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Friday, November 18, 2016

Agriculture is Driving a Port of Oakland Export Rally

By Mark Edward Nero

Growth in high-value agricultural shipments is driving a containerized export boom at the Port of Oakland, according to new data the port released this week.

The data shows sizable increases in fruit, nut and meat exports destined primarily for Asia. The agricultural surge has lifted Oakland total export volume 10 percent over 2015 levels through October.

“We’re seeing a favorable confluence of events,” said the port’s Manager of Business Development and International Marketing, Beth Frisher. “Demand for high-quality US agricultural commodities is growing and producers here have been able to respond thanks to good harvests and higher yields.”

Agricultural exports have increased 16 percent in the past year, the port said. Farm products now account for 40 percent of Oakland’s 2016 total exports, up from 38 percent last year.

The port said much of the increase comes from a 30 percent rise in shipments of edible fruits and nuts; Oakland exported the equivalent of 65,600 20-foot containers full of those products through September, up from 50,306 containers a year ago.

Additionally, grain and seed shipments increased 35 percent in that period, the port said, while meat exports climbed 15 percent. The port said its top five export destinations are China, Japan, South Korea, Hong Kong and Taiwan, and its top five export commodities have been wood pulp, fruits and nuts, beverages and spirits, meats and cereals.

“California agricultural exports have exceeded expectations so far in 2016 and in no small part due to Oakland’s performance,” said Dr. Walter Kemmsies, Managing Director, Economist and Chief Strategist for the US Ports, Airports and Global Infrastructure Group at commercial real estate and investment management firm JLL. “While US agricultural exports have declined in 2016, Oakland has registered an increase.”

Kemmsies said exports are stronger than expected due to tighter stocks in Asia and higher production in the US He added that improvement has occurred despite the relatively high foreign exchange value of the dollar. Kemmsies also said that the 2017 export outlook looks more positive due to improving global economic conditions.

“Regardless of other factors, Oakland looks poised to outperform again,” he said.

Exports make up 52 percent of Oakland’s total laden container volume, while imports account for the other 48 percent.