Opinion Page
TUNA - GLOBALLY UNBALANCED SUPPLY
Too much skipjack at the wrong production location, and a shortage in supply where the raw fish is needed urgently badly.This seems to be the current state of global skipjack tuna supply situation. Talking to fisherman in the Atlantic Ocean and the especially the Indian Ocean, the skipjack catch seems to be very low in these catching areas, and one trader even described it as being disastrous. Canneries in the Seychelles, Madagascar, and Mauritius seem to have increasing problems in obtaining enough raw material to meet their commitments, which has already resulted in increase in prices of skipjack in the Indian Ocean. Contracted shipments of skipjack to the Thai industry cannot be met. The news being that prices around USd 850 Fob Seychelles have been paid, confirms this situation. Reports from Ecuador are not much different, fisherman say they have been catching approx. 100.000 M?t of tuna ( mostly skipjack) less this year up-to-date compared to last year. This means a dramatic decrease. Ecuador has turned into an importer of frozen raw tuna from the Western Pacific Ocean. The Ecuadorian situation has already lead to problems for the French and Spanish canners, who have been relying increasingly on imported frozen tuna loins from South America. With the summer production on its way in Spain and France, the problems could increase the coming month.
Based on the above the only conclusion could be that there is a currently a shortage of skipjack around the globe, and prices should be expected to go up. The contrary is true at the moment. Indeed fisherman from Taiwan, Korea, USA and Philippines have been reporting disappointing catches in the Western Pacific.Also fisherman in the WPO decided to reduce their catching to maintain the balance between supply and demand.
But demand for frozen skipjack from Bangkok has been very disappointing. Caused by very slow sales by the Thai canned tuna industry during the last 2-3 months, packers have little need for frozen fish. Although supply from the Western Pacific has been reduced, still the amount of tuna coming into Bangkok or in carriers afloat, is exceeding the local demand. Canned tuna buyers in major markets USA and Europe are suffering of a lack of confidence, and are just holding back their buying decisions till the very last moment. Hardly any orders are being booked at this very moment, because of fear of a possible price decline.
Too many buyers seem to be fully concentrated on a possible price decline is Bangkok, while most other supply countries, including Philippines, are experiencing a drop in supply. There could be the possibility that the unbalance in the supply of frozen skipjack to Bangkok could cause a very short lived drop in raw materials but this will not mean that the current canned tuna prices will fall significantly. It is expected that such a temporary drop in prices by max. 10% could immediately spur demand from the USA and Europe, which would then immediately push up prices again. Once prices will rebound the global shortage in skipjack can cause prices to go to levels close to USd 1000. Because these are the prices many fisherman in the Eastern Pacific and the Indian Ocean will start demanding from canners, in order to compensate them for the high costs. With 1000 M/T-up purse seiners coming into port after a 4-5 week trip with only 300-400 M?t on board, cost prices per ton are shooting up, making fisherman ask for more.
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