Often canned tuna buyers, and especially those on the end of the distribution chain, tend to under-estimate the impact of the raw material prices on the sales price of the finished canned product. With tuna prices being at extremely low levels for about a year now, and prices having declined slowly but continuously for about two years, buyers have been leaning backwards and taking a wait-n-see position. They lost most of their interest in tuna, and have become accustomed to being laid back, the market being favorable to them month after month.
Times might be changing, when indeed prices will hold at a level close to USd 500. Buyers have got to sit up again, and start taking an active approach to this tuna market. With catches reduced in almost all major areas due to either less effort, or less fish caught at the fishing grounds, prices might just continue to rise, although slowly but gradually.
For canned tuna packers the recent trend change has led them to
raise their prices almost instantly. They have to !! The last two years they had to lower
their prices almost daily, taking often heavy losses on their inventory of frozen
skipjack. For many canners 2000 has been a disaster year, after a lousy 1999. With prices
moving up, their is finally a positive change, and some spark of light in the darkness.
Packers can perhaps make some money on their inventory now, and they will be very likely
to do so.
This week we have seen offers for retail packs and catering packs rise by almost 7%-10%,
and this might be only the beginning. On the chart at the bottom of this page, you will
find prices most of us have not seen for at least a year. But they might there be soon
again !! With fisherman getting more organized in trying to get their act together, they
might manage to stop the over-supply situation. If so, prices might not take long to
reach a level around USd 700 p.M/T, where some of the major fleets have their cost-price
for a ton of skipjack.
An increase to USd 700 would mean in case of Foodservice tuna, that prices would move from USd 13,50 CFR to USd 21,10 CFR per case ! A 56% increase, and then we are only talking of a situation with prices still being at a low level.
With the likelihood that the influence of El Nino will surface again towards the end of 2001, it would not be unrealistic at all that 2001 will show us a rapid rise in canned tuna prices especially in the latter part of the year. The "New" tuna prices which might shock end buyers, who will have a hard time believing, and coping with, prices that can move $ 1,00 per case in a weeks time. Let's see what happens.
