Men in rubber boots are swinging axes in the ice mist of the Tsukiji fish market. Frozen tuna slide across the warehouse floor, white slabs...
Men in rubber boots are swinging axes in the ice mist of the Tsukiji fish market. Frozen tuna slide across the warehouse floor, white slabs looking nothing like the delicate red flesh that will be sliced and rolled onto pretty plates in the sushi bars of Moscow, Berlin and Los Angeles.
Thwacks and clatter echo through the 5:30 a.m. auction on the Tokyo waterfront. It is the moment when the tuna harvest meets the calculations of international financial markets.
Much of the world sleeps when prices are set on a fish that has become as precious to the sushi business as gasoline is to drivers.
The men cutting fins and tails are connected to something every bit as tumultuous as the seas: the U.S. dollar.
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The greenback was a reliable symbol for decades. But its dramatic decline during the past five years is creating a world of winners and losers in the callous math of commerce, where the cost of a fish dangling from a hook in Asia is one man’s profit and another’s misfortune.
The dollar’s fate affects the lives of billions of people: fishermen and seafood buyers, wheat farmers, black-market money changers and poor women.
Beginning before dawn in Tokyo one Monday in mid-June, the Los Angeles Times followed the dollar around the globe until the sun set in the West.
The low dollar keeps Japanese seafood buyers happy. It encourages New England fishermen to sell stocks of coveted Atlantic bluefin tuna in Japan, where they can be paid in more valuable yen.
This is spurring Kazuaki Shimura, a deputy general manager for Daito Gyorui, one of Tsukiji’s powerful trading houses, to take advantage of the U.S. currency to offset high oil prices and shrinking fish stocks. His company will send buyers to Boston this year to guarantee the inventory.
“If the Americans get a good catch, we’ll go in August,” Shimura says, leaning back in his chair as company accountants tally the day’s take. “We have to seize the opportunity while the dollar is still down.”
Similar strategies are devised countless times a day. Scribbled into ledgers, typed into computers, flashed onto tote boards, the dollar’s travails are an enduring, unpredictable narrative.
Some curse the U.S. currency, others revel in the rewards that its shrinking stature offers. Yet they are all connected to the world’s most recognizable symbol: George Washington’s face on a swatch of green.
Manufacturers in China
YIWU, China — In a region that manufactures Christmas for much of the world, Du Xiufeng is not a jolly man.
He once made $62,000 selling 120,000 snowman stockings to Wal-Mart. Much has changed in the two years since. Du, who has become as thin as his wallet, can’t even turn a penny profit on such orders anymore.
The dollar has fallen so fast against the yuan in recent months that Du winces at the currency updates arriving on his cellphone.
In October, he won an order to make 150,000 travel blankets for Target. Du calculated that after production costs he’d earn a nickel profit on each.
But the adjusted exchange rate wiped out the entire $7,500 he hoped to pocket.
“Di, di, di” — down, down, down, he says in his warehouse in Yiwu, a city in eastern China’s Zhejiang province. “Every falling cent is like cutting flesh from me.”
Hundreds of factories here, many of them no more than home workshops, make Santa hats, Christmas tree ornaments and other holiday decorations. The owners and seamstresses are battered by market whims.
Beijing has allowed the dollar to fall 14 percent against the yuan since 2006, which has forced some factories to close and others to fire workers. Du has let half his 120 employees go while contending with surging oil prices and the escalating cost of materials.
He used to take Sundays off, visiting teahouses and driving with his wife and 6-year-old daughter in their BMW sport-utility vehicle. No more.
Now it’s 11-hour shifts, seven days a week.
“The pressure’s getting bigger and bigger,” Du says, moments after his cellphone announced the dollar had fallen another notch. “It’s cruel, isn’t it?”
Programmers in India
NOIDA, India — Smoking a pipe in an inner sanctum reached through two electronically locked doors, Asoke K. Laha heads an army of software engineers whose ingenuity knows no national boundaries.
Eyes fixed on hundreds of glowing computer screens, they write the programs that help companies such as Universal Studios and Amtrak keep their operations running smoothly.
The growing U.S. reliance on such small to medium-size IT companies propels India’s booming economy.
Laha’s company, Interra Information Technologies, has grown from a few rooms in his New Delhi home to two floors of an office building in an industrial park in Noida, a burgeoning satellite city.
