the high seas fishing fleet plus the difficulties of accession to fish resources and fishing grounds can explain this. The present situation has made Latvia revise and reconsider any development and future for the high seas fishery.

The inland water fish catch constitutes on average only 1% of the total catch. Low market value and restricted demand suppress growth in this area. However, freshwater fish resources should be considered as being under-utilised and possess additional raw material potential for fish processing.

The land reform in the country and the transition to a market economy has led to serious changes in the aquaculture industry. The market for farmed fish, particularly for carp and trout, has dramatically decreased. It is currently felt that with the current conditions for free trade and rising competition there is little incentive in Latvia for the growing and exporting of aquaculture production. When compared with the neighbouring countries, Latvia has a shorter growing season for intensive fish rearing in ponds. Aquaculture also suffers from a lack of basic investments for the construction of cost-effective farms.

In recent years the market for carp production attained 500 tonnes with the production of trout reaching 5-10 tonnes per year. It is estimated that fresh trout production could be increased up to 50 - 80 tonnes to satisfy the local market demands.

It is recognised, however, that the aquaculture sector needs restructuring in order to facilitate the attraction of foreign technology and investment.

In Latvia there are eight state run fish hatcheries growing fry for fish resource restocking in inland waters and the Baltic Sea. Every year the fish hatcheries produce on average 870,000 salmon and 50,000 sea trout smolts as well as other inland water species.

The range of processed fish products is large, including a wide range of chilled, frozen, salted, smoked and canned fish, delicatessen fish products and preserves as well as small amounts of fish meal. Canned fish products constitute the majority of all fish production. Herring and sprat as well as cod and flounder from the Baltic Sea and the Gulf of Riga provide the bulk of the raw material supply for Latvian canned fish production. It should be noted that “Sprats in Oil” the famous “Riga Sprats” are one of the best known of Latvia's export products, the production technology of which traces back into 1884.

In order to increase the range of their production according to the market demand, fish processors also use imported ocean fish such as mackerel and herring and small volumes of local fresh water fish – bream, eel, pike, vimba, carp, lamprey and others.

Canned fish production in 1997 compared to 1993 has increased nearly 4 times, while at the same time total fish production increased by only 16%. Total fish production reached 125,600 tonnes in 1997 including 90,500 tonnes of canned fish.

Over recent years the foreign trade balance of fish production has been positive.

Latvia exports more than 90% of the total volume of fish products produced. The fish and fish product demand from the domestic market has also been fully satisfied.

Frozen and canned fish is the main export product. “Sprats in Oil”, “Sprat Paste”, “Smoked Herring in Oil”, different fish in tomato sauce and preserves dominate production and constitute 70% of the total fish product export.

Central and Eastern European countries (Russia, the Ukraine, Belorussia, Lithuania, Kazakstan, Czech Republic and Moldova) are the main importers of Latvian fish production.

Unfortunately, at present the successful rise of the fisheries sector is endangered by the current economic crisis in Russia.

Lack of management skills within the fish processing sector have lead to difficulties and loss of business due to the heavy historical dependence on a single market, Russia. The sector has also suffered due to a generally low level of knowledge and experience regarding marketing issues and pricing policy, as well as little successful experience of operating joint venture schemes with outside companies.

Despite the symptoms of imminent crisis appearing during the spring of 1998 it was considered by the industry as ‘unavoidable’ and therefore little attention was given to a gradual change in the marketing strategy for the Latvian.