Overall supply from the Western Pacific has been disappointing, pushing tuna raw material prices higher. With fluctuations between USD 2 350 in October 2012 and USD 1 900 in January 2013, the frozen skipjack price for delivery to Thailand was back up to USD 2 300/tonne in late March, a clear indication that low supply is meeting good demand from Asian canners. In the Eastern Pacific, the two-month long fishing ban ended on 18 January and 46 tuna purse seiners were allowed to fish again in these regional waters. Current fishing remains good, especially off Peru and Ecuador. Skipjack prices are also stable at USD 2 200/tonne at Manta, Ecuador, but may increase by April.
Catches stable in Eastern Pacific
According to IATTC, 525 068 tonnes of tuna were caught in the Eastern Pacific up to 2 December 2012. Ecuador had the highest catches, accounting for 41%, followed by Mexico at 24%. Skipjack catches were stable compared with the previous year at 254 842 tonnes while yellowfin tuna catches declined by about 5 000 tonnes in 2012 to 200 367 tonnes. Bigeye tuna catches increased by more than 7 000 tonnes in the same period totalling 50 191 tonnes. Improved catches of yellowfin have been reported in the Indian Ocean, which has eased pressure on prices. Reportedly in March the ex-vessel prices in Seychelles softened to EUR 2 200/tonne (10kg and up). Compared with February, prices of skipjack have also declined to EUR 1 680, FOB Seychelles.
Yellowfin in Italy and Spain is being traded at EUR 2 600 in March, the same as the previous month, whereas skipjack prices have climbed back to EUR 1 800 CFR Spain. As of 6 March, 14 575 tonnes of cooked and frozen tuna loins have entered the EU under the 2013 zero duty quota of 22 000 tonnes. With patchy improvement in catches, fishing in the Atlantic Ocean has remained relatively poor despite the reopening of the ICCAT FAD Fishing Exclusion Zone on 28 February. Catches may improve further, while the March ex-vessel prices in Abidjan are firm at EUR 1 600 for skipjack and EUR 2 400/tonne for yellowfin.
Japanese imports of frozen bluefin fall steeply in 2012
The total import volume of fresh and frozen tuna into Japan last year was 247 160 tonnes, which was close to the volume imported in 2011 (246 889 tonnes). However, the recovery in imports of fresh bluefin and bigeye tuna is significant, whereas supplies of frozen northern bluefin were particularly low. The positive trend in the frozen tuna loin market continued with higher imports in 2012 compared with the previous years. Last year’s improved catches in the Western Indian Ocean (particularly by Taiwanese longliners) resulted in a 30% rise in frozen bigeye supplies (imports) compared with 2011, which pushed auction prices lower in the Japanese market. It was a good opportunity to increase sales volume at affordable prices. Imports of frozen bluefin were the lowest in the decade, with an 86% decline compared with 2011.
US demand for non-canned tuna increases in 2012
It is evident from import data that demand for non-canned tuna in the USA improved in 2012 compared with previous years. Imports of fresh/chilled dressed tuna and frozen loins were higher by 7.8% and 32% respectively, showing distinct consumer preference for the shelf-stable frozen tuna loins. US annual imports of frozen tuna loins for non-canned usage increased from 17 316 tonnes in 2011 to 22 837 tonnes in 2012; the leading suppliers were Indonesia, the Philippines and Viet Nam. The canning industries in the US also imported cooked loins, which brought the total volume of loin imports to 65 000 tonnes last year.
Frozen yellowfin tuna steaks and loins treated with carbon monoxide (CO) and sent to the US market could face a tariff charge, if the US Customs change the classification of treated tuna to a prepared or preserved product, Seafood.com reports. The US Customs and Border Protection (CBP) are looking at making the change nationwide, which would raise the tariff from virtually zero to 12.5%. US Customs have already implemented the change at one port, where an American importer, Sea Delight, received an invoice for duty owed. Currently, yellowfin tuna imports, both treated and untreated, are considered to be raw fish or fillets, which are duty free.
Higher raw material costs reflect in canned tuna prices
With the skipjack price expected stay above USD 2 000 for the rest of the year, many tuna packers have started adjusting their selling prices or reducing the product content to absorb increasing production costs. The largest canned tuna producer and exporter, Thai Union, has already announced that it will increase its canned tuna price slightly this year to offset the higher raw material prices, higher labour wages and the strengthening baht. Japan’s market leader, Hagoromo Foods, will raise the prices of its 165 gram canned tuna products by up to 6.1% from May this year while it will also reduce the content of its 80 gram canned tuna to 70 grams from June while maintaining the price. In France, Adepale, the country’s association of seafood processors, has urged retailers to push up lagging retail prices.
