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Expansion continues.

The value of Alaska's exports rose again last year, according to tallies reported by the University of Alaska Anchorage's Alaska Center for International Business (ACIB). Exports of Alaska goods, worth $4.4 billion in 1991, marked a 22 percent increase over the prior year's $3.6 billion. Seafood and petroleum product sales rose. While timber transactions slipped, coal held steady. Mineral exports climbed as a result of a reporting change.

Exports classified as "other" climbed most steeply in 1991, jumping 65 percent from the 1990 value to a total of $1.5 billion. All but $70 million of this category reflects export via air cargo of products manufactured in the Lower 48 and shipped through Alaska. Most of these goods are transported through Anchorage International Airport, the largest-volume air-cargo airport in North America.

Alaska's air-cargo exports have increased nearly 800 percent since 1989, when companies such as Federal Express began using Anchorage as a distribution center for international shipments, according to Bill Aberle, coordinator for the Information Services Program operated by ACIB in Anchorage. ACIB export tallies indicate that air-cargo exports now account for about 33 percent of total state exports.

Alaska's chief export commodity, seafood, represented roughly 35 percent of the total value of 1991 exports. "There was quite a transformation in seafood, with large increases in bottomfish and crab," says Aberle. In 1991, the value of seafood exports climbed 9 percent to $1.6 billion, despite sharp decreases in volume and price of salmon exports.

The volume of salmon decreased more than 16,000 metric tons last year, while lower prices reduced the salmon's export value to $212 million, down $158 million from 1990. For the first time, salmon did not top the seafood export list; exceeding the value of salmon exports were crab ($349 million), fish roe ($220.7 million) and TABULAR DATA OMITTED fishsticks and surimi ($322.5 million).

Weak timber and pulp prices drove the value of timber exports down 13 percent in 1991. Spruce logs and timber dipped $10 million to $157 million, although volume rose. Only pulp and wood chips brought more money in 1991 than 1990; the value of pulp doubled to $4.6 million and wood chips quadrupled to $8 million.

Eric Downey, a research associate with ACIB, says, "Japanese demand is down tremendously, back to '85 levels. But supply problems in Washington and Oregon cushioned the effect of a falling market." Downey points out that Alaska suffered its own supply problems, and three sawmills -- at Klawock, Haines and Seward -- remain closed.

Petroleum product exports increased to $611 million, up 36 percent from 1990's $448 million. Sales of liquid natural gas, heavy fuel oils and urea contributed to the trade expansion.

Alaska's mineral exports posted a 22 percent gain in 1991, from $139 million to $170 million. Aberle says this gain reflects a correction in U.S. Bureau of the Census reporting. In 1990, the bureau credited about $70 million of Alaska mineral exports to Washington state. The corrected figures for mineral exports show a 19 percent decline in value for 1991, despite an increase in volume.

Mineral exports from the Red Dog Mine near Kotzebue enter Canada at Vancouver, British Columbia, but cross the border into Washington state on the way to Trail Creek, B.C. In 1990, these mineral exports were reported as having come from Washington, rather than Alaska.

Japan remains, by far, the largest purchaser of Alaska products. In 1991, the nation imported $2.8 billion of the $4.4 billion total, an increase of almost 17 percent from 1990's $2.4 billion.

Although Alaska's major trading partner, Japan is less dominant than in prior years; Japan's percentage of Alaska exports declined from 72 percent in 1987 to 63 percent in 1991. Japanese imports of Alaska products have grown, but the 49th state's sales to other Asian countries, Europe and Canada have grown faster.

Purchases of Alaska seafood by the Japanese rose 4 percent to $1.3 billion last year. Crab and groundfish accounted for a greater share of the state's seafood exports to Japan than in prior years.

Alaska's timber exports to Japan dropped for the third straight year, down 14 percent from $431.8 million to $371 million. Declining timber prices and a slowdown in the Japanese economy contributed to the decline.

