Caviar is about to get even more expensive

The Uruguayan exporter Caviar Polanco raised its prices about 7% in January to cover the rising costs of feeding, transporting and energy for the fish. That adds up to an increase of about 10% in 2021.

Rising costs and a global supply shortfall would be to blame, according to a senior executive there. The shortage shows no signs of easing as demand outstrips production.

The increase in prices “we are not going to see it reflected in the margins,” said the company’s executive director, Facundo Márquez. “It’s practically our cost increase.” The executive did not rule out another price hike due to rising global inflation following Russia’s invasion of Ukraine.

International restrictions placed on trade in caviar taken from wild sturgeon mean that more of this product now comes from farmed fish. Heavy investments in sturgeon farms at the turn of the century made China the world’s largest exporter, with 2019 shipments of 140 metric tons, according to a report by the European Market Observatory for Fisheries and Aquaculture Products.

That year, Uruguay, Latin America’s only caviar-producing nation, ranked in the top 10 exporters with its two sturgeon farms and shipments of nearly 9.7 metric tons of the delicacy. The United States is the largest buyer of Uruguayan caviar, with a market share in terms of value of 40% in 2021, according to data compiled by the Dinara fisheries agency.

The glut of cheap Chinese caviar in the 2010s created a new generation of consumers. It allowed restaurants, cruise ships and airlines to bring back a luxury good that all but disappeared after the wild sturgeon was declared on the brink of extinction in the 1990s. Márquez doesn’t see a new alternative producer flooding the world anytime soon. market with low-cost caviar as China did at the time.

Caviar Polanco, formerly known as Estuario del Plata, plans to increase production in 2022 to 6.5 metric tons, from 3.5 tons last year, Márquez said in an interview at his office in Montevideo. The family business is already breeding osetra and Siberian sturgeon that will allow it to raise annual production to 13 tons by 2027.

“We are convinced that the demand for caviar in the world will remain firm and will continue to grow,” said Márquez. “We have practically committed most of the production that we are going to have for this year.”

Beginning with the 2020 holiday season, Caviar Polanco saw a spike in demand as emerging buyers such as Brazil, Mexico and Vietnam competed for caviar with traditional markets such as the United States and the EU, Márquez said.

Russian connection

Russia was virtually the only buyer of sturgeon meat from Uruguay before sanctions disrupted the trade, which last year amounted to 96 tons worth $712,000, according to Dinara. Márquez is optimistic that he will be able to find buyers in other countries until the Russian market reopens.

Russia’s share of Uruguay’s caviar exports fell last year from around 17% in 2019 to 2.4%. “For two or three years we have practically not been exporting caviar to Russia,” said Márquez. “The rest of the countries paid more. Russia is historically a low-priced, high-volume buyer.”