The first quarter total of exports through the Bay Area’s maritime ports jumped 32 percent over the same period last year. This is on top of a 19 percent growth in the last quarter of last year.
More specifically, the Port of Oakland maritime exports increased by 11 percent in the first quarter this year.
So while the national economy as a whole is suffering from a trade deficit, and the United States is buying more goods abroad than it is selling, the Bay Area’s first-quarter exports by sea diminished this region’s trade deficit by 6 percent to a two-year low of $5.6 billion, according to the Bay Area World Trade Center.
“West Coast ports are all seeing the trend of exports rising,” said Gay Joseph, maritime general manager at the Port of Oakland, “especially the port of Oakland, which has always been a predominantly export port.”
The growth in exports through the area’s maritime gateway has been most obvious in agricultural products. Products grown throughout the Delta and the Central Valley are transported by truck or train to the Port of Oakland, from which they are shipped to Asia or the South Pacific. So, many farmers and food producers are seeing gains from their foreign sales.
Wine headed for Asia from California vineyards has received a real break from the weakening greenback. Even though China slaps huge tariffs on imports, two local wineries say they have been well-rewarded in sending their product to that country.
Walnut Creek-based Kevin Sherwood, founder of Diablo Dragon Winery in Lodi, just started exporting to China a year ago, with his company has been sending one 40-foot container there a month.
Despite the fact that the weak dollar has quadrupled his transportation costs, Sherwood said, the new currency reality “has been good for us.”
Sherwood would not quantify how much he is benefiting from his trade with China since the dollar has gone soft, but he did say that sending a container to China a year ago used to cost him $2,000. Today it costs $8,000, because the weaker dollar has inflated fuel costs.
He is also positioning his company to gain from the growing appreciation of Western food in China. He has set up a refrigeration logistics company in Shanghai to help funnel agricultural products from California.
Craig Watts, founder of Watts Winery in Lockeford, said his exports to China have increased 30 percent in the last year.
“The falling dollar is enhancing the entire wine market, because it is cutting out competition from Argentina and Chile,” Watts said. “In a recession, the guys that do better are farmers, because we are competing in the world market.”
California Rice Commission reports that the state’s rice is exported all over the world and what is exported to Asia goes through the Port of Oakland. Many factors affect the price of rice, including trade agreements, noted Tim Johnson, president and chief executive officer.
And while the weakening dollar has increased the price of rice in certain sectors, this profit is merely covering the increased production costs many farmers are facing.
Exports by air, however, are essentially flat, according to the Bay Area World Trade Center.
It’s not just vino, rice or apples helping the trade deficit. As the U.S. currency softens against the currencies of its trading partners, consumer demand slows as well, which also props up the region’s trade deficit, said John Haviland, principal and founder of Beacon economics.