Japanese imports of Alaska minerals dropped 35 percent from 1990 to $20.9 million last year. Alaska mineral exports consist mainly of zinc and lead, both used in car-building and construction. According to Aberle, when the economy of either the United States or Japan improves, demand for and prices of minerals should rise.

Korea is Alaska's second-largest trading partner and an increasingly important one. Korea imported $529 million worth of Alaska goods, up 38 percent from 1990's $383 million. Sales to Korea accounted for 12 percent of the state's total exports in 1991, up from almost 11 percent in 1990. Exports to Korea via air cargo almost doubled from $117 million to $225 million.

Sales of Alaska seafood to Korea jumped 60 percent, from $81.2 million to $133.7 million. Aberle expects seafood sales to Korea to increase further. "In 1993, Korea is hosting the Dae Jong Expo and 10 million people are expected to attend. During previous events, such as the Asian games, there have been big rises in seafood demand," he says.

Alaska timber imports by Korea decreased almost one-third, from $53 million to $37 million. ACIB's Downey explains that Korea has been switching to radiata pine, which comes from Chile and New Zealand, but notes the change may not be permanent. Although radiata pines grow extremely quickly, the wood lacks structural integrity and is inferior to other woods for many construction applications.

Alaska petroleum product and coal exports to Korea were stable from 1990 to 1991, while mineral exports rose almost 70 percent, from $3 million to $5 million.

Mainland China received 70 percent more Alaska exports in 1991 -- $145.1 million -- than in the prior year. The country's chief Alaska import is petroleum products, which rose 56 percent in value from 1990 to $89 million last year.

The state's seafood exports to China also leaped in 1991, from a miniscule $81,000 in 1990 to $11.5 million. Sales of Alaska timber increased as well, rising from $23 million to $29.9 million.

Taiwan's trade with Alaska also expanded in 1991. The island nation bought 24 percent more Alaska goods, worth $124.5 million in 1991. In contrast to sales to other Asian countries, Taiwan's Alaska timber purchases rose from $33.3 million in 1990 to $52.6 million last year.

Also in 1991, air-cargo exports leaving Alaska for Taiwan climbed 72 percent to $51 million in 1991, while seafood sales dropped 41 percent to $13.3 million.

Canada is easily Alaska's largest trading partner in the Western Hemisphere, importing a total of $108.8 million of the state's goods last year, triple the $36 million of 1990. The reported trade expansion results from a Bureau of the Census mistake last year in attributing minerals exported to Canada from the Red Dog Mine in Alaska to Washington state. This error, since rectified, caused mineral exports to Canada to soar from $100,000 in 1990 to $58.2 million last year.

Alaska seafood sales to Canada rose 61 percent to $12.2 million in 1991, while timber exports more than doubled, from $3.5 million in 1990 to $9.1 million last year. Air-cargo exports rose 17 percent to $23.8 million, and petroleum product exports increased 20 percent to $5.5 million.

Europe, whose imports of Alaska products have increased 830 percent over the last five years, bought fewer Alaska exports last year than in 1990. The value of Alaska exports to Europe fell slightly, from $244.7 million in 1990 to $241.8 million in 1991.

Declining in 1991 were timber exports, down 42 percent to $12.8 million, and mineral exports, down 16 percent to $85.6 million. Alaska's seafood sales to Europe were bolstered by groundfish exports, which rose from $97.7 million in 1990 to $107.3 million last year.

Although Alaska's salmon exports declined in value because of price and volume decreases, sales by other salmon producers suffered, too. For example, Norway's production of farmed salmon dropped from 150 tons in 1990 to 120 tons in 1991.

"If Alaskans can manage to sell salmon for no more than $2.60 per pound, we could really compete in Europe," says Aberle.

Russia and the rest of the Commonwealth of Independent States, while still a small export market, generate a lot of interest among Alaskans. The province of Russia imported $7.5 million in Alaska goods last year, mainly timber in the form of dissolving grades of pulp and pink salmon donated by Gov. Walter Hickel.

