Is A Middle East Tuna Boost On The Cards?

The USD 1 billion canned tuna market of the Middle East is said to be one of the few where demand for the fish is growing. Even though industry sources claim there is a high request for tuna from Arab consumers, financial troubles as well as plummeting oil prices in the last year have been holding the development of tuna back, according to an importer in the region. Now however, as both of these factors have shown signs of improvement, can we expect a flourishing tuna market in the Middle East soon?

Taking into account the vast size of the Middle East region – with a joint population of 423 million, as well as what seems to be an increasing appetite for tuna among inhabitants, several companies such as Mexican Grupomar and Filipino Alliance Select, among many other firms, have eyed this part of the world as a potential arena for growth. However, market entrance does not come without challenges, as importers’ purchasing power in Middle East nations has been held back due to financial struggles.

Countries in the Arab region such as Egypt, Syria and Libya have experienced times of conflict and war, which has heightened the need for food staples such as canned tuna, a basic product that requires little preparation and essentially has no use-by date. This makes the commodity a crucial addition to households when there is poor access to food aid. In 2016, the Middle East region received just under 150,000 tons of canned tuna from Thai processors, the number one suppliers.

Buyers in Egypt are the biggest canned tuna importers in the Middle East, which is not surprising when taking the country’s population of over 95 million into account; the most inhabitants in the region. Thai canners are the main suppliers of the commodity to the nation, and the Middle East as a whole, with only minimal volumes imported from processors elsewhere. In 2016, Egypt received just over 57,000 tons of the product from Thailand, 19 percent down YoY.

The favored canned tuna reference among Egyptians is flaked skipjack in oil, with this segment taking up around 68 percent of the market. This category has however been on the decline in recent times, with both solid pack and chunk products growing at a rapid pace.

In addition to Egyptians showing strong demand for canned tuna for their own consumption, the nation is also a transit location, meaning that tuna is received there and exported to other states in the Middle East.

The second biggest Middle East receiver is Saudi Arabia, with buyers in the nation purchasing 27,150 tons of canned tuna in 2016. Contrary to consumers in Egypt, Saudi Arabian shoppers favor solid skipjack in oil, although both flakes and chunks are becoming more sought-after variants.

Satisfying consumer demand for canned tuna has been a challenge for importers in the Arab region at times. Market conditions in early 2017 proved to be fragile, as a weaker global oil price took its toll on Middle East economies, hindering the purchasing power of buyers. Reports from 2017 indicated that Egyptian tuna trade in particular was struggling, as banks made it difficult to get hold of US dollars in the nation due to a currency devaluation. For nearly six months it was very hard to import tuna, and businesses practically abandoned the species for a while.

Due to a shortage of canned tuna volumes and higher prices as a consequence, Egyptian consumers replaced their consumption habits for the fish with cheese as a sandwich filler and locally produced vegetables at meal times.

In November 2017, the crude oil price reached one of its highest points of the year, with further rises expected by analysts, which could indicate that importers will be able to purchase higher volumes again, and be better able to satisfy the high demand among Arabs.

Arnab Sengupta, Trading Director at Gulf Food Industries, tells Atuna that “the government realized the importance of canned tuna as a protein for the poor people of Egypt,” and that it started to work to make imports of canned tuna easier. However, he emphasizes that the market is facing a challenging future due to price sensitivity and local devaluation.

Despite these challenges, he does state that there is still sufficient demand for the fish and the region is one of the few markets in the world where canned tuna is growing in popularity. Tuna is seen by Middle Eastern consumers as a good sandwich filler, as well as popular to use in pasta or salad dishes for lunch or dinner. The product only needs a few additions to become a main meal, and everyone has their special way of eating the fish, with family members customizing canned tuna to suit their taste preferences using simple ingredients.

Most consumers in the region buy canned tuna between one and three times a week. Customers consider it a valuable product and it has a high status in the region, as fresh fish is difficult to access.

Canned tuna in oil, with skipjack being the most popular species, is by far the most common form of the product in the region, but some high end restaurants in Dubai are selling tuna fresh. The frozen category is limited to niche sushi stores, and can also be found in markets closer to the coast such as Oman, Yemen and Iran. Sengupta explains however that the tuna catch there is seasonal and not consistent.

Recently some premium value added products, such as tuna salads from the Italian brand Rio Mare and tuna spreads from Thai Union-owned John West, have been introduced on supermarket shelves. These commodities have been growing in the Middle East, although value added is still a very niche market, he explains, as Arab consumers are highly concerned with familiarity and price.

He states that tuna does have the potential to see more growth, as it is a healthy food which appeals to the younger generation, adding that canned food is still seen as glamorous in the region. Access to fresh fish in many countries is poor, therefore canned tuna is a good fix, Sengupta explains.

When it comes to sustainability, he adds that consumers are not particularly concerned about the issue yet, despite somewhat of a push for more responsible tuna from Western expats. Although the subject is not of major interest for consumers just yet, it is starting to become more of an issue on a governmental level. “There are baby steps being taken and maybe we can see big change in the future.”

Some of the companies that have expressed their interest in expanding in the Middle East include the Filipino canned tuna leaders Century Pacific and Alliance Select, and the Mexican firm Grupomar. In the middle of 2017 Grupomar delivered its first canned tuna to Saudi Arabia through its subsidiary Marindustrias. If countries such as Mexico and the Philippines started exporting significant volumes to the region, this could have the potential to create a shift in the processors that dominate the market. More diversity among exporters can result in a wider spread, and not just Thai canners dominating, consequently increasing the competition in this regional market.

Different initiatives have been taken by companies in a bid to reach buyers in this major market. One of these is the introduction of a halal label on tuna cans. Halal means permitted in Arabic, and is used for food that is lawful to eat for those following the Muslim faith.

It has been an increasing trend for firms to decorate tuna products with such logos to improve their competitiveness by meeting demands from Muslim consumers. When it comes to tuna however, the fish is initially halal to begin with, making such a label redundant. The logos are more commonly used on meat products to show that the animal has been slaughtered in accordance with guidelines in the Quran, but can now also be seen on canned tuna from Alliance Select, and Grupomar’s Tuny brand.

The effort from tuna companies to reach Arab consumers is evident, and these firms might be able to increase their business, as it seems like the difficulties caused by a struggling economy and falling oil prices are dying down. The outlook at the moment is that the economies in the Middle East are recovering, and only time will tell if this will also mean higher interest from tuna buyers, and whether they will be able to fulfill the demand from consumers.