April 24, 2014
This is Fish Radio. I’m Laine Welch – A strong US dollar and Alaska seafood sales. More after this –
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The dollar has steadily gained strength and that will be a factor for Alaska’s global seafood customers.
What’s happening is that the dollar is really strengthening against a basket of currencies and the reason is because the US economy is doing a bit better than many other places. 6
Market expert John Sackton produces the ‘go to’ website Seafood.com. A stronger dollar is good news for all those imports coming into the US, he says, such as farmed shrimp, salmon and tilapia.
So it makes imports less expensive for the US and it makes export from the uS more expensive in the host currency, whether it’s yet or Euro or Canadian or whatever.
The Japanese Yen is down 20% against the dollar, but Sackton says that is being offset by Japan’s strong economy.
That seems to be what is happening in Japan. Despite their weakening currency they are still going to be strong buyers for things like crab and salmon and surimi because their economy is getting better also.
The Euro started off the year at the highest it’s been for a few years – one Euro will get you about $1.40 per US dollar.
So the difference is that when you are selling something like Alaska pollock, they have the net effect of a slight price reduction in that their Euros will buy more dollars worth of pollock this year than they did last year.
Sackton says it now costs Canadians $1.10 per US dollar. Canada is the biggest competitor for Alaska snow crab, and its weaker currency can benefit Bering Sea prices.
It helps support the Alaska price because now instead of the C undercutting the price, the fact that they have a weaker currency makes it more likely they will and maintain the price. So it’s not just a matter of what we buy and sell, it’s also how the currencies affect the sales prices in our own markets.
The value of the Yuan is rising for China, our #1 customer,
If you are buying things out of china , like processing there and paying your costs in dollars, that it is going to be a slight advantage. You are going to have the currency wind at your back when you are converting your dollars to Yuan to buy things in china, like labor and processing fees.
Seafood is Alaska’s top export by far and Sackton says overall, sales could be slightly tougher.
Alaska has such a huge share of US exports, the strengthening dollar is going to make it slightly harder for Alaska to be competitive. But I would think of it more as a headwind rather than a change in direction.29
Fish Radio is also brought to you by Ocean Beauty Seafoods. Ocean Beauty has contributed over 10 million meals to the U.S. Food Bank network, and is committed to ending hunger in America. www.oceanbeauty.com In Kodiak, Laine Welch.