In Depth: China’s Troubles May Help (or Hurt) Alaska Industry

“I don’t claim to be an expert on this,” said Gunnar Knapp, a researcher at the University of Alaska Anchorage. “All I did was visit a couple of plants.”

Still, Knapp said he was impressed with the cleanliness and record-keeping at the two plants he visited while in Qingdao to speak at a United Nations food and agriculture conference.

On June 27, China closed 180 food factories, after inspectors found industrial chemicals being used in a range of products, from candy to seafood. Knapp would not disclose which plants he visited, so it’s unclear of those sites were on the list of closures.

The U.S. Food and Drug Administration on June 28 announced a broader import control of all farm-raised catfish, basa, shrimp, dace and eel from China, to protect U.S. consumers from unsafe residues that have been detected in these products.

Federal officials said they would begin to detain these products at the border until shipments are proven to be free of residues of drugs not approved in the U.S. for use in farm-raised aquatic animals.

In 2006, Alaska exported to China seafood valued at $323 million, up 33.7 percent in value over the previous year. The high increases in seafood exports to China are attributable primarily to China’s reprocessing activity for re-export, state officials said.

Alaska seafood is also available on a retail basis in a growing number of Chinese cities.

Steve Grabaki, a fisheries consultant and president of Graystar Pacific Seafood in Anchorage, said the adverse publicity about seafood processed in China will give seafood processed in the United States a slight competitive market advantage, “but who knows for how long. Especially if a customer in the Lower 48 has been relying on imports from China.”

For the short term, at least, “any seafood processed in a foreign country is now getting a sideways glance,” he said. “It’s out of American control and anything processed in China is suspect.”

The FDA’s action meanwhile has triggered critical media attention to Chinese seafood exports. Editor and publisher John Sackton of seafood.com noted in an online editorial June 29 that the bloom is off the rose for China’s seafood export revolution.

“In some ways all parts of the industry—from processors who ship product to China, to importers who bring in both wild and farmed product, and to their customers, which include all the major retail chains and the foodservice industry in the U.S.—are to blame for the increased costs, confusion and economic pain that is going to result from these widespread detentions,” Sackton wrote. “We as an industry have made our bed in China. And there are some fantastically clean and successful processing plants that have been built there. But in pursuit of lower costs, the move to China has always had a down side. Costs were lower, but so was transparency.”

“In the end, this country-wide detention is a blow for seafood integrity, and the industry is right to get behind it,” Sackton said.

“Yet, at the same time, we should never have allowed things to get to this point.”

Qingdao, a key economic center and one of China’s main ports for foreign trade, lies on the Yellow Sea, due west of South Korea. The city is also an important base for ocean research in China.

“They made everyone put on protective clothing, go through hand and boot washes,” Knapp said. “They do it any place that is meeting state-of-the art world standards for fish processing. They do it because their customers absolutely insist on it. The buyers are incredibly picky.”

Knapp declined to identify either of the plants or the processor that had contracted to have raw wild Alaska seafood processed into value-added product, saying the processor wished to remain anonymous.

Knapp acknowledged that there are serious problems in China in general in product quality and safety, including the food sector.

“But I think you need to make a distinction between the reprocessing that is going on of things like Alaska salmon, which is done in state-of-the-art, large-scale, ultra-modern factories such as the ones I visited,” he said.

According to Knapp, the reprocessing industry in China is working at different standards and conditions than the industry using original Chinese products for the domestic market. Reprocessing of Alaskan seafood for export gets the highest level of quality and safety, followed by fish sources from China destined for a foreign market, he said.

“The lowest level (of quality and safety) is Chinese fish for Chinese markets,” he said.

According to the FDA, a targeted sampling conducted from October 2006 through May 2007 repeatedly found that farm raised seafood imported from China was contaminated with antimicrobial agents not approved for this use in the United States.

The contaminants were the antimicrobials nitrofurman, malachite green, gentian violet and fluoroquinolone. Nitrofuran, malachite green and gentian violet have been shown to be carcinogenic with long-term exposure in lab animals. The use of fluoroquinolones in food animals may increase antibiotic resistance to this critically important class of antibiotics, FDA officials said.

Spokesmen for Ocean Beauty Seafoods and Trident Seafoods, two major Seattle based processors of wild Alaska seafood, noted in separate interviews that no matter where their companies process fish, the processing is done to the same strict quality control standards.

Trident spokesman John van Amerongen declined to state specifically what, if any, products his firm processed in China, but Tom Sunderland, marketing director for Ocean Beauty, confirmed that his company did some processing there. Sunderland noted that wherever Ocean Beauty processes seafood, Ocean Beauty employees are in supervisory positions.

“We’re aware that we can’t put our food safety in the hands of people other than ourselves,” he said.

Scott Blake of Copper River Seafoods, with offices in Anchorage and Cordova, said his firm also has its own observers supervising a relatively small amount of reprocessing done in China to assure that their product met the company’s standards.

Knapp said major food producers and buyers are all aware that they cannot afford to have people get sick or to have product go bad, so they institute internally the high standards for processing. Still there is a whole other layer of small-scale producers that cut corners, he said.

Sending raw fish to China for reprocessing is just another example of the phenomena of exporting reprocessing jobs by a number of industries, he said.

“It is good for the fishermen (or other producers of raw product, like timber owners) because it is the cheapest way to get the product processed,” he said. “But from the point of view of local communities in Alaska, it is definitely a mixed picture; you are definitely cutting into potential jobs here.

– Alaska Journal of Commerce