Fish production companies from Indonesia to Norway may benefit from an increase in demand from Japan, where radiation released by a crippled nuclear plant has been detected in the ocean and the food and water supply.
Hong Kong’s Pacific Andes International Holdings Ltd. and Norway’s Marine Harvest ASA (MHG), Cermaq ASA (CEQ) and Salmar ASA (SALM) may see higher demand for their fish to make up for a drop in Japan’s seafood production. Five kinds of radioactive material released by damaged fuel rods from the Fukushima Dai-Ichi facility were detected in the nearby sea, including iodine-131, cesium-134 and cobalt, according to plant operator Tokyo Electric Power Co.
Chief Cabinet Secretary Yukio Edano said yesterday the government instructed regulators to implement maximum monitoring on Japan’s seafood. The prefectures nearest the nuclear plant damaged by the March 11 earthquake and tsunami -- Miyagi, Iwate and Fukushima -- produce 707,500 tons of seafood, accounting for 13 percent of Japan’s 5.6 million tons of annual production, according to Statistics Japan.
“The fishing industry in Japan is actually badly destroyed or harmed by the earthquake and nuclear plant crisis,” said Katie Tsui, head of investor relations at Pacific Andes International Holdings Ltd. (1174) “It’s possible, in the longer term, demand for fish from Japan will increase.”
Japan consumes about 9 million metric tons of seafood a year, second behind China, according to the website of the Sea Around Us Project, a collaboration between the University of British Columbia and the Pew Environment Group. It is also the largest importer, according to the UN Food and Agriculture Organization.
Fish are at lower risk of radioactive contamination than vegetables in Japan as radiation is diluted in seawater, the Agriculture Ministry said today.
Tokyo Electric Power detected cobalt, iodine and cesium in the sea near water outlets from reactors at its stricken Fukushima Dai-Ichi nuclear plant this week.
Pacific Andes Resources, a Singapore-based trading company 65 percent owned by Pacific Andes International, operates a fish-processing plant in Qingdao, China, and is China’s largest importer of frozen fish, Tsui said.
Sales to Japan account for 8.5 percent of group revenue, with its No. 1 export being Alaska pollock roe, a Japanese delicacy, Tsui said. Pacific Andes also supplies McDonald’s Corp. (MCD) with pollock for its restaurants.
Alliance Select Foods International Inc. (FOOD), a Philippine exporter of processed tuna, expects demand from Japan to rise, Chief Operating Officer Teresita Ladanga said.
“Right after the quake, a Japanese buyer who had orders but didn’t want us to ship just yet, suddenly needed the product as soon as possible,” Ladanga said. “Definitely, it will benefit the Asian canneries because Japan will be needing more.”
Alliance exports all the 200 tons of seafood it processes daily and about five percent is sold to about 10 Japanese clients, she said.
Japan is the world’s largest importer of food and the second-largest consumer of seafood, according to the UN Food and Agriculture Organization.
Japan is the second-biggest market for Vietnam’s seafood, buying about $900 million of its exports last year, according to the Vietnam Association of Seafood Exporters and Processors.
Vietnamese companies that import unprocessed seafood from Japan for processing and re-exporting back have seen delays in raw material shipments, said Nguyen Hoai Nam, the industry group’s deputy chief administrator.
Indonesia, the world’s third-largest fish producer, also stands to benefit. Thomas Darmawan, chairman of the Indonesian Fishery Product Processing & Marketing Association, said on March 22 that demand from Japan may increase 5 percent.
Indonesia’s largest seafood export to Japan by value was shrimp, with shipments worth $375 million. Second was tuna, which accounted for $160 million of the country’s total seafood exports to Japan of $692 million in 2010, Darmawan said.
Norway is the world’s second-largest exporter of seafood after China, according to the UN Food and Agriculture Organization. The industry there may see “a positive benefit” because of the potential drop in Japanese seafood production, Dag Sletmo, an analyst at ABG Sundal Collier Holding ASA in Oslo, said in an e-mail.
Japan accounts for 4 percent of Norway’s salmon exports, he said. Marine Harvest, Cermaq and Salmar could benefit “as salmon is a high-value fish which can defend high transportation costs,” he wrote.
Japan exported 195 billion yen ($2.4 billion) of seafood last year, accounting for 0.3 percent of total exports, according to data on the website of the Ministry of Agriculture, Forestry and Fisheries.
Total food exports from Japan amounted to 481 billion yen last year, accounting for 0.7 percent of total exports, according to data on the Ministry of Agriculture, Forestry and Fisheries website.
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