Donna Logan of the state Governor's Office of International Trade explains that repatriating profits from the former Soviet state remains difficult, because rubles are still not convertible to dollars. She notes, "People are very excited about Russia. The first thing we ask them at this office is 'How do you expect to get paid?'"

Logan says many Outside companies are looking in Alaska for people with experience in Russia. "There have been a lot of horror stories about the corruption there. But as the ruble becomes convertible and new laws are established for doing business, Alaska could become a gateway between the United States and Russia," she adds.

Trade Debate

Trade specialists dispute how exports should be counted. Both the University of Alaska Anchorage's Alaska Center for International Business and the Alaska Department of Commerce and Economic Development's Office of International Trade use figures gathered by the U.S. Customs Department and compiled by the U.S. Department of Commerce's Bureau of the Census. But ACIB publishes state-of-exit figures, while OIT uses state-of-origin figures.

The main difference in the two sets of numbers is that ACIB counts goods manufactured in the Lower 48 and being shipped through Alaska's airports, primarily Anchorage International Airport, as Alaska exports, while OIT does not. Because ACIB reckons the value of such transported goods to be $1.4 billion in 1991, the two organizations' numbers can differ considerably. In 1990, the latest period for which comparable figures are available, ACIB pegged Alaska exports at $3.59 billion, while OIT calculated the state's goods shipped abroad at $2.98 billion.

At press time, OIT's 1991 figures were not yet compiled, but certainly its figure will fall below ACIB's $4.4 billion tally for 1991. Numbers used in the accompanying article reflect ACIB-provided statistics.

Customs derives the data from shippers' export documents. These declarations note both the state of origin and the state of exit. The state-of-origin notation is based on the zip code where the shipment originated.

The U.S. Department of Commerce cautions, however, that the shipper can choose from any of four definitions for the origin of a shipment, and that some shippers leave the point-of-origin block blank. For example, because of these discrepancies, grain shipped from the Midwest down the Mississippi to New Orleans is often counted as a Louisiana export.

While the state of exit is not usually in dispute, some specialists feel that figures compiled on that basis grossly overcount states with large ports or air-cargo facilities and undercount states in the interior of the country.

Gary Finseth, assistant director of Oregon State University's International Trade Institute in Portland, Ore., says his organization keeps both sets of figures. "To produce state-of-origin figures, the computer algorithms aggregate the numbers to supply the missing data and you lose detail. If you use the state-of-exit figures, you get the detail, but some states are overrepresented."

Don Lorentz, director of market and target industries for Washington state's Department of Trade and Economic Development in Seattle, Wash., says while his agency publishes state-of-origin numbers, it looks at both sets of figures, depending on what application is needed.

Bill Aberle, coordinator for the Information Services Program operated by ACIB, admits that state-of-exit figures tend to overcount exports from coastal states. But he says these figures provide a breakdown of exports into categories, which gives more specific and more useful information. Aberle also feels that state-of-exit figures more accurately reflect Alaska's economy than state-of-origin figures. "We feel that because Alaska is not part of the contiguous United States, it's pretty easy to identify what was an Alaskan product and what wasn't," he says.

Donna Logan, trade specialist for the Governor's Office of International Trade, argues that the advantages of state-of-origin figures are a more accurate count and, because the figures are compiled the same way for all states, the ability to make valid comparisons. "The department reviews these statistics to be as accurate as possible. Some businesses' total market strategy is based on statistics," she says.

Says Oregon's Finseth, "Alaska figures are not out of line with what everybody else uses. Different groups are interested in different things."
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Title Annotation:Year-End Trade Report; includes related article; Alaska exports
Author:Gerhart, Clifford
Publication:Alaska Business Monthly
Article Type:Industry Overview
Date:Jun 1, 1992
Previous Article:Staff slicing.
Next Article:Southeast.

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