PETERSBURG - A Seattle-based company wants a state permit to bring up to eight Russian fish processors into Alaska waters this summer. U.S. processors, however, say the Russians could hurt an already struggling fishery.
Global Seafoods North America wants to buy as much as 50 million pounds of pink salmon from Southeast and Prince William Sound but will need a permit from Gov. Tony Knowles to do so.
If Knowles grants the permit, Global Seafoods President Oleg Nikitenko said as many as six processors would be positioned near fishing grounds in Southeast and two would go to Prince William Sound.
"Alaska can no longer rely on the North American market for its pink salmon. Those days are over and Alaska needs to open new markets," Nikitenko said. "If Alaska won't open the door to the new markets, then the business will die."
By bringing floating processors into Alaska waters, Global Seafoods avoids duty tax, which can increase the cost of the fish by 30 percent.
Nikitenko wants the pinks for the Russian market. The fish would be processed as whole frozen, whole gutless, and headless and gutless.
Global Seafoods plans to pay 7 cents per pound for pinks.
Last year pinks fetched 12 to 15 cents per pound at the dock and that price was considered low. But Nikitenko said Russian consumers cannot even afford to buy cheap farmed salmon, so the price of pinks needs to be low enough to make it affordable.
Nikitenko said Russian consumers do not want canned salmon because they do not like the taste and believe there is more value in a frozen fish.
"People are using the head and the tail for soups. If it's a whole round fish, every housewife will buy the whole round fish hoping to find eggs inside the fish, which is an extra bonus," he said.
Nikitenko knows paying 7 cents per pound is less than most fisherman want but he said he won't impose any trip limits, which means he'll buy as much as a fisherman can bring in.
He needs at least 300,000 pounds per processor per day to make it work. Nikitenko believes those without markets this summer may take advantage of his offer.
"Right now we have lots of phone calls from fishermen and people who call us that have no market for their pink salmon for this year and they're happy to work with us," he said.
Norquest Seafoods does not want the state to grant the permit. Company President Terry Gardiner said existing processors can handle the projected harvest for this summer.
He said there are no untapped markets for pink salmon and domestic processors can't compete with foreign boats that pay their crews low wages.
"The claim that they have a secret market for pink salmon, I believe, is totally bogus. One of the things that has reduced the value of canned and frozen pink salmon on the world market is the flood of cheap Russian pinks," Gardiner said.
With a bleak market outlook for pink salmon, Icicle Seafoods President Don Giles said bringing in foreign processors could be devastating to the industry.
"We can weather the storm as long as we don't have to compete with a bunch of foreign bottoms. And if we do, it's going to create a problem for those who don't think they have a problem right now," he said.
While some processors say they can handle the projected harvest for this season, at least two companies are expected to reduce their fleet for 2002. That leaves some Southeast permit holders without a market for their fish.
John Peckham, a board member of Southeast Seiners, said the Russian buyers may be a solution.
"As a fishermen, if you weigh everything out, it's hard to believe that supply and demand and competition for our fish isn't a good thing," he said.
State officials will assess whether there is room for another processor and if the company has sufficient financial resources.
Gov. Knowles makes the final decision on issuing the permit. Global Seafoods wants an answer by March 20 to get its processors ready.
Knowles' spokesman Bob King said the state has not received a formal permit request but is aware that it could be coming. The state already has begun a domestic processor survey to determine if there is a surplus of pink salmon.
Mark Schwan of the regional sport fish office said he didn't expect the Russians would take enough extra pinks to significantly affect sport anglers in Southeast Alaska.
"The sport fishery takes a very small number of pink salmon relative to the overall exploitation," he said.
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