Bangkok tuna prices start leveling off as WCPO fishery restarts

by TunaPacific Republishing | 9 October 2018 | News

Skipjack tuna caught in a purse-seine net. Photo: Undercurrent News.

Republished from Undercurrent News, 9 October 2018

After a few consecutive months of increases coinciding with the western central Pacific Ocean (WCPO) ban on fish aggregating devices (FADs), skipjack tuna prices for delivery in Bangkok, Thailand, have started “leveling off”, industry sources told Undercurrent News.

As fishing with FADs restarts in the WCPO, prices might even fall further, according to sources. The FAD ban, established by the Western and Central Pacific Fisheries Commission, runs from July 1 for three months for the majority of the fishing fleet in the WCPO. It will remain in place for some countries in the region also during October.

“My impression is that the skipjack market in Thailand is starting to level off now. Western Pacific fish is selling at around $1,650 per metric ton still, with Indian Ocean fish fetching up to $1,700/t CFR,” one US-based trader told Undercurrent.

“This is a normal differential between the two sources due to the EU or ACP [African, Caribbean or Pacific] credentials of the Indian Ocean fish as well as reputedly slightly better yields claimed by some canners over Western Pacific fish,” he added.

“Bangkok [skipjack prices] increased to $1,700/t during the last days of September; at the beginning of October, however, there has been a slightly declining trade,” a second source at a European fishing firm told Undercurrent, pointing to prices in the range of $1,660-1,670/t.

Skipjack raw material prices 2011-2018. Credit: Thai Union Group

Thai Union Group indicated skipjack tuna raw material in September averaged $1,650/t (see graph above).

“Boats in the WCPO are fishing back on FADs, so catching generally should improve, and I think a number of canners are tempted to back off buying aggressively to see if the market will stabilize and perhaps even fall off from its current level,” the first source added.

“There are some in Asia that foresee a rapid drop in price, but that’s not evident today. If that does happen, we will be back in a pattern of wild price swings yet again, which serves very little purpose and makes fishermen, canners and finished goods buyers’ lives more difficult,” he also said.

Meanwhile, a source in Ecuador pointed out that about half of the local fleet, which is the largest in the region, stayed in port during the 72-day “veda” fishing ban effective from July 29. Catches are going well and prices also, he also noted, pointing to skipjack prices at about $100/t above Bangkok level, which Undercurrent indicated at $1,650/t.

FAO: Global trade in the first quarter of 2018

Global imports of canned tuna were below last year’s in most leading markets during the first quarter of 2018, with the exception of the US, according to a new report produced by the Food and Agriculture Organization (FAO) of the United Nations. Demand improved since April/May, FAO said in the report, which analyzed global tuna trade in the first quarter of 2018.

International trade of canned tuna remained weak worldwide during the first quarter of 2018, according to FAO. Consumer demand remained low and many markets were holding sufficient stocks imported last year.

Following a weaker demand, particularly for conventional canned tuna in brine or in oil, in most of the markets, exports declined from the top two suppliers — Thailand and Ecuador — during the first three months of 2018, FAO said.

The increased exports from Indonesia during the reporting period was a result of higher exports of cooked loins to Thailand, the US, and Italy and also higher exports of canned tuna to North America, Europe and Middle East markets. Exports of cooked loins increased from Indonesia and China to Thailand and Europe, FAO said.

The US and Japanese markets registered positive import growth for the first quarter of 2018, compared with the same period a year ago, according to FAO analysis.

Improved consumer demand for higher value canned tuna seemed to be the supporting factor in the US. The lull in the substantial Middle Eastern market persisted, particularly in the large market of Egypt where demand recovery has been slow, indicating the availability of good stocks. Imports from Southeast Asia increased marginally in Saudi Arabia, Jordan and Yemen during the review period. There were higher imports in many East Asian markets, FAO also pointed out.