With 90 percent of its business from American clients, Interra earns nearly all its money in dollars. Yet the company’s rent, salaries and transportation costs are in Indian rupees.
“For my business, the dollar has a serious impact,” says Laha, who jets between India and Interra’s U.S. headquarters in San Jose, Calif.
The dollar’s plunge halved Laha’s profit and forced him to lay off 20 employees.
“If there is another 15 percent drop, lots of companies will die,” Laha says. “You have to wait for the storm and hope for the best.”
Oil riggers in Russia
KOGALYM, Russia — Thousands of miles from the Indian heat, workers shiver in near-freezing temperatures in the oil fields of Siberia.
Ravil Mukhamedzyanov earns $1,500 a month pumping oil for the Lukoil West-Siberia company. He lives in one of those company neighborhoods that dress up the fact that he’s in the middle of nowhere in a town, Kogalym. Mukhamedzyanov is troubled by the bumps and blips befalling the dollar.
“I don’t know exactly how that affects me, but I have a gut feeling that it does,” he says. “And I don’t like it.”
The dollar — oh, that fabulous flash of green: Locked in safes, slipped under pillows, hidden in socks, it was the symbol of stability for Russians immediately after the Cold War.
“In the ’90s, the dollar in the minds of our people replaced the symbols of communism,” Alexei Kanayev says, leaning against his new Chevy Captiva in a garage with a big dollar sign painted inside the door in the town of Russkinskiye.
“People believed in it more than in the past Soviet symbols.”
It wasn’t that long ago that the oil workers and the fur trappers here thought the greenback might replace the inflation-prone ruble. Not so.
Powered by Russian oil, the ruble is gaining these days and the dollar is faltering. The markets are reconfiguring the comforting notions of the past.
“The price of gasoline is so steep that you now have to think twice before making a 60-kilometer [37-mile] ride,” says Kanayev, a mechanic for an oil company. “Other prices have gone up too, and all because of the weak dollar. The dollar betrayed us.”
Pensioners in Egypt
CAIRO — The woman in the black abaya walks through broken sunlight in a market, balancing a plastic bag of tomatoes in one hand while the fingers of the other ripple over onions, green beans, carrots, nuts and white eggplants.
Layla Youssef is stingy with her Egyptian pounds. She has to be. She and her husband live on a 700-pound monthly pension, or $127.
Inflation is crippling her country, and because the pound is pegged to the weak U.S. dollar, the burden grows heavier as the cost of imports rises.
The market’s shoppers are shoulder-to-shoulder, bickering over the math of survival and how a kilo (2.2 pounds) of potatoes once sold for 9 cents but now sells for 32 cents, or how chicken went from $1.31 to $5.62.
“We stopped eating fruit to save money,” Youssef says. “We stopped doing laundry every day and only do it twice a week. Thank God, though, we have it better than others. There are people who can’t afford bread. We have not reached the point of eating chicken skeletons like many people do.”
HARARE, Zimbabwe — Roland is not dead, though some wish for his demise. He’s a Zimbabwean profiteer, a billionaire in his nation’s nearly worthless money, a man who above all loves the greenback.
He had a steady job as a payroll administrator, but he gave it up to trade currency on the black market in this capital.
It works like this: Simply by holding on to dollars for a day, you watch the exchange rates change — once in the morning, once in the afternoon, once in the evening and bingo, the dollar has appreciated and you’re $50 billion richer. Zimbabwean dollars, that is.
On this day it takes 5.5 billion Zimbabwean dollars to equal one U.S. dollar, but still that means Roland has cleared about nine U.S. dollars.
“If you put your money in U.S. dollars, it will appreciate in value,” Roland says, his eyes peeled for cops. “In a week, if the week is good, without any raids, you can make up to $100.”
The Zimbabwe dollar is so listless that even the diminishing U.S. dollar has swagger here.
Businessmen have been drawn to it since the collapse of commercial farming in 2000.
Landlords and traders have started demanding rent or payments for large items like cars or land in U.S. dollars.
Importers in France
CHERBOURG, France — Umbrellas blossom inside Jean-Pierre Yvon’s factory: steel gray, midnight blue, lilac. They are slender, elegant, destined for Cartier and Van Cleef & Arpels. But not so many are shipped to the United States these days, not while the dollar shrivels against the euro.
