The prices of cod fish has gone down by 20 percent in Kodiak last week because the global credit crunch has almost stopped seafood business in the island. John Whiddon, manager at Island Seafoods, informed that there’s just so much uncertainty. Like so many others, the seafood industry depends on a long chain of buying and selling to carry out its business.
Gunnar Knapp, fisheries economist at the University of Alaska Anchorage, explained that the processors buy from fishermen, who then sell to wholesalers who sell to retailers and so on. He told that when things are working normally, a line of credit is a standard part of the business. And many of these companies have been doing business together for decades.
Knapp also said that presently the seafood businesses are finding it a lot harder to borrow money on credit, partly because the businesses who lend out the money are experiencing difficulties. He added that there is a global economic crisis, and many of Alaska’s competitors may have the same or worse credit and market problems. To the extent they are unable to supply markets, this could benefit the Alaska industry.
The global recession could reduce demand for higher-priced seafoods, and boost interest in less pricey products. Fishermen should also get a break with lower fuel prices over the next few months. Even brokers are in doldrums but they are optimistic about salmon right now. They said that the business is a bit slower in the halibut market, and he blames the recession for the trading stall.
