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GLOBEFISH - Information and Analysis on World Fish Trade

Tuna - April 2010

01/04/2010

Tuna prices were lower in 2009 - Tuna prices were on average USD 550/tonnes lower in the course of 2009, compared with 2008. This was because of lower fuel prices, which in turn led to higher catches. As a result of reduced raw material prices, canning became more profitable again, after a difficult 2008. Traders were able to lower prices, which led to good demand in the market, during a challenging year with regard to consumer preferences. Consumption of canned tuna in all markets increased during the year. The performance of the sashimi sector, on the contrary, was characterized by lower restaurant trade, resulting in a very depressed market for top quality sashimi tuna. In the USA, fresh sashimi consumption declined sharply. In Japan, the purchase of sashimi tuna moved from restaurants to supermarkets, where lower-end products were sold. As a result, farmed bluefin tuna from Australia, Mexico and from the Mediterranean found a good market in Japan.

Atlantic bluefin tuna will not be listed on CITES appendices

The decision of CITES member countries not to list Atlantic bluefin tuna on any Appendices will have an important impact on the tuna market, especially on the sashimi market in Japan. The listing would have led to considerable disruption of the market, while the present situation will allow bluefin to enter the market as before. Currently about 40 000 tonnes of Atlantic bluefin tuna are caught every year, well above the recommended quota that scientists say can be fished to avoid population collapse. 

Lower prices in first quarter

Good January and first half February catches in the Indian Ocean and in the Western and Central Pacific combined with full cold storages in Thailand pushed the price of skipjack in Bangkok down from USD 1 100/tonne to USD 900/tonne. This downward trend is influencing the European market as well, even though demand from canneries in Europe should increase in coming months.

On the other side of the Pacific the price softened to about USD 1 150/tonne, down from USD 1 200/tonne for main size skipjack.  This premium of about USD 250/tonne diverted European orders for tuna products from Ecuador to Thailand and the Philippines. 

Strong sashimi tuna market in opening months of the year

Japanese tuna catches in 2009 declined further, in line with the trend observed for several years now. Some 345 000 tonnes were landed last year, 9% less than in 2008. Skipjack is still the main species caught by Japanese vessels with 245 000 tonnes, but catches in 2009 declined sharply, especially for fresh skipjack. Yellowfin was the only species reported to have higher landings.

Imports of frozen tuna into Japan increased in 2009 by 9% compared with 2008. Bigeye was the main species imported. Skipjack imports were strong and increased by 20 000 tonnes, substituting for minor domestic production. Prices in the Japanese market were relatively low during the course of the year, reflecting reduced demand from the top range restaurants. This trend was completely reversed in the opening months of 2010.

Demand for sashimi tuna was strong in Japan during the first quarter of 2010, and prices moved up. There were several reasons for the good demand: the relative strength of the YEN, the recovery of the economy, the hope for good spring weather providing many occasions for sashimi consumption, and finally, the elimination of the worry that a CITES listing could disrupt supplies to the market. In expectation of the worst case scenario, traders had built up stocks, but it is likely that prices will start to go down now as the threat of a CITES listing has been removed.

Reportedly farmed bluefin tuna in Japan, including full lifecycle breeding, has shown steady growth. The annual production in 2009 was 7 000 tonnes against 5 000 tonnes in 2008. The local tuna farming industry is taking serious measures to increase production as supplies from imported sources will be much lower in future. Even though these figures are still low, when considering the total Japanese demand for bluefin tuna, they are still very encouraging and the presence of Japanese cultured tuna on the market will gain in importance in the near future.

Dull tuna market in the USA

The US market for tuna was relatively dull in 2009. The high range sashimi and sushi bar market came to a complete standstill as a result of the economic crisis, though canned tuna remained popular for the preparation of economical dishes for home consumption. This is changing now, as the restaurant segment reports improved sales figures, and the spring weather leads to more eating out, including in expensive restaurants. Imports of all tuna types were stable in 2009, with the exception of fresh tuna. These figures reflect the overall climate of the market.

