The report analyses the market situation during the first quarter 2017.

Since December last year, frozen skipjack price remained at a four-year high, at US$1 600/tonne for delivery to Thailand. Nonetheless, imports of processed and canned tuna increased in the US and EU markets during the first quarter of 2017. However, demand has started to taper off in Asia and the Middle East.

Supply

This year, tuna catches have been persistently poor in the Western and Central Pacific. To supplement supply, several carriers from the Indian Ocean have delivered fish to Bangkok canners. By mid-July, skipjack prices surged to almost US$2 000/tonnes.

The catch rate has slowed down also in the Eastern Pacific, where skipjack prices are rising following the price trend in Bangkok. Raw material inventories have been good at canneries in Ecuador where tuna processors are enjoying brisk demand in the EU markets due to the duty-free status.

In the Indian Ocean, tuna catches are moderate, and local canneries are holding healthy stocks of raw material. Tuna prices, however, continue to increase due to good demand from Thailand.

Fishing in the Atlantic Ocean is rated moderate to low due to the bad weather condition; demand for raw material at the local canneries is strong. Due to the worldwide supply shortfall, prices for skipjack and yellowfin are rising strongly for European packers.

During 2017, imports of raw material into Thailand, the world's largest tuna canning base, were lower than the other years.

Thai imports of frozen skipjack during the first quarter of the year usually average around 120 000 to 130 000 tonnes. But in January-March 2017, imports dropped to 97 000 tonnes as a result of inadequate raw material inventories at packers level, rising tuna prices and slow demand for canned tuna from export markets during this period.

Japanese tuna landings during the first quarter of 2017 also declined by 5 percent due to lower catches of skipjack and bigeye tuna from distant-water fishing. However, local landings of bigeye, yellowfin and albacore improved and entered the domestic fresh sashimi and sushi trade.

Fresh and frozen tuna market (non-canned)

United States of America

The US non-canned tuna market remains stable for dressed tuna and tuna fillet. US imports of non-canned tuna totalled 13 400 tonnes during the first quarter of 2017 against 12 900 tonnes imports during the corresponding period in 2016.

From January to March 2017, imports of fresh/chilled tuna (whole/dressed) totalled 5 600 tonnes, which is similar to the quantity imported last year during the same period; supplies of fresh/chilled yellowfin tuna increased from Brazil, Maldives and Fiji.

Interestingly, demand for frozen fillets increased, registering a 6.8 percent rise in imports at 7 800 tonnes against 7 300 tonnes imported during the corresponding period in 2016. At 7 100 tonnes of imports, the higher value fillet and stakes have had the largest share (83 percent) under the non-canned category; Indonesia and Viet Nam were the top two suppliers. Compared with last year, frozen fillet supplies from Indonesia increased by 50 percent, to 2 400 tonnes.

Japan

Japan's self-sufficiency in fresh tuna supply has improved in recent years with increased catches from domestic waters, whereas imports have weakened. There were notable declines in Japanese imports of air-flown tuna included farmed bluefin from Australia and the Mediterranean; imports of fresh bigeye and yellowfin frozen tuna also declined during the review period.

In reality, consumer demand for raw tuna in the world's largest sashimi market has become highly season, specifically due festivals such as the spring festivals (April-May) and year-end celebrations in December. Due to this consumption pattern, import demand has been shifting more towards deep frozen tuna loins, which have a much longer storage life than chilled tuna.

Following this trend, imports of frozen tuna loins, mostly consisting of sashimi-grade products, increased by 21 percent during January-March this year, to 15 000 tonnes; in which 8 800 tonnes were bluefin (+28 percent), 3 100 tonnes, yellowfin (+27 percent) and 2 400 tonnes, bigeye tuna (-10 percent). Consumption of these products was high during the April and May spring festival seasons.

Canned tuna market

Exports: There was a shift in the global ranking in canned tuna exports during the first quarter of 2017. While Thailand and Ecuador remained the top two exporters of processed and canned tuna, Spain lost its third position to the Philippines, and China ranked fifth.

Volume exports from Thailand declined by 12.5 percent due to shortfalls in export to North America markets and also to the Middle East. However, there was an almost 15 percent increase in exports from Ecuador supported by the duty-free access to the EU markets; Ecuador also exported more to Argentina (+38 percent) and Chile (+20 percent) from January to March 2017, against the same period in 2016.

