April 6, 2010

Chilean seafood output to plunge after earthquake

The earthquake and subsequent tsunami that struck Chile earlier this year will reduce the country's seafood production drastically.

Luis Felipe Moncada, general manager of the Association of Fishing Industrials of the Bio Bio Region AG (ASIPES) said the output decline is due to the damage to the processing plants and the 56% land loss of the Octava Region.

Currently only 25% of the installed capacity of the industry is operational, and in the next two months another 25% will be re-established, Moncada explained.

Frozen jack mackerel production, in particular, will fall 60%, from the 106,334 tonnes registered last year.

Canned seafood production is expected to suffer a 40% fall since only two operational processing plants now exist.

Around 50% of fishmeal and fish oil processing facilities sustained some damage, and production could drop by nearly 30% this year, according to Moncada.

It is not clear how low sector earnings will fall due to fewer sales. However, the rise in the international price of fishmeal, which reached US$1,770 per tonne will help offset lower plant production.

Of the 34 plants of the industry in the Octava Region, while eight are already operational, 14 will not resume production in 2010.

The government announced that it will invest US$110 million to start up a federal rebuilding initiative following the seismic event.

In artisanal fishing, which was one of the most affected production sectors, several emergency measures will be applied, including a package called 'Levantemos Chile' that will be financed through state resources and budgetary allocations from the Fisheries Administration Fund and the Artisanal Fishing Financing Funds.