Commercial fishing slow for sockeye, good for chum
Peninsula Clarion by Elizabeth Earl – July 12, 2018
Commercial fishermen around the Gulf of Alaska are seeing weaker sockeye salmon runs, but Cook Inlet salmon fishermen at least are seeing more chum salmon than usual.
The long Southeast summer king opener closes on target
KCAW by Robert Woolsey – July 13, 2018
Almost two weeks after it opened with mixed expectations, the first summer troll fishery for king salmon in Southeast Alaska is coming to an end.
Chinese delegation visits Kodiak as Trump administration issues new proposed tariffs
KMXT by Daysha Eaton – July 13, 2018
A delegation from China visited Kodiak Island with the Alaska Seafood Marketing Institute, touring fish processing plants in Kodiak and Larsen Bay.
Right in the middle of the visit, President Donald Trump’s administration proposed more tariffs, which doesn’t bode well for Alaska’s seafood trade.
Hatchery debate wages on as research continues
KBBI by Aaron Bolton – July 11, 2018
A conflict is intensifying over hatcheries in Prince William Sound.
For the second time this year, Alaska’s Board of Fisheries is weighing an emergency petition to block a hatchery from increasing its production. This is the latest skirmish in a battle over whether pink salmon hatcheries are causing more harm than good.
Chignik emergency petitions for sockeye spark Kodiak concern
KMXT by Kayla Desroches – July 12, 2018
Concern about the poor escapement for sockeye salmon in the Chignik area has led regional groups to seek emergency measures, but some Kodiak stakeholders are worried about what that could mean for the Kodiak management area.
Alaska fisheries ballot battle becomes more expensive
Mines dump $1.2 million more into ‘vote no’ campaign; total spending tops $7.2 million
Juneau Empire by James Brooks – July 11, 2018
This year’s fish fight is already half as expensive as the 2014 ballot battle over Alaska’s oil and gas tax system.
Why the China Tariffs Matter to the Seafood Industry
SEAFOODNEWS.COM by John Sackton (Editorial) – July 13, 2018
The proposed 10% tariff on all Chinese seafood exports to the US, combined with the 25% tariff on US seafood products exported to China already in effect in response to the first round of US tariffs is a major blow to the future of the US seafood industry.
The second round of tariffs has been proposed by the US trade representative will not come into effect until sometime after August 30th. Before then, there will be a public hearing, and various US industries will have the opportunity to comment. However, most experts do not see much chance of substantial revisions in the list, because the total amount of tariffs the US is seeking is so large, on $200 million worth of Chinese exports to the U.S.
We would like to explain why the seafood industry is so upset. This is not just a matter of adding 20 cents to the cost of a salmon burger. It threatens the role of the US seafood industry globally.
There are three reasons this is so dangerous to US producers, including domestic producers, and of course to importers and exporters.
First, if tariffs remain in place as a trade war escalates, this will disadvantage the US position in the global seafood trade.
Second, the fastest and most dynamic growing market for high-end seafood is in China. US producers, after having spent millions of dollars building relationships in that market, may get shut out.
Third, Chinese ecommerce is significantly more advanced than in the US. The disruption to ecommerce supply chains, which in China may be pressured not to touch US product, will consign US seafood products to second class status.
Let’s unpack these issues.
Seafood is the most highly traded international commodity. In the US, between 85% and 90% of all seafood consumed in a given year is imported. China represents about 15% of that amount. But when trade flows are restricted, as they are by these tariffs, it puts US importers and exporters in a second class status.
For US exporters, their competitors, whether in Russia, Canada, or Europe, will have the flexibility to price their goods based on global market demand; often led by China. But US exporters will have to price based on the demand for their products outside of China, or based on discounting to absorb the costs of the tariffs.
This makes the US industry less profitable than its global peers. So the growth prospects for US exporters are diminished.
For US importers, in some markets they will have to pay the extra cost and absorb the hit to their profits, or raise prices and see erosion of their markets. Exporters to the US from countries other than China will see increased demand for some species, and as a result, they will also be able to raise prices for their US customers. In short, US importers will not be paying the global price for these commodities anymore, but a global price plus the US tax.
An even bigger problem is that these kind of moves don’t just exist as numbers on a page. China for many years has been the fastest growing global market for high-end seafood. All seafood companies selling into China have been investing millions of dollars to build their brands and country of origin recognition.
Part of this has been driven by a strong Chinese preference for imported seafood, the result of scandals involving food safety and quality for Chinese produced products.
ASMI has made China one of its more significant targets for export growth. Alaska Governor Bill Walker led an export mission last month to China that featured a number of Alaskan seafood companies. All this money will go up in smoke. ASMI says it will turn to other markets. But it is more expensive to mount campaigns in 4 or 5 different countries than in a single large market like China. The impact of the seafood industry dollars spent on ASMI will decrease.
Even worse, if ordinary Chinese see the US as attempting to bully their country, they may turn against American goods. China has a very nationalistic streak, and at times this has led to riots against Japanese seafood companies in China, when tensions between those two countries were high. The US risks getting drawn into a similar relationship, where Chinese consumers actively seek to buy anything but American products.
Finally, much of the growth in high-end seafood consumption in China has been driven by the exponentially growing ecommerce networks, the rapid build out of the cold chain, and the pioneering hour to your door delivery systems.
Because seafood is such a culturally important food item in China, there has been a natural marriage between seafood and ecommerce, as represented by Hema stores, Alibaba, JD.com and GFresh among others.
These ecommerce companies have pioneered rapid import clearance and have worked with the government to streamline the entire fresh seafood import process. They are very vulnerable to official slow-down, further inspection, or other non-monetary actions that the Chinese are likely to take in response to these tariffs.
Further, these companies are pioneering a lot of distribution efficiencies. If these tariffs solidify, US companies will largely be cut out of this loop.
Make no mistake. Tariffs have the potential to close markets. If you look at where Thai shrimp is exported, for example, once the EU changed the tariff situation, taking away Thailand’s less developed country status, their shrimp exports to Germany dropped 80%.
Such closures can get locked in for a very long time, as markets continue to evolve and develop without the blocked products.
On the import side, there is a particular problem with US exports for reprocessing from Alaska. The fact is that over time a supply chain has developed where a substantial amount of pollock, cod, and salmon is caught in Alaska, sent to China for processing, and re-imported into the US as twice frozen blocks, frozen fillets and value added products. Many of these products are produced with very narrow margins, so there is little room to absorb the higher tariff cost.
This puts prices to Alaska fishermen at risk for such things as pink salmon and pollock.
Are there any winners here? Tariffs in theory help protect domestic industries so they can charge consumers higher prices, and be more profitable. But if you don’t have sufficient raw material to take advantage of this protection, the benefit is a more double edged sword.
Because if prices are driven up by shortage, supply chain disruptions, or other friction in the market, customers pull away.
The few instances where a domestic producer may benefit are hugely offset by the far larger groups that will see their businesses hurt. That is why everyone is so upset.
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