Yvon’s U.S. distributor promised orders worth $310,000 more than a year ago. None came through. His umbrellas have gone the way of Champagne and European vacations — at more than $200, too expensive for American pocketbooks.
Yvon once had a big overseas market: 60 percent of the 3,000 umbrellas assembled annually by his workers. But exports have fallen to one-third.
“An umbrella is not just designed to be useful,” says Yvon, who, inspired by the Catherine Deneuve film “The Umbrellas of Cherbourg,” opened his factory 22 years ago in the same town. “It has to be beautiful, aesthetic and harmonious, an accessory that must last a lifetime.”
NEW YORK — The Italian millionaire is on his way, and Anne Marie Moriarty paces in her cubicle high above Madison Avenue. Beyond her floats the Manhattan skyline, so beautifully, so wonderfully for sale.
Americans may be in a subprime crisis, but those with euro bank accounts are shopping for big-game real estate.
This is good for Moriarty, a vice president with Corcoran realty company. In the past 18 months, her sales to international clients have doubled.
She keeps an Italian-speaking lawyer on retainer. The majority of her customers are either Italian or Irish, nationalities that arrived here poor and hungry more than a century ago.
“A lot of them come with empty suitcases,” says Moriarty, noting that European clients often organize their apartment hunting around high-end shopping expeditions.
One client, Stefano, recently spent $12 million on four apartments in an unfinished building across the street from the hotel. His family paid $5 million more on two other apartments — one in Soho and one in Chelsea.
With the euro so strong against the dollar, the Italians consider it a good business opportunity to buy “something like super-luxe,” Stefano says.
Foreigners have bought two-thirds of the apartments in the building.
The weak dollar, Moriarty says, is “good for my business.”
BENNETT, Colo. — If another inch of rain falls and the Colorado hailstorms keep their distance, the wheat in Kent Kalcevic’s fields will soon be ready for harvest. If all goes according to plan, Kalcevic may get a record price of more than $9 a bushel.
“I like seeing a weak dollar,” he says, sitting in an air-conditioned office on his 90,000-acre farm.
The dollar’s drop means American exports, such as corn and winter wheat, are coveted by international customers with more purchasing power.
The wheat harvested here ends up in Papa John’s pizza dough or gets loaded onto rail cars and, depending on the deal, can be shipped to Japan, Mexico, South Korea, Nigeria.
The profits from foreign sales have helped Kalcevic buy two new combines at about $220,000 apiece, as well as two sprayers at $240,000 apiece.
Restaurateurs in L.A.
LOS ANGELES — The day is nearly finished. The sky is turning from blue to pink to orange, slipping into gray. Shig Chiba, quick as ever with his knife, slices fish and garlic in the sushi restaurant that bears his name.
Much of the seafood glistening beneath his blade — scallops, sea bream, mackerel, squid, yellowtail — is shipped from the Tsukiji market in Tokyo. There’s a symmetry to that.
Chiba is from Japan himself, a man who, like the fish, traveled across the ocean to a restaurant of white tablecloths.
The auction men who hours earlier set prices at Tsukiji affect what fish are cut and rolled with Chiba’s ginger and green onions. Since the dollar began its precipitous tumble against the Japanese yen and other currencies, the price he pays has risen more than 30 percent.
Toro, the highly prized fatty tuna, costs $60 a pound, up from $38 a year ago. But the price of albacore, supplied from California and Canadian waters, has been stable — only about $6.75 a pound.
Chiba breaks even at best on toro and other expensive fish, and tries to make up for that with higher profit margins on albacore.
That math brings sleepless nights. He’s decided against trimming his staff of eight sushi chefs and kitchen workers. Instead, he increased his prices about 10 percent and carries lower inventories of fish, steamed towels and other products.
Life has hardened. The world is smaller, more connected, more expensive than four decades ago when Chiba’s father set foot in America and opened a restaurant in Los Angeles with a dream and hard-earned dollars.
Times staff writer Fleishman in Cairo wrote this article with files from staff writers Bruce Wallace in Tokyo; Don Lee in Yiwu, China; Henry Chu in Noida, India; Sergei L. Loiko in Kogalym, Russia; Noha El-Hennawy in Cairo; Achrene Sicakyuz in Cherbourg, France; Geraldine Baum in Paris; Louise Roug in New York; Deedee Correll in Bennett, Colo.; and Teresa Watanabe in Los Angeles.