European politics expected to impact seafood prices

Economic uncertainty in markets anticipated following Britain’s decision to leave EU

Fisheries economists and processors are keeping watch on the development in the European Union since Britain voted to exit, with an eye to how the shake-up in the EU will affect seafood marketing.

For the short term, the Alaska Seafood Marketing Institute says there will be economic uncertainty and volatility, with impacts possibly including disruption of long-standing business arrangements.

The United Kingdom, ASMI notes, in draft observations for its upcoming market report, is not self sufficient in food, with about 38 percent of the food eaten imported. The economic consequences of the break-up will impact consumer prosperity, confidence and demand, the report forecasts.

Mid-term, it will take two or more years to separate the UK from the EU, and the impacts on food policy, tariffs and trade negotiations are unknown, and for the long term, there will be dissension within the UK, ASMI forecasts.

Alaska’s seafood industry is paying attention because the UK is a major market for Alaska salmon in particular, but also pollock and cod.

In 2015, the UK imported over $90 million worth of Alaska seafood, with canned salmon making up about 70 percent of Alaska exports there. The UK is the largest export market for canned Alaska salmon.

The most immediate impact of Britain’s exit from the EU is its impact on Currency markets, ASMI predicts. The mid-June election in which UK citizens chose to exist the EU by a vote of 52 percent to 48 percent came as a surprise to many after the polls closed, and in the days that have followed that vote there have been increasing questions of how and when Britain would leave if EU, or not.

As discussions continue in the hierarchy of the EU, Alaska’s salmon fisheries are in full swing and buyers from the UK were in Emmonak, on the Lower Yukon, in late June, to check on the progress of the harvest of oil –rich Yukon chums processed in Emmonak before shipment overseas.

While domestic sales for Kwik’Pak are going up, the company also has established markets for fillets of Yukon chums in Europe and headed and gutted fish in Asia.

Jack Schultheis, general manager of Kwik’Pak Fisheries, a subsidiary of the Yukon Delta Fisheries Development Association, said the run has been very good, very healthy. By using dip nets for the early part of the run, harvesters avoided Yukon kings, but were able to switch to gillnets by June 25, and by June 28, preliminary harvest statistics gathered by the Alaska Department of Fish and Game showed a Lower Yukon harvest of some 202,000 chums. “We are about double where we were a year ago,” said Schultheis, who also is chairman of the board of ASMI.

In a worse case scenario, he said, “we will preserve that market. We have too much invested in this market. Markets go up and down all the time. We look at our customers as partners with us, so we don’t change sides just because someone pays us a nickel more.
“We have long term relationships with our customers. We are not market changers. They understand what we are about and the value of Yukon fish,” he said.