Though exports of canned tuna to the US market grew significantly, Thailand’s overall canned tuna export in 2009 was lower compared with 2008. Thai canned tuna exports totalled 485 400 tonnes worth USD 1.53 billion in 2009, down 4.1% in quantity and 19.3% in value against the previous year.

Thai exports hit by crisis

Sharp drops in exports to Australia (-17% in quantity), the UAE (-38%), Saudi Arabia (-14%) and Germany (-47%) contributed to the overall decline in 2009. Meanwhile, exports to the USA, the largest market, increased significantly last year by 19% in quantity, but 2% lower in value amounting to 112 700 tonnes worth USD 360 million. The UK, France, Egypt and Canada also imported more canned tuna from Thailand last year compared with 2008. Overall, the Thai canned tuna industry performance was mixed, and was heavily influenced by increasing raw material prices in the middle of the year. As prices are much lower now, the competitiveness of the Thai tuna canning industry will improve this year. 

EU market mixed

Spain is increasing not only the import of tuna loins for its canning industry, but also of canned tuna. The canning industry of Galicia has huge problems to make ends meet, and is trying to diversify its raw material sourcing. Italy, which used to be independent with regard of canned tuna production, has to import ever increasing quantities of canned tuna. This is mainly sourced in neighbouring countries such as Spain and France, but more recently also in Colombia and the Seychelles. Saupiquet, a major French trade mark, announced the closure of one of its tuna plants in France. Again the survival of the European tuna canning industry is jeopardized by high labour costs in these countries.

The EU market for Thai canned tuna was mixed, while the German market contracted, the UK and France expanded quite strongly. Price considerations are always the driving force for German purchases. As prices are dropping in 2010, more buying interest from this market is likely. The tariff is still high for Thai canned tuna in the European market at 20.5%, which does not encourage trade.

The EU’s new Illegal, Unregulated and Unreported (IUU) fishing regulation came into effect for fish caught from 1 January 2010.  Industry has been waiting for news of enforcement action and possible impacts on the market from this new regulation, but up to now there have been no incidents of fish being rejected by the EU resulting from catch documentation irregularities.  The EU IUU regulation is likely to impact small scale tuna fisheries, which are very difficult to certify and control, and steps may need to be taken to address this issue.

In this regard, there is an interesting initiative that certifies small scale tuna from the Philippines. The EU imported the first-ever Philippino consignment of handline-caught tuna with catch certificates in the first week of February 2010. The shipment contained fresh and chilled loined tuna caught in Mindoro and included catch certificates ensuring the fish’s traceability along with verification that they came from registered boats running in legalized areas using highly selective fishing equipment. Approved by the EU in January 2010, the traceability system was developed by the Bureau of Fisheries and Aquatic Resources (BFAR). The traceable tuna from Mindoro came about through a partnership between the WWF, local government and the private sector. The alliance was formed in response to certification required by the EU to address the IUU fishing problem, as well as to satisfy growing demand for seafood products from sustainably managed sources.

Prices expected to increase

The downward trend in prices is expected to be reversed soon, and packers wanting to replenish raw material stocks are facing potentially higher tuna prices as recent changes in fishing conditions in the Western and Central Pacific have resulted in reduced catches.  These lower landings have been attributed to the closure of two major high seas pockets, according to some reports.

In the Japanese market, where traders had filled their cold storages in expectation of Atlantic bluefin trade restrictions, prices are likely to move down, in contrast to canning raw material prices. However, demand in Japan is expected to stay strong during the spring holidays, which will help traders to clear some of their inventories.

In the USA, the expected economic up-turn will result in a return to high end restaurants, including sashimi and sushi outlets. Demand and, therefore, imports of fresh tuna, which suffered in 2009, are likely to increase. The EU market for canned tuna was well supplied in the opening months of the year, where advantage of lower prices on the market was taken, in expectation of lower availability later on.

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