Japan's crisis could strain California's economy

The Sacramento BeeMarch 15, 2011 

First Egypt. Then Libya.

And now Japan.

From a spike in oil prices to a possible disruption in trade routes, international turmoil could put a dent in an economic recovery that's finally gathering speed in California and across the country.

A new downturn is unlikely, economists said Monday. One expert said the biggest peril to California is the state's budget mess, not international crises.

But anxiety about Japan, coupled with unrest in the Middle East, have hurt the stock market and made analysts nervous. Economists said the still-fragile recovery could be vulnerable to these outside shocks.

Japan is California's third-largest market for exported goods of all kinds – about $1 billion worth in January.

It buys roughly a quarter of the state's rice crop, much of it grown in the Sacramento Valley. It buys millions of pounds of California almonds.

"We're talking about a major customer of ours taking a big punch," said Jock O'Connell, a Sacramento international trade consultant.

Exporters are in a wait-and-see mode.

"The infrastructure has been disrupted," said Susan Brauner, spokeswoman for Sacramento's Blue Diamond Growers almond processor. "I don't know how that's going to affect our products, our shipments."

Tim Johnson of the California Rice Commission said he isn't yet aware of any delays. Approximately 400,000 tons of "sticky" rice is shipped annually from the ports of West Sacramento, Stockton and Oakland, with Japan the No. 1 destination.

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