Autumn 1994 (2.3)
Caspian Caviar in Peril
by Masoud Javadi and Nasser Sagheb
Photography: Courtesy of Caviar & Caviar Ltd.
The Caspian Sea has long been known as home to the world's best caviar. Ninety percent of the world's sturgeons (processed eggs are caviar), live in the Caspian Sea area where they spawn in rivers that feed it.1 For centuries, the czars of Russia impressed their guests with caviar piled high in silver buckets.2 Their communist successors went on to turn the delicacy into a major luxury export commodity.
Sturgeon Fishermen on the Caspian.
Caviar used to be monopolized by the Soviets and Iran, the only two countries that touched the Caspian and which both cooperated to limit the supply of caviar and thus protect its price and image. In 1962 the Soviet caviar industry began exercising tight control by banning open sea fishing. Later they introduced aggressive breeding practices. An estimated 100 million sturgeon fry3 used to be released; of which Azerbaijan's fisheries contributed 5 million.4
Iran's caviar was, and still is, strictly controlled by the Shilat, the state monopoly which controls the entire fishing industry and oversees all activities related to the processing of caviar including domestic and international sales.5
Left: Black Pearls of the Caspian; Cutting Caviar from Sturgeon.
Right: Caviar Processing.
More Countries Eager to Sell Caviar
But now with the dissolution of the Soviet Union, there are five countries that want to market caviar. Besides Iran, there is Azerbaijan, Kazakhstan, Turkmen-istan, Russia including its two Autonomous Repub-lics-Daghestan and Kalm-ykia.
Naturally, each party wants to capitalize on caviar as much as possible. There are two exceptions: Turkmenistan is still incapable of any processing and Iran is still effectively managing its caviar industry through the Shilat. Meanwhile, Daghestan and Kalmykia are home to the two largest fisheries in the former Soviet Union and have the potential of producing and exporting disproportionate volumes of caviar to generate hard currency.6
Azerbaijan is hoping to produce 100 tons of caviar per year, most of it for export.7 The entire Soviet Union, on the other hand, used to limit its annual caviar exports to 150 tons.8 The temptations for war-ravaged Azerbaijan to maximize income from caviar is understandable given that 70% of the national budget has to go to the war and refugees.9
Top: Beluga Sturgeon: Large sized, can measure up to 4 meters in length and weighs up to 1000 Kg. Yields about 15% of its weight in caviar.
Middle: Asetra Sturgeon: Medium sized, 2 meters long, can weigh 200 Kg.
Bottom: Sevruga Sturgeon: Small sized, max. 1.5 meters long, rarely weighs over 25 Kg.
New Distributors on the Scene
Iran and the Soviet Union used to channel their caviar to the West through a small clique of foreign partners. Before Iran's revolution and the dissolution of the Soviet Union, the best known western supplier of Soviet caviar was Petrossian S.A. of Paris, a name still synonymous with high-end packaged caviar.10 Romanov was another well-known brand distributed primarily in the United States. While Petrossian held the monopoly in Europe, it competed with Romanov in the US.
Iranian Caviar was distributed by George Fixon's Eaglet Corporation. But the new political changes in both nations have resulted in new players on the scene such as Caviar House, and the Swiss company, Porimex, with its American arm, Caviar & Caviar.
Top Left: Beluga.
Top Right: Asetra.
Bottom Left: Sevruga.
Bottom Right: Asetra Royal Caviar, Gold.
Price - Depends on Where It's Bought
Caviar prices initially dropped on the international markets when the Soviet Union broke up. This was due to increased production and the availability of smuggled caviar.11 Caviar smuggling is highly lucrative because of vast price differentials. In Azerbaijan, for example, the average monthly wage is $8, but fishermen poach sturgeon for caviar that can fetch up to $100 per ounce in New York and Paris restaurants.12 The same caviar sells for $5 per pound on the mafia-controlled black market in Baku.13
Parallels Between Caviar and Diamonds
Parallels between the caviar industry and diamond industry are numerous. Both are image products catering to prestige and wealth, and both are derived from sources concentrated in specific geographic areas.
With diamonds, 80% of the world's supply is controlled by the South African cartel DeBeers14 which has for years succeeded in keeping the world's supply of diamonds at levels that command high prices. Industrial diamonds, for example, often sell for a fraction of the prices of diamonds in jewelry stores.15
Like DeBeers, Iran and the Soviet Union had created what could be called a caviar cartel by collaborating on export quotas. Reportedly, the newly independent nations (NIS) surrounding the Caspian Sea along with Iran have tried on several occasions to reach quota agreements.16 However, the lack of regulatory muscle, the poverty caused by economic havoc, and the basic unwillingness to address the problem of poaching have defeated all serious attempts at forming a new cartel.
Overfishing - Greater Threat than Pollution
Unlike diamonds, however, caviar comes from a living source which is in danger of disappearing from the Caspian. According to the Ichthyological Committee of the Russian Federation, Russia's official sturgeon catch was 50,000 tons at the turn of the century while the 1993 catch was estimated at 5,700 tons.17
The sturgeon is now in danger for various reasons. Sloppy drilling has resulted in the formation of a quarter-inch thick film of oil on some parts of the once pristine Caspian.18 Not only does this pose serious health hazards to the sturgeon but it also tarnishes its status.
