Slumping dollar helps Alaska exporters

Posted: Thursday, July 25, 2002

ANCHORAGE (AP) -- The sinking dollar is lifting the fortunes of Alaska exporters.

''It's a very good time for American fishermen, farmers and loggers,'' said Terry Gardiner, president of NorQuest Seafoods Inc. of Seattle.

While the weaker dollar means less buying power for companies that import foreign goods, it is good news for companies in the business of exporting Alaska commodities such as fish, fertilizer and minerals. When foreign currencies strengthen, it means buyers in Tokyo, London, Seoul or Frankfurt can buy more U.S. goods with each yen, pound, won or euro.

Since early this year, most key currencies have strengthened significantly against the dollar. The yen is about 12 percent stronger, moving from 134 yen per dollar to 118. The pound has strengthened 8 percent, the Canadian dollar 4 percent, the South Korean won 11 percent and the European euro 12 percent.

Greg Wolf, director of the state Division of International Trade and Market Development, said companies exporting Alaska goods keep a close eye on foreign currencies because shifts in exchange rates can mean big dollars.

Wolf cautioned, however, that favorable exchange rates are only part of the equation. The best scenario is when a foreign country has both a strong economy and a strong currency.

''With a strong economy, they have increasing demand for what we sell,'' Wolf said.

Currently, Japan's economy remains mired in recession. But South Korea, an increasingly valuable Alaska trading partner, has both a strong economy and currency, Wolf said. South Korea is a primary importer of ammonia and urea from the Agrium Inc. fertilizer plant at Kenai, he said.

In 2001, seafood made up 49 percent of Alaska exports, following by minerals with 14 percent, oil and gas with 12 percent, fertilizer with 8 percent and wood with 6 percent, according to the international trade office. Total export value was more than $2.4 billion.

By country, Japan is the most important buyer of Alaska exports, accounting for 44 percent in 2001. Canada was next with 8 percent.

In general, the rise in the value of currencies like the yen and the pound in Britain, the top consumer of Alaska canned red salmon, is good news for Alaska, agreed Gunnar Knapp, an economist at the University of Alaska Anchorage.

But he noted that although the yen has shown a dramatic rise in value over the past few months, the increase basically offsets its steep decline beginning last fall. Between September 2001 and February, the yen fell from 118 yen per dollar to about 134.

''Thus, basically, we aren't much better off than we were a year ago,'' Knapp said.

All Gardiner knows is, he's glad the yen is stronger now. That means the Japanese can pay more for Alaska red salmon. And for other Alaska fish, such as black cod, a pollock-based fish paste called surimi, and salmon eggs.

But even though the yen is stronger, that in itself won't help Alaska seafood producers because the Japanese could choose to spend their money on competing goods, such as farmed salmon from Chile.

''It's not like an instant cash register,'' Gardiner said. ''You still have to go out and make it happen.''

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