CRAB FLEET PINCHED AS RUSSIA FLOODS MARKET

Washington crabbers, already hurt by falling Alaska crab harvests, are being further wounded by competing Russian crab.

A wave of Russian King crab pouring into the all-important Japanese market is undercutting U.S. crab, driving down prices. Russian King crab has been selling at Costco for an unheard of $7.99 a pound, compared to the usual retail price of about $25 per pound.

"There is drastic decline in crab prices", — said Steve Hughes, president of Natural Resources Consults Inc. in Seattle, "The changes in supply and demand we've witnessed here are basically because of Russian crab products that are suddenly making a real impact on world crab market."

He estimates that average income per Washington fishing boat which at $1.6 million per boat in 1989 could drop to $500 000 this year.

Already the downward pressure on prices, and the short seasons for certain crab species, are forcing some skippers to re-flag their boats as Russian vessels to fish Russian waters or to branch out into other fisheries entirely.

The Washington fleet includes about 200 vessels.

"The economic impact are going to be pretty severe for a number of the boat owners", — said Arena Thomson, executive director of the Washington crab Coalition.

Thomson estimates revenue from the all-important Alaskan Opillo crab season which starts Jan.15, could be reduced by 30 percent this year because of the lower prices, Russian King crab are selling so cheaply that they're directly competing against Opillo ordinarily a less-expensive species.

"This year's Opillo season is going to be critical, about whether or not we stay in business", said Jake Jacobsen, manager of the Alaska Marketing Association, which negotiates prices for the local fleet.

Last year prices were kept high by a shortage, as supply of Opillo crab from the Bering Sea hit a near-historic low of 74 million pounds, down from 328.6 million pounds in 1991. This year the allowable catch could be even lower, with biologists releasing an initial allocation of 50 million pounds after testing the diminished Alaska crab population. Meanwhile, the Russian crab could force down prices from last year's high of $2.50 a pound to $1.50, or even lower.

Other factors in Japan are adding to the problem, said Scot Matulich, professor of agricultural economics of Washington State University.

The soft Japanese economy has reduced overall demand, which led buyers to place unusually large qualities of last season's crab in storage, keeping prices low. Meanwhile the Japanese yen has fallen back slightly from historic highs against the dollar, making the U.S. crab relatively more expensive, and making Japanese buyers less anxious to commit themselves to U.S. suppliers.

"A lot of people's lives are being ruined right now. Not by anybody making bad decisions, but by a lot of unfortunate circumstances," — said Matulich.

On the harvest side, the low Alaska crab catches are caused by illogical factors that are little understood. Crab population are more grone to dramatic cycles than are most other seafood species, and several crab species are now on the bottom of their cycles. The Bering Sea Alaskan King season has being closed for two years due to low crab counts, and will be closed again this year.

The low prices and volumes also are hurting local crab processors, which depend on Alaskan crabbers for their crab supplies. Terry Shaff, president of Redmond-based Unisea Inc., estimates that prices paid for crab on the fishing grounds will be down about 50 percent, as processors try to compete against the flood of processed Russian crab into the market.

Russian production of King crab has climbed from 6.6 million pounds in 1990 to an estimated 55.1 millions pounds in 1995, according to figures generated by the Alaska Market Association. Meanwhile Alaska King Crab production has dropped from 10.8 million pounds to 2.2 million pounds.

"There's so much Russian King hitting the market in Japan and here domestically, that it’s replacing the demand for Opillo and other King crab," Shaff said.

The gusher of Russian crab raises questions about how long the Russian crab stock can be fished at the current rate without being damaged. Since Russia entered the world market for fish products, the Russians have developed a reputation for unbridled resource exploitation.

"They're hungry. they need the cash. They see their fishery resources as a huge cash cow, " said Matulich, "I think it's likely they're placing excessive pressure on stocks."

In the longer run, conditions should improve for Washington crabbers as the crab return again during the next three or so years.