Canned tuna declines in popularity in the US
With canned tuna consumption declining in the US over the years, major suppliers have been facing challenges in finding a balance in pricing. Industry players estimated that American tuna consumption shrank by about 12% last year as a result of economic uncertainty, higher retail costs, overall consumer dissatisfaction with product quality and mercury related issues. The recent voluntary product recall by Bumble Bee and Chicken of the Sea because of packaging problems could further erode consumer confidence. The latest civil class action against Starkist filed in the federal court in California may also bring negative publicity to the industry. In the suit Starkist is accused of systematically under filling and selling short-weighted chunk light tuna in water based on “pressed tuna cake weight”, which is still the standard applied in the USA. For many years tuna packers, including Starkist, have requested the US authority to amend the canned tuna standard to “drained weight”, as is the case in Europe, Japan and elsewhere. However, the use of additives to increase the moisture content of tuna meat in the US complicates the issue.
The downward trend in the US canned tuna market is apparent in the declining imports, which dropped by 14.3% in volume in 2012. The import value (USD 761.3 million), however, went up by 5.8% as a result of increasing tuna prices worldwide. Imports of normally popular canned light meat tuna in brine went down sharply by 20.4% while imports of tuna in pouch dropped only slightly by 1.1%. Thailand remained the top supplier of canned and pouched tuna to the USA but it’s shipments to the market were down by almost 18% last year.
European importers look to ACP countries
The rising canned tuna price has prompted EU importers to look for cheaper alternatives, including products from ACP countries that have 0% import duty. As a result, there were sharp increases in supplies of canned tuna last year from countries such as Mauritius, Côte d’Ivoire and Papua New Guinea, while imports from Asia, particularly from Thailand and the Philippines, dropped significantly. In 2012, canned tuna supplies from Côte d’Ivoire to the EU increased by 31% while from Papua New Guinea they were up by 38.5%, which somewhat offset lower imports from Thailand (-44.3%) and the Philippines (-7.8%). Thus, the overall imports of canned and prepared/preserved tuna into the EU (HS 160414) in 2012 were only down by 3.5% in quantity, but the value went up by more than 14.4% over that of 2011, amounting to 447 579 tonnes valued at USD 2.47 billion.
Supplies from Africa, however, could be disrupted as the EU authorities have recently tightened up on shipments from West African countries that are suspected of engaging in illegal, unreported and unregulated (IUU) fishing. These measures could cause delays and rejections, driving buyers to seek other sources, unless a speedy solution is found. Côte d’Ivoire increased its shipments to France by almost 42% overtaking Spain as the number one supplier. Imports from Spain dropped by more than 36% last year. Seychelles also managed to send more (+23.3%) products to France while supply from Thailand was reduced by half.
UK, Germany imports of canned tuna fall in 2012
More canned tuna from African countries also reached the Italian market with supplies from Côte d’Ivoire and Seychelles going up by 35% and 14.5% respectively. Spain remained the number one supplier, but its shipments fell by 8.5% resulting in overall imports into Italy declining slightly by 2.5% in 2012. Germany bought more products from Papua New Guinea (+40.2%) but this still could not compensate for the sharp drop in supplies from Ecuador (-39%), Indonesia (-27.3%) and the Philippines (-9.7%); however, the latter retained its position as the top supplier to the market. Canned tuna imports into the UK also declined by 6.7% largely as a result of lower supply from Thailand (-46.6%), although more shipments were recorded from the Philippines (+12.7%), Mauritius (+2.6%) and Ghana (+2.0%).
Early this year the EU finally agreed to increase the annual import quota for pre-cooked tuna loins to 22 000 tonnes from 15 000 tonnes at zero duty for three years. European canners, mainly in Spain, quickly snapped almost all the allotted duty-free quota within the first quarter of the year, mainly from Thailand, Viet Nam, China, Indonesia and the Philippines. Last year Spain imported close to 57 000 tonnes of tuna loins, 16.8% less than the previous year, while Italy imported around 31 000 tonnes, down by 8.8% during the period under review.
Volume of Thai canned tuna exports decline by a fifth
Thai canned tuna exports also suffered major setbacks in other markets. Last year the country’s tuna exports dropped significantly by 20.5% in quantity over 2011. In value terms, however, the exports were only slightly lower by 1.5%. The US remained the largest buyer for Thai canned tuna but shipments to this market were down by more than 30% in 2012. Shipments to European destinations also posted negative growth except to Italy, which grew by 16.3%. Other destinations that showed positive export growths in volume were Libya (+167.5%), Papua New Guinea (76.8%), South Africa (23.6%) and Lebanon (+7.7%).
Stable demand for canned tuna expected in US, EU
This year the competition from fresh salmon in the Japanese sashimi market seems to be less pronounced because of lower salmon imports - a situation that favours fresh tuna sales. As for canned tuna, demand in the major markets, particularly the US and EU, will remain flat this year. As the skipjack raw material price is likely to stay at levels above USD 2 000/tonne, tuna packers are expected to make further price adjustments for their canned tuna products to absorb the increasing costs. Meanwhile more eco-labelled canned tuna sourced from pole and line fisheries and FAD free fishing are expected to become available in major supermarkets in Europe and North America in the coming months.