Period of transition for world tuna industry - After increasing for several months, most tuna prices softened suddenly at the end of August, although skipjack prices remained high at USD 1 400/tonne, compared with USD 900/tonne earlier this year. Further price declines are expected in the coming months. Markets are not very strong, which makes it difficult for canneries to pay the high raw material prices. The Japanese market for sashimi tuna was strong in summer, as few Japanese travelled overseas, leading to increased demand for restaurant quality sashimi domestically. Next year is expected to be a difficult one for the world tuna industry, with several new regulations coming into force in the key market.

Tuna prices softened surprisingly

Raw material markets for yellowfin and skipjack softened at the end of August; a surprising development considering the fishing bans on most of the Latin American tuna purse seiner fleet, the Fish Aggregating Device (FAD) fishing closure in the Western and Central Pacific and reduced fishing effort in the Indian Ocean.  The price of tuna  in  Bangkok  in  August  was  USD  1 400/tonne  for  4-7.5 lb skipjack.   September  prices  declined  to  USD  1 275/tonne.

In Ecuador the price remained stable at USD 1 500- USD 1 550/tonne for skipjack and USD 1 800/tonne for yellowfin.  Fishing in the Indian Ocean was good for the Spanish and French purse seiner fleets operating there.  The fishing operations of purse seiners in the Indian Ocean were some distance from Somalia so the threat of piracy was minimized. 

The price of skipjack in the Seychelles softened considerably during August from EUR 850/tonne to less than EUR 750/tonne.  This price reduction resulted in at least one carrier load of tuna from the Indian Ocean being sold on the Bangkok market. Another carrier load of Indian Ocean tuna was sold in Ecuador at over USD 1 500/tonne.

Fleets operating in the Western and Central Pacific had better than expected results from fishing on schools during the FAD closure. This unforeseen and significant increase in available supply, coupled with a sharp reduction in orders from the market and high raw material inventories, caused prices to drop.

Higher Japanese frozen tuna imports

The tuna fishing industry in Japan landed 7% less fish during the first half of the year compared with 2008, including catches from Japanese coastal waters and foreign fishing. Local catches of fresh yellowfin, albacore and skipjack increased and most of these entered the domestic sashimi market as cheaper alternatives to the high value bluefin and bigeye.

Japanese imports of frozen skipjack almost doubled during the first six months of the year. Supplies of imported albacore also rose by 65% during this period, contributing to a 4.5% rise in volume over total tuna imports during the corresponding period last year. In contrast, imports of sashimi grade tuna of all types except southern bluefin, were lower than last year’s.

Compared with June-July, tuna consumption in Japan improved in August, corresponding with the summer holiday season. Supplies of the red meat quality tuna were low due to reduced catches in the Indian Ocean and also from Japanese coastal waters. Recently red meat bigeye tuna has gained greater market acceptance. One of the main supply sources of this product is the Taiwanese PC long liner fishing fleet, fishing in the Indonesian EEZ.

However, as the number of Taiwanese PC fishing vessels will be reduced from 80 to 60 in these waters, supplies are expected to diminish. The new tax introduced by Indonesia on foreign fishing vessels will also increase costs to the Taiwanese PC fishing operations. In the price sensitive market, demand for fresh tuna in supermarkets is waning and is increasingly being replaced by cheaper frozen red meat saku (bigeye) in retail trade. 

The Obon week in mid August, one of Japan’s three major holiday seasons, is characterised by intensive domestic and international travelling. However, this year, overseas holiday trips were curtailed and many people opted for vacations within the country. This gave support to sales in the catering business, including restaurants and sushi outlets, which improved in August. Imports of fresh tuna also increased to supply the Obon festival sales. Tuna prices firmed despite the increase in supplies.

During the first half of 2009, imports of all categories of canned tuna into Japan declined by 6.7% in quantity and 15.2% in value against the same period of last year, totaling 15 700 tonnes worth USD 2.8 million. Imports from Thailand and Indonesia, the major suppliers to the Japanese canned tuna market, declined by 6.7% and 10.3% in volume and value respectively, while the Philippines was able to increase its exports slightly by 2.5% during the period under review. Imports of higher valued canned yellowfin tuna by Japan declined by 15.4% in quantity and 22.6% in value this year.

