Reaching the second highest level yet, in 2007 Alaska’s export industries turned in another banner year. Driven largely by the continuing global boom in commodity prices, a weak dollar, and strong demand from China, Alaska’s overseas exports totaled $3.9 billion, just shy of matching the all-time record of $4 billion achieved in 2006.
Japan, long the state’s largest trading partner, maintained that position in 2007, however exports to the country, at $854 million, were down approximately 21% from the previous year. As Japan has labored through more than a decade of economic difficulties, Alaska’s exports to that country have declined and last year was no exception. Even so, in 2007 Japan accounted for 22% of the state’s overseas exports.
Offsetting the loss of exports to Japan has been the record-setting growth in exports to China. The growth and modernization of the Chinese economy is playing an increasingly important role in the value received and the volumes produced by Alaskan exporters. For the first time in Alaska’s history, China has become the state’s second largest export market, a position held for decades by Korea. In 2007, shipments to the Middle Kingdom reached a record $716 million, up 51% from the previous year. Seafood and minerals are the primary exports to China, the state’s fastest growing major market.
Korea was the state’s third largest market in 2007. Dropping 3% from the previous year, exports reached $702 million in 2007. This amount represents 18% of the state’s exports. As with China, in recent years, growth in business with Korea has helped to cushion the decline in exports to Japan, enabling the state’s overall export levels to expand. Korea imports a variety of Alaskan commodities including seafood, minerals, fertilizers and forest products.
Alaska’s next-door neighbor, Canada, was the state’s fourth largest market last year with shipments amounting to $460 million, making up 12% of the state’s total exports. Minerals accounted for nearly 70% of the exports, followed by seafood and refined fuel products. Canada is not only a major customer of Alaskan exports but is also a significant investor in natural resource developments. In addition, Canadian firms have traditionally led all others in mineral exploration expenditures in the state.
Germany finished the year in the fifth spot among the state’s trading partners. At $202 million, the country accounted for 5% of Alaska’s export, ranking it as the state’s number one European destination. Seafood is the largest export category to Germany, followed by minerals.
Rounding out the top ten export markets for Alaska in 2007 are Spain, Switzerland, Netherlands, Finland and Mexico.
Seafood has been and remains the state’s top export commodity. In 2007, the value of the state’s seafood exports totaled $1.9 billion, down just slightly from the previous year’s record milestone of $2 billion. This represented 51% of the state’s total exports.
The value of minerals, the state’s second largest export commodity, grew again in 2007 to $1.2 billion, up 8.5% from the previous year. Mineral exports accounted for 30% of the state’s export total and consist primarily of zinc and lead from the Red Dog Mine in Northwest Alaska near Kotzebue. Relatively strong prices for zinc, while down from a year ago, have helped to sustain the high level of mineral export values over the past several years, as has the historically high prices received for lead.
At $232 million, energy (coal, liquid natural gas and refined fuel products) was the third major export category, followed by precious metals. Buoyed primarily by higher prices, gold and silver exports reached $132 million in 2007, up from $110 million the previous year. The other two major export categories suffered declines in 2007. Fertilizer shipments from the Agrium plant dropped to $92 million, down 44% from 2006. During the year, the plant was not operating at full capacity and announced its plan to shut down operations. Forest product exports also declined in 2007, to $86 million.
Looking forward, Alaska’s export industries have a bright future. Asia is the world’s fastest growing region and this is where we find many of Alaska’s major trading partners. Global demand, led by rapidly developing nations like China and India, is creating long-term opportunities for our resource driven economy. High commodity prices are stimulating significant analysis of some major new development projects in the state. And, around the world, there is growing recognition of the healthy characteristics and sustainability of Alaska’s wild caught seafood products.
Alaska is fortunate to be at the right place, at the right time, with the right commodities — the building blocks of economic development – for export.
Greg Wolf is the Executive Director of the World Trade Center Alaska
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