"Caviar is an image product so we have had to work very hard at maintaining a positive profile" says Reza Vaziri of Caviar & Caviar. "The Iranian revolution caused considerable damage over a decade ago. But today's marketing has to counter images of petrochemical plants neighboring caviar processing operations in Azerbaijan, a coat of oil covering the sea on the coastline of Baku and industrial pollutants flowing down the Volga River in Russia."
Overwhelming evidence would suggest that the sturgeons' main enemy is not pollution but rather overfishing. An estimated 90% of sturgeons are killed before they are mature enough to reproduce and the number of sturgeons returning to the Volga River each year has, reportedly, declined three-fold since 1991.19
Some rare species of sturgeon are already considered extinct.20 No more than 100 of the giant beluga are believed to be caught each year, signaling a threat to this 120 million year old sturgeon species that navigated the seas when dinosaurs roamed the land.21 The beluga can weigh as much as 1.5 tons and can live over a century.22 In the 1970s it was not uncommon to find 60 year-old, 900 pound Beluga in the Caspian.23
These days, with her spawning grounds up the Volga dammed, with pollution and waste poisoning her path, and with rampant poaching, the average weight of the Caspian beluga is said to be 77 pounds.24 Most are killed before even reaching maturity which usually takes 18 years.25
All factors are not necessarily working against the sturgeon. The Caspian Sea has risen two meters since 1977 which under normal circumstances should bode well for the sturgeon population.26
Ironically, the rise in the Caspian's water level may ultimately help the sturgeon as it may dilute some of the pollution, and bring greater numbers of fish as a food source to their habitat. However, this possibility is laced with controversy. Some biologists believe the benefits of a higher sea level will be negated by a rise in the toxins washing from the factories' and towns' accumulated wastes, including oil field spillage into the Caspian Sea.27
1. A ban on poaching must be enforced vigorously by all countries. Pressure spearheaded by the Western distributors of caviar has finally resulted in the formation of a special armed Interior Ministry police unit in Russia that roams the waterways and arrests poachers and underworld processors of poached caviar.28 "We mounted a public relations educational campaign by producing a television commercial depicting a cartoon-like sturgeon pleading for his life," says Vaziri who claims the project has made a difference.
2. There has to be a serious agreement between the countries and autonomous regions now surrounding the Caspian in regard to fair quotas that will benefit everyone. This would revive the cartel status of the caviar industry like the one prior to the Soviet break-up.
3. Open sea fishing should be banned to prevent killing young, immature fish. Sturgeon caught in the rivers while returning to spawn contain on average 14% body weight in caviar while those caught in the sea contain about 3%.29 Azerbaijan, Kazakhstan, and Russia need to formalize the initial quotas regarding Russian Volga River caviar which Russia proposed to split among the three nations.30 Such action would eliminate Azerbaijan's and Kazakhstan's need to capture the sturgeon in the Caspian.
4. Industrial pollution flowing into the Caspian must be reduced to a minimum. Ironically, the economic decline of the Soviet Union has actually reduced industrial output resulting in reduced levels of pollutants.31 But a reversal of economic fortunes would quickly change this temporary benefit.
5. Future oil drilling both onshore and offshore must conform to the cleanest standards. Members of the Western Oil Consortium now negotiating the Caspian oil concession with Azerbaijan, are pledging to preserve the Caspian's environmental integrity. According to Tom Mueller, Public Affairs Director for Amoco Caspian Sea, the oil companies are conscious of their responsibilities, "We are committed to minimizing the impact of our drilling operations wherever we work. We'll carry this same commitment to Azerbaijan."
Nasser Sagheb is a management consultant. Masoud Javadi is a business attorney. Both are based in San Francisco.
1 Michael Dobbs. "The Coming Caviar Crisis," Washington Post, May 30, 1992. A1.
2 Jane Mayer. "Caviar Could Become Cheap," Wall Street Journal, Nov. 18, 1991. A1.
3 Ibid. A18.
4 Ibid. A9.
5 Michael Specter. "Pollution Threatens World Caviar Source," New York Times, Jun 7, 1994. B10.
6 Mayer. A12.
7 Sonni Efron. "A Caviar Crisis in the Caspian," Los Angeles Times, Aug. 28, 1993. A9.
8 Mayer. A12.
9 Specter. Pollution.
10 Mayer. A12.
12 Michael Specter. "Azerbaijan, Potentially Rich, Is Impoverished by Warfare," New York Times, Jun 2, 1994. A1.
14 Karl Case & Ray Fair. Principles of Economics. Prentice Hall, 1994. p. 359.
15 Bill Keller. "DeBeers May Be Losing Grip on Diamond Market," New York Times, Sept. 3, 1992. A1.
16 Efron. A8.
17 Ibid. A9.
18 Specter. Pollution.
19 Ibid. A8.
21 Efron. A9.
22 Ibid. A1.
23 "Sturgeons' Spawning Grounds Lost," Washington Post, May 30, 1992. A18.
24 Efron. A8.
25 Ibid. A1.
26 Ibid. A10.
27 Specter. B10.
28 Ibid. B10.
29 Efron. A9.
30 Dobbs. A18.
31 Efron. A10.
From Azerbaijan International (2.3) Autumn 1994.
© Azerbaijan International 1994. All rights reserved.