The 185 percent rise in Philippine's canned tuna exports during the review period could be attributed to its first time export to Cyprus as the top market and increased exports to the other EU markets. There were increased exports to the Gulf Cooperation Council (GCC) markets from the Philippines during the first quarter of 2017, compared with the same period last year. The 8 percent rise in Spanish processed tuna exports could be linked with increased sales of cooked tuna loins to Italy (+ 7 percent), France (+6 percent) and Portugal (+10 percent); Spanish exports of finished products to Germany, Netherlands and Algeria, declined, however, but exports increased to the United Kingdom (+21 percent) and Belgium (17 percent).

Processed and canned tuna exports from China declined by 22 percent during the review period. Exports from Mauritius, the largest producer in the Indian Ocean region, also declined, by 11 percent.

Imports: International market prices for processed tuna have substantially firmed up in the import market during 2017. However, during the first quarter of 2017, this has had little impact on EU and US imports.

In the EU, imports of processed/canned tuna increased in Spain, Italy and France because these markets bought more cooked loins to take advantage of the 25 000 annual import quota at a lower tariff on semi-processed imported raw material. The duty-free access of Ecuadorean processed tuna in the EU is another important factor behind the 10.2 percent rise in EU canned tuna imports during the review period. Imports of canned tuna in the United Kingdom and Germany were lower than last year's.

North and South America

US importers rushed to fill the annual import quota that entails a 6.5 import tariff against the full tariff of 12 percent that normally applies. Overall imports of processed tuna including cooked loins increased by 5 percent in quantity, at 44 160 tonnes, and by 8.6 percent in value, at US$191.8 million during the first quarter of the year against the same period last year indicating price rises. Nearly 70 percent of these imports consisted of canned and pouched tuna for direct consumption (30 760 tonnes); the balance was cooked loins (13 450 tonnes) for re-processing.

There was a considerable growth in imports of whitemeat albacore products, which showed a 63 percent rise at 6 900 tonnes against the 11 percent rise in imports of lightmeat tuna (skipjack and yellowfin, which were 23 800 tonnes) during the first quarter of 2017. Also, US imports of tuna in oil have showed positive trends in recent years compared to the conventional canned tuna in brine. Imports of cooked loins for reprocessing declined by 18 percent during the review period.

In Canada, the falling import trend observed during 2016 (-3 percent) persisted in 2017 with a 5 percent decrease in canned tuna imports from major sources during January-March 2017. However, Thailand managed to increase exports to this market marginally (+ 1 percent) and remained the top supplier in the market.

In Latin America, canned tuna imports increased in Argentina (+3 percent), Chile (+33 percent) and Mexico (+13 percent) according to regional and Asian sources.

European Union

The rising raw material prices have had a lesser impact on the EU's canned tuna imports during the quarter of 2017, which could be attributed to the duty-free status of Ecuadorean products in the EU market. Unlike in previous years, imports of processed/canned tuna imports in the EU increased by 10.2 percent, at 136 600 tonnes during January-March 2017, compared with the same period in 2016. The top five suppliers were Ecuador, Mauritius, Seychelles, Thailand and the Philippines. Supply from Ecuador increased by 23 percent and from the four suppliers by 7-8 percent during the review period.

Nearly 55 percent of canned/pouched tuna imports in the EU were for direct consumption, where large markets are the United Kingdom and Germany. Imports declined in both the markets by 3.7 and 10.5 percent, respectively. In contrast, the Netherlands (from where products are distributed to the other markets in the EU, particularly to the Eastern bloc) imported 47 percent more than in the same period last year; supplies increased by 12 percent from Ecuador.

EU imports of cooked loins during the review period totalled 61 400 tonnes), mainly procured by Spain, France, Italy and Portugal, had a 45 percent share in total processed tuna imports. Spain was the largest importer (54 percent) of cooked loins in the EU.

In Eastern Europe, canned tuna imports in Poland fell marginally (-0.1 percent) but increased in Czech Republic (+14 percent), Romania (+43 percent) and Serbia (+48 percent).

There was a 33 percent decline in market Russian imports of canned tuna, which could be the result of price increase.

Asia/Pacific

Higher tuna prices also affected East Asian markets during the first quarter of this year. Canned tuna imports declined in Japan and Southeast Asian markets where imports fell by 20-30 percent during the review period. It has been reported that Japanese tuna canners have slowed down local production because of high raw material prices.

However, the Australian market has bounced back by a 23 percent rise in imports during January-March 2017 against the same period in 2016, in favour of Thai exports of high value products.