Tuna Market Intelligence - Issue 49
The end of the year was marked by a boost to tuna prices, with prices rising up to $1570 mt and even $1600 mt an increase of about $100 from the previous month.
The boost came as many pundits had predicted an end of year price drop as the Fish Aggregating Device (FAD) closure in the Western and Central Pacific ended and supply was predicted to increase. Instead it became more a seller’s market, with insiders reporting the Parties to Nauru Agreement (PNA) Vessel Day Scheme which increased the cost of access to PNA waters, had meant fishing was down by an estimated 50-60% in the last quarter of 2016. Whether the upward price trend continues remains to be seen, but with reduced supply likely to continue from the Pacific and other waters this could be the case.
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Fishing shifts in 2016
The PNA Secretariat reported fishing across the PNA countries for 2016 with patterns of fishing changing at key times during the year.
Fishing patterns trends throughout the year started off with relatively heavy fishing in the west particularly around the Solomon Islands but then then for most of the year, fishing effort was highest around Kiribati and Marshall Islands.
In the second half of the year, fishing also spread west to the FSM and PNG where the effort was concentrated.
Kiribati to export sustainable yellowfin tuna this month
Kiribati’s partially state-owned fisheries company Kiribati Fish, which is controlled by Shanghai Fisheries General Corporation (Group), announced late last year it will supply fish certified as sustainable by the Marine Stewardship Council (MSC).
Under the partnership with Pacifical, which markets MSC tuna caught in PNA waters, Kiribati Fish is expected to process MSC-certified yellowfin tuna steaks and loins bound for the EU and US. The supply begins this month.
Kiribati Fish has already spent around $10 million in its processing factory in Tarawa, said Xue Jun Du, managing director.
Kiribati Fish was formed in 2010 as a partnership between the government of Kiribati (40%), Golden Ocean Fish of Fiji (40%), and Shanghai Fisheries. Golden Ocean Fish is also owned by Shanghai Fisheries, meaning the Chinese firm controls 60% of Kiribati Fish.
Tuna transshipment slowed in December
Twenty one purse seiners transshipped tuna in Majuro lagoon during December — lower than the monthly average, which reflects both the time of year and location of tuna schools, according to fisheries observers.
As it has developed in the past several years into the world's busiest tuna transshipment port, Majuro has averaged over 50 transshipments per month. The Marshall Islands Marine Resources Authority reports that 13 carrier vessels and 25 purse seiners were in port during December, with 21 of them engaging in transshipment.
The number of transshipments is lower than in other months of 2016 and could reflect shifts in the location of tuna schools that have moved farther west as the El Nino weather condition has subsided and water temperatures are changing.
PNG turns focus inwards, away from Philippines
With the Pacific Marine Industrial Zone (PMIZ) likely to start this year in Papua New Guinea, the national government has indicated it wants the Philippines out so it can focus on local development.
The first cannery in the Zone is scheduled to open in April this year but details remain sketchy on how the Zone development will proceed. At the end of 2016, Richard Maru, Minister of Trade, Commerce and Industry said he was concerned about the dominance of Philippines in harvesting tuna despite the lack of investment in processing. He said despite Philippine companies being granted access based on commitments to process tuna locally currently 70% of the tuna caught by these companies was taken back to Philippines for processing. Maru said: “As soon as we start the Marine Park, we are going to change the policy so no one will be allowed to take our fish out of the country.”
FAD rules clarified after Tuna Commission
A few weeks after the Western and Central Pacific Fisheries Commission annual meeting in Fiji, the head-scratching continued over the application of the rules, with Japan writing to the WCPFC for clarification about FADs.
Paragraph 18 of the Conservation and Management Measure lumped together rules for 2015 and 2016 with the new rules of a prohibition of setting on FADs for the high seas. When questioned by Japan the WCPFC Secretariat responded the new rules for 2017 are:
* the 4-month FAD closure or alternative FAD set limit • the prohibition on setting on FADs on the high seas, with the exemptions as described in footnote 5, as amended at WCPFC13,
*and the exception for those Kiribati flagged vessels fishing in the adjacent high seas.
US price fixing investigation continues
In the US, price fixing was in the spotlight again as the joint criminal antitrust investigation by the Department of Justice and Federal Bureau of Investigation continues.
In December, Walter Scott Cameron, Senior Vice President of Sales at BumbleBee pleaded guilty to a charge of fixing prices of packaged seafood from 2011-2013. Their lawyer said he agreed to pay fines and the company was hopeful a settlement would be agreed early this year between the company and the government. The charge was the first to be filed under the ongoing investigation.
Starkist and Chicken of the Sea are also under pressure with over 50 pending lawsuits accusing them and BumbleBee of price fixing activities.
UK fish supply and export questioned
Meanwhile, across the pond in the United Kingdom, the House of Lords and media were talking about the challenges posed to UK fish exports and imports because of Brexit.
The weakened UK pound meant that prices of tuna imports has increased, while it is unclear whether the duty free arrangements the UK has for fish with some countries under the EU will continue. Locally caught mackerel is the only fish the UK exports to the EU. Local supermarkets are reliant on imported fish such as tuna to stock their shelves.
Industry groups were vocal about the need for the UK government to act on fish exports and imports as part of the Brexit strategy.
MSC tuna catches expected to double in 2017
PNA had an optimistic start to 2017, saying that they expected catches of tuna certified as sustainable by the Marine Stewardship Council to double in 2017.
Ludwig Kumoru, PNA CEO, said tuna fishing fleets complying with strict chain of custody rules that met Marine Stewardship Council (MSC) certification requirements, delivered over 59,600 metric tonnes of sustainably caught free school tuna to market in 2016. “We expect the volume to double to above 100,000 metric tonnes in 2017, based upon existing orders,” he said.
Over 200 fishing vessels are participating in the scheme generally getting a premium of up to $150 per tonne for their tuna catches, the processors and traders also benefit. MSC-certified skipjack and yellowfin from PNA waters now accounts for over 90 per cent of all MSC-certified tuna being traded globally, a significant change from the days when other regions such as the Maldives dominated MSC tuna sales.
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