China joins the canned tuna market as well

China has emerged as another important Asian exporter of canned tuna joining Thailand, the Philippines and Indonesia. Its canned tuna exports have increased tremendously over the past few years reaching 35 329 tonnes worth USD 115.8 million in 2008, up 62.4% and 71.4% in quantity and value respectively over 2007.

Over half of China’s canned tuna export was shipped to Thailand last year, a five fold increase over the previous year. Declining exports to the USA and Japan were compensated for by the sharp increase in exports to other markets such as Italy, Israel and Egypt.

Thailand feels the competition by China as a canned tuna producer and exporter. In the first six months of the year, Thailand exported 232 000 tonnes of canned tuna, a 7% decline on last year’s figures.

While Thai exports to the USA, the main importer expanded by 10%, exports to other markets were weaker. Imports by the Near East market were considerably lower: Egypt (-35%), Saudi Arabia (-32%), and Libya (-14%), despite the efforts by the Thai industry to penetrating the Near Eastern market.

Canned tuna consumption in the USA improves

The average US canned tuna consumption increased slightly to 2.8 lbs/capita in 2008 from 2.7 lbs/capita in the previous year. Canned tuna remains the second most popular seafood in the USA after shrimp. In 2008, the total canned tuna supply to the US market was around 382 000 tonnes, up 4.5% against the previous year. Canned tuna imports contributed about 45% of the total supply while the rest came from US packers.

In the first half of 2009, canned tuna imports by the USA declined slightly (-2%) to 73 100 tonnes. Thailand managed to expand its presence, while other canned tuna producers concentrated on the EU market and reduced their sales to the USA. Tuna in pouches, which some years ago had been launched as a good alternative to canned products, is losing ground in the US market, where imports dropped by 3%.

Strong exports of canned tuna from the Philippines

Filipino canned and preserved tuna is continuing to make inroads in European markets, with half-year customs figures confirming the trend evident from last year. There was a 45% increase in exports from the Philippines in 2009 with a major increase in sales to Germany - up 36%.

Canned tuna buyers have gained by lower prices, with Thai products being particularly attractive, owing to the declining strength of the baht. Lower prices - down between 20% and 33% - benefited major importers in Italy and Spain.

Spanish canneries are moving to greater use of imported tuna loins, in order to reduce their domestic labour costs. Consequently, imports of frozen tuna loins expanded strongly in the first half of 2009, when 43 400 tonnes were imported, 63% more than in the same period of 2008.

Ecuador, where Spanish canners have invested recently, expanded its exports and now accounts for about one third of Spain’s total tuna loins imports. El Salvador is the next most important exporter, where the Calvo plant supplies its Galician plant with tuna loins. There is a risk, as already experienced in Italy, that with expanded use of frozen imported tuna loins, the current very high quality of Spanish canned tuna, might decline.

World tuna industry faces challenges in coming months

Monaco’s proposal to list Atlantic and Mediterranean bluefin on CITES Appendix 1, which is expected to be discussed at the CITES meeting (CoP15) in March 2010, has caused much concern to the Japanese tuna industry. If this species is listed by CITES, the price of bluefin is likely to increase drasticallly. Traditionally and historically, Japan has been the main market for bluefin, absorbing 80% of the global harvest.

Canned tuna companies, too, expect that a decision to list bluefin tuna would have repercussions on canned tuna consumption as well. The average consumer is not aware of the different tuna species, or of the situation regarding different stocks and action to preserve one species will be regarded as applicable to all.

The move by companies such as Bumble Bee, Chicken of the Sea and StarKist to join environmental groups such as the World Wildlife Fund (WWF) and the International Seafood Sustainability Foundation (ISSF) may have come too late. 

The companies that are part of the ISSF have resolved to maintain adequate traceability records to trace tuna products from capture to plate, including names and flags of catching vessels, species of tuna, type of gear used, weight of fish and dates on which each part of the process occurred. The reporting measures are designed to reduce the number of fishers and vessels that violate quotas or do not report their catch to regulators from shipping their products to world markets.

Spanish canneries’ owners are not part of the ISSF, and their reaction to this new entity is not very positive, as they had not been not sufficiently briefed on it by their US counterparts.

The implementation by the EU of measures to reduce Illegal, Unregulated and Unrecorded (IUU) fishing, by requiring a catch certification to accompany all fish imports, will have important consequences for the fish and tuna trade. This regulation will be put into practise on 1 January 2010, and many problems during the implementation process can be anticipated.