KESENNUMA, Miyagi Pref. – Spikes in crude oil prices have forced several fishing companies here to go bankrupt, one of Japan’s biggest bases for deep-sea long-liners engaged in tuna fishing.
“Deep-sea fishing operations now only add to our losses,” said Isato Sakuragi, adviser to a Kesennuma-based skipjack and tuna fisheries cooperative for the northern area of Miyagi Prefecture. His cooperative has 15 members for a combined fleet of 48 deep-sea tuna long-liners.
For the deep-sea vessels, which ply distant waters, rising fuel costs are a serious issue. The surge in oil prices have boosted annual fuel costs for a deep-sea long-liner by some 50 percent from 40 million yen two years ago to about 60 million yen to 65 million yen, erasing the profits made on their catches, industry officials say.
Even without the higher oil prices, business conditions have worsened for Japan’s deep-sea tuna fishing.
Over the past decade, tuna catches by deep-sea long-liners have declined. Furthermore, prices in Japan have gone down due to massive imports of frozen and cultivated tuna as the world’s fishing firms set their eyes on the huge Japan market.
In Kesennuma, a base for deep-sea tuna fishing since the 1970s, the northern Miyagi cooperative had until last year boasted the largest number of fishing boats among such cooperatives in Japan. In 1992, its fleet totaled 134 vessels.
Since December, however, five companies have gone bankrupt, leading the cooperative to lose the No. 1 position to a cooperative in Kagoshima Prefecture.
An employee at one of the failed companies said his firm had stepped up cost-saving measures, including increasing the percentage of foreign crewmen to the maximum legal limit. “But the fuel-price increases dealt the final blow,” 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 nonperforming 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.
“There could be an avalanche of bankruptcies at tuna-fishing bases in Japan,” one fishing industry source said.