At the beginning of 2018, one of the top three US canned tuna brands introduced a new range of gourmet tuna products (ready to eat yellowfin tuna slices) suitable for delis and restaurants. In May, at the Infofish Tuna 2018, leading US marketers reaffirmed the positive demand trend for similar types of processed higher value tuna with convenient packaging (in pouch or ready to eat kits) among the middle and higher income younger population group in North American markets emphasizing that “currently they are the smallest but the fastest growing household consumers in the US”, FAO said. The import increase of higher value canned albacore and tuna in pouch in the US during the review period is a reflection of this development, FAO also said.

There was no improvement in the Canadian canned tuna trade, where imports declined by 27% during the first half of 2018 compared to the same period in 2017, with falling exports from the top suppliers, namely Thailand, the Philippines, Italy, and Vietnam, but increased from Indonesia.

In Latin America, demand for canned tuna increased during the first quarter of 2018. There were two-digit import growths in Colombia, Argentina, Mexico, Brazil and Uruguay during the review period.

Canned tuna imports into the EU remained weak during the first quarter of 2018, as the market had unsold stocks from last year’s imports, FAO said. Another reason for the drop in supplies was the high raw material price in 2018. Imports of both canned tuna and cooked loins declined by 9% during this period compared with the same period in 2017. Cooked loins represented 30%, 52,000t of the total processed tuna imports in the EU28, according to FAO.

The EU28 canned tuna market was largely supplied by external sources, which accounted for 73% of supply, or 127,800t.

Ecuadorean supply was down 17.6% to 26,100t, China up 62% to 16,500t, the Philippines up 10% to 12,700t, Mauritius down 21% to 10,500t and Indonesia up 67% to 9,100t.

There were higher imports of canned tuna by Russia, which rose 8% to 762t.

Although Japanese imports of fresh and frozen seafood were 6% lower in the first quarter of 2018 than a year ago, consumer demand for canned tuna continued to rise during this period, with imports up by 1.7% to 13,800t. Thailand, the leading supplier to Japan, managed to hold its position with a marginal increase in supply, while China and Vietnam increased exports by 70% and 30% respectively.

Australia is traditionally a market for high value canned tuna but, during the first three months of 2018, imports from the main supplier Thailand dropped by 24% to 9,600t. In contrast, imports of cheaper product (canned tuna in brine and others) increased from Indonesia (+26%, 1,500t) and from Vietnam (+175%, 80t). Overall, canned tuna imports in Australia declined by 19% during the review period, according to FAO.

Imports have increased also in Malaysia, China, Hong Kong, and South Korea during the first three months of 2018, compared with the same period a year ago. In an effort to capture the high-end seafood market in east Asia, tuna packers in the Philippines launched higher value canned tuna (yellowfin tuna chunks in lemon and pepper, in herb and garlic, in mild Indian curry, packed in 90g cans). Reportedly, the products launched early this year were met with positive consumer acceptance in Southeast Asian markets.

This year’s introduction of value-added tuna products in the US and Southeast Asian markets is expected to induce consumer demand for processed tuna, particularly in Asian markets, FAO said.

The US market for non-canned tuna products continues to show strong demand, particularly for the frozen category. Market penetration for tasteless smoke and carbon monoxide treaded products has increased in retail and restaurant chain outlets, with rising prices in recent years, FAO said.

During the first three months of 2018, US imports of frozen fillet steaks increased by 13% to 8,100t, in comparison with imports during the same period in 2017. A large share of these imports consisted of treated products in general. The main suppliers were Indonesia, Vietnam, the Philippines and Thailand FAO said.

Meanwhile, demand for sashimi tuna in Japan was high during the Spring festival celebrations in April and May 2018, but slowed down afterward. Imports of both fresh and frozen tuna were negative during the first quarter of 2018. Throughout the peak consumption season of April and May, the market sourced more local fresh tuna, supported by the Japanese government’s policy to increase self-sufficiency in food fish supply, FAO said.