July 16, 2008

Japan's local seafood supply threatened by high oil prices

Rising oil prices have created a scene in Japan - fishermen protesting in the nation's capital.

Fishery cooperatives have organized a nationwide strike with 200,000 vessels, or almost the entire industry, halting operations. About 3,600 fishermen and supporters are to protest in Tokyo calling for the government to provide assistance to the fishing industry. 

Analysts say the seafood-loving nation could face a food crisis if the strike is prolonged. About two-thirds of the fishing fleet in Japan sustained losses last year. Losses this year are likely to be worse as oil prices have registered huge increases.

The price of gas at Japan's pumps has jumped to about $6.40 a gallon from $4.35 in the spring. Although prices of seafood have risen, fishing companies say costs are not easily passed on due to competition from imports.

Oil now accounts for 25 percent to 40 percent of overall expenses, and prices have doubled from a year ago.

One in five of Japan's fishing companies faces closure if oil prices continue to remain high, according to the National Federation of Fisheries Cooperative Assns.

This could result in the seafood catches in Japan to be halved.