Spiked Oil-Price Cause Bankruptcies In Japan’s Deep-Sea Tuna Fishing Industryff

Oil-price spikes have forced fishing companies to go bankrupt in Kesennuma, one of Japan’s biggest bases for deep-sea longliners engaged in tuna fishing.

”Deep-sea fishing operations now only add to losses,” said Isato Sakuragi, adviser to a skipjack and tuna fisheries cooperative for northern Miyagi Prefecture, including Kesennuma.

The oil-price spikes have boosted annual fuel costs for a deep-sea longliner by some 50 percent from 40 million yen two years ago.

Even without higher oil prices, business conditions have worsened for Japan's deep-sea tuna fishing.

Over the past decade, tuna catches by deep-sea longliners have declined. Furthermore, prices in Japan have slackened due to massive imports of frozen and cultivated tuna.
 

In Kesennuma, a base for deep-sea tuna fishing since the 1970s, the northern Miyagi cooperative had until last year boasted of the largest number of fishing boats among such cooperatives in Japan.

Since December, however, five companies have gone bankrupt, leading the cooperative to lose the top position to the Kagoshima Prefecture cooperative. The northern Miyagi cooperative now has 48 boats owned by 15 companies.
 

An employee at one of the failed companies said his firm had stepped up cost-saving efforts in order to survive. “But the fuel-price increases dealt a final blow to the company,” he said.
 

The planned reorganization of the Federation of Japan Skipjack and Tuna Fisheries Cooperatives may make the situation even worse.

Later this year, the federation’s 15 regional cooperatives, including the northern Miyagi group, will be regrouped to dispose of non-performing loans and end financing services.

These cooperatives have effectively guaranteed loans given to their member firms by Norinchukin Bank, a central financial institution for agricultural, forestry and fishery cooperative systems.

The elimination of such financing services would deal a severe blow to their member companies.

The situation is severe not only for Kesennuma but also for other Japanese deep-sea tuna fishing bases, such as those in Kagoshima, Shizuoka and Kochi prefectures.

“Chain bankruptcies could come at tuna-fishing bases in Japan,” a fishing industry source said.
 

“Private companies alone cannot overcome fuel-price spikes,” said Sakuragi of the northern Miyagi cooperative. “If things are left unchanged, Japan may see deep-sea tuna fishing operations disappearing.”