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Seafood and feed industries feel impact of Japan's disaster

A roundup of commentary from the world's press

March 16, 2011

Seafood and feed industries feel impact of Japan's disaster

A roundup of commentary from the world's press

Since the earthquake and tsunami hit Japan on Friday, the entire coastline between the ports of Aomori and Chosi has seen severely damaged. Numerous fishing boats, processing plants and fish farms have disappeared or been severely harmed, and the fishing fleet has ceased operating in the north due to alerts of possible additional tsunamis. In the areas where the tsunami caused the most damage – the ports of Hachinohe, Rikuzen-Takada, Kesennuma, Ofunato, Ishinomaki, Siogama, Shitigahama and Onahama - most vessels will not be able to operate for several weeks as a result of the absence of crew members and supplies. It is expected that most ports will not be functional for several months. The remaining vessels may in the interim operate from other ports, Fis.com reports.

Concerned by the possibility of radiation leakage from affected nuclear plants, a number of countries are now increasing their surveillance of food imports from Japan to ensure that they are safe for consumption. India, Thailand, Taiwan and South Korea are among countries that have ordered imported Japanese food products to be tested for radioactivity. Singapore's Agri-Food & Veterinary Authority said food products from Japan that were exported before 11 Mar 2011 are safe for consumption as they would not have been exposed to any radioactive contamination. These include products that are currently in the market and those which had arrived in Singapore over the last few days. As a precautionary measure, samples of fresh produce exported from Japan after 11 Mar 2011, including seafood, are being tested for radioactive contaminants with immediate effect. In 2010, seafood imported from Japan constituted less than 2% of its total seafood imports by quantity.

The Hindu Business Line said the tsunami that wreaked havoc in Japan last week is set to rock the $2-billion Indian seafood export industry. The North-Eastern city of Sendai in Japan, the epicentre of the quake and tsunami, was a bustling city full of seafood factories and processing units with which Indian exporters had direct links, Mr Anwar Hashim, President of the Seafood Exporters Association of India (SEAI), is quoted as saying.

While admitting that seafood exports to Sendai would be immediately affected, Mr Hashim pointed out that the impact on other export destinations such as Tokyo and Osaka has been on a far lower scale and trade with these destinations could revive faster. For the moment, all trade and commerce with Japan could come to a halt.

The impact in India would be most on shrimp farmers off the coast of Andhra Pradesh, Tamil Nadu, Orissa and West Bengal. Black tiger shrimps which are reared and harvested by these coastal farmers are much in demand and the major constituent of seafood exports to Japan.

Frozen large de-veined black tiger shrimps are a high-value delicacy in Japanese markets fetching high returns to the Indian farmer and the exporter.

The setback for Indian seafood exports comes on the back of recession in Europe, the biggest seafood export destination for India, appreciation in the value of the rupee against the euro and the economic collapse of Greece, Spain and Portugal. However, export figures for

April-December 2010 suggest that Europe was still able to retain the top slot accounting for 26.14 per cent of the total seafood export realisation.

Japan was the third most important export destination after the US and accounted for 15.12 per cent of the country's total seafood exports in value. Frozen shrimp continues to be the major item in the export basket accounting for 48.61 per cent of the total foreign exchange earnings. Not only does shrimp export fetch high returns but unit value realisation from these exports has also been rising. During the first nine months of the current fiscal unit value realisation from shrimp exports have risen by over 25 per cent.

Much of the black tiger aquaculture and exports is pursued along the East Coast of India. Although exports to Japan are also dominated by exporters from the East Coast, the biggest players are from West Bengal, sources in SEAI said. While seafood exports for the current year are not likely to be immediately affected, the next could year could start on a sour note, the sources warned. And they pointed out that revival of exports to Japan could take two to three months.

Meanwhile, in Australia, shipments of Tasmanian salmon to Japan have been put on temporary hold. Managing director of salmon producer Huon Aquaculture Peter Bender told ABC Rural that a shipment that was to go on the weekend is now in Melbourne, while they wait for airports to allow for things other than medical supplies into the country.  He said Japan would need to continue to import food, despite the crisis.

Asia's grain prices are likely to be easier this week on concerns that the earthquake and tsunami in Japan will slow down its imports as feedmills have been shut down and cargoes to be delivered in one month spillover to the next, Dow Jones reports. The news service quoted traders as saying imported grain deliveries to northern ports, such as Sendai, Hachinohe, Kamaishi and Kashima would be delayed. Even ports and grain feedmills which aren't damaged are facing power outages and breakdown of transportation network with inland consumers.

Japan is the world's largest importer of corn and one of the major importers of wheat. It imports around 1.35 million metric tons of food and feed grade corn and more than 350,000 tons of wheat each month. Japan's monthly imports of feed corn may fall by up to 8%, as Friday's massive earthquake hit operations of several compound feed manufacturers in the country. The area affected by the earthquake and subsequent tsunami produces one-sixth of Japan's annual compound feed output of around 24.3 million tons, they said.

If the mills operate at 50% of their capacity for the next six months, as many trading executives expect, Japan's compound feed production will fall by 1.0 million tons during the period, which would reduce feed corn imports by around 500,000 tons, a Japanese corn importer said.

Another concern is about congestion at ports, which will exacerbate delays. It is possible that southern ports, such as Tokyo, Yokohama, Osaka and Hiroshima, will see more shipments, and distribution inland will be arranged from these locations. Some ports in northern Japan such as Kushiro and Tomakomai that largely escaped the quake's wrath will also get higher traffic, said Nobuyuki Chino, president of Tokyo-based commodities trading company Unipac Grain.

Texas AgriLife Extension Service economists commented that the major port facilities in the southern part of Japan may have escaped the worst of the damage. If those facilities are still intact in terms of just the logistics of getting in grain and other food supplies it does not appear at this point that it's going to be a severe (long-term) limitation.

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