Merchandise exports from Hawaii fall for second year in row

Foreigners’ appetite for Hawaii coffee, shrimp and macadamia nuts boosted exports of those products in 2013, although overall exports from the state shrank for the second consecutive year, according to a new report from the U.S. Commerce Department.

Hawaii’s merchandise exports totaled $598 million last year, down 18 percent from $731 million in 2012. That followed a 17 percent decline in exports in 2012 from 2011, the Commerce Department reported.

Hawaii was among 24 states that experienced a decline in merchandise exports last year, according to the Commerce Department. There were 26 states that boosted exports, including 16 states that saw exports reached record highs.

Hawaii’s top locally sourced export, bottled water, generated $23 million in sales overseas, down 4 percent from $24 million in 2012. Foreign demand for locally produced bottled water has been tapering off since 2007 when exports reached a record $41.2 million, fueled by strong sales of desalinated deep-sea water to Japan.

Koyo USA, one of the state’s biggest deep-sea water producers, still produces from 1.3 million to 1.5 million bottles a month of the product at its plant at the Natural Energy Laboratory of Hawaii campus at Keahole Point on the Kona Coast.

About 98 percent of the water produced by Koyo is shipped to its parent company in Japan, said plant manager Larry Visocky. Koyo also distributes the water, sold under the Mahalo brand, in the Asian markets of Singapore, Korea and Taiwan. In the U.S., Koyo is cleared to sell the bottled water in Hawaii, California and Nevada. It is becoming certified to sell the water in New York, which would be a steppingstone to other East Coast states, Visocky said.

"Our production has been fairly stable over the past three years," Visocky said, adding the plant has the capacity to ramp up production if demand increases from some of the new markets the company is entering.

Koyo, which has been operating at the Kona technology park for nine years, employs 23 people at the facility.

The biggest increase for any locally sourced product was in exports of fresh shrimp and prawns, which rose to $18 million in 2013 from $10 million in 2012, an increase of 80 percent. Coffee exports increased by 40 percent to $14 million, while exports of nuts and seeds, which includes macadamia nuts, rose by 33 percent to $4 million. Exports of papayas were flat at $9 million.

Aircraft and parts were Hawaii’s largest category of exports, totaling $154 million last year. However, that figure can be misleading because most of the aircraft and parts are counted simply because they pass through customs in Hawaii on their way from the mainland to Asia, said John Holman, director of the Commerce Department’s Commercial Service office in Honolulu.

Hawaii’s total of $598 million in exports last year was the lowest of any state by far. The next-lowest state was Wyoming, with $1.3 billion in exports.

Hawaii’s low ranking is largely due to the state’s high shipping costs, which affect both the import of raw materials and export of finished goods," Holman said.

He also said that Hawaii would likely rank higher if services were added in with the merchandise exports. The billions of dollars spent by foreign tourists on food and lodging is considered a service export and does not show up in the merchandise trade figures, he said.

Data compiled by the Commerce Department’s International Trade Division show that 880 companies exported from Hawaii in 2011, nearly 90 percent of which were small and medium-size businesses. The small and medium-size businesses accounted for 48 percent of all of the state’s exports in 2011.

Hawaii’s largest export market last year was Australia, which received $113 million of Hawaii’s export total. Singapore was Hawaii’s second-largest export market at $103 million. That was about three times the previous year’s total of $35 million to Singapore.

China was Hawaii’s third-largest export market at $89 million. Japan, which was the second-largest export market in 2012, slipped to fourth place in 2013 at $86 million.