Tuna Market Intelligence - Issue 27

November 17, 2015

Your fortnightly report on trends and influencers on the global tuna market from the Pacific Islands

PDF version available here


Expect tuna prices to drop as low as US$1000 per metric tonne by the end of this year, Bangkok insiders revealed.

A recent tuna conference in Bangkok heard that the global total tuna catch for 2015 will exceed five million metric tons.

This was topped off with news that the construction of purse seine vessels, which rose from 58 to 63 units between 2013 and 2015, will also contribute to an increase in catch when boats are delivered.

Prices have fallen from $1,300 to $1,100/t in November, and skipjack tuna could plummet to $1,000/1,050/t by the end of the year.

Francisco Tiu Laurel, who is head of the World Tuna Purse seine Organization said there are a number of reasons for this trend including overfishing. He said Vessel Day Scheme prices in the Pacific were also hurting boat owners.

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FADs to kick off Bali meetings

Fish Aggregating Devices (FADs) are firmly on the agenda in fisheries talks as fisheries officials and stakeholders head to Bali in Indonesia in a special Intersessional Working Group on FAD management options from November 27-28.

The Group will also look at how other Regional Fisheries Management Organisations (RFMOs) are monitoring and collecting data on FADs, including the system used by the Inter American Tropical Tuna (IATTC).

Whilst the WCPFC may suggest a separate measure requiring physical marking of FADs, PNA

collects its own data on FADs electronically.  Hence, Parties to Nauru Agreement (PNA) have already adopted their own strategy going into that meeting.

PNA Chief Executive Officer Dr Transform Aqorau said: "This is simply a matter of asserting that collection of additional data on FADs should be based on the same standards-based approach used for the provision of other fishery data, where the Commission defines the data to be collected." he said."FADs have dominated a number of fisheries meetings and we do have a rough estimate of how many FADs are deployed in PNA waters but we just need to ensure that all our reporting systems are compatible and online, so we do not create different reporting lines, which usually means training more people and implementing over a period of time."

PEW estimates increase in FADs

Meanwhile, there is a new estimate on the number of FADs. In 2012, The Pew Charitable Trusts published an educated estimate of how many drifting FADs were deployed globally. The analysis concluded that the total number deployed in 2011 ranged from 47,500 to 105,000, depending on the calculation method.

Using data on fishing obtained since then, along with new scientific research and an examination of recent trends in FAD use and technology, Pew has produced updated estimates indicating that the total number of drifting FADs deployed in 2013 ranged from 81,000 to 121,000.

The upper estimate has increased by 14 percent since the calculations for 2011.

Japan keen on Pacific fishery

The western and central Pacific “fishery is a very important issue to us,” said Hiroaki Shinohara, the senior deputy director for Pacific Island Affairs at Japan’s Ministry of Foreign Affairs, in an interview late last month with the Marshall Islands Journal in Tokyo.

“About 80 percent of Japan’s tuna catch comes from this region,” he said.

In comments about Japan’s view of the Parties to the Nauru Agreement’s Vessel Day Scheme (VDS), Shinohara raised concern about the possible impact of VDS fishing day fees if they continue to rise:“If the fee is too high, it could hurt our fishing companies, some of which are not so big,” he said. “It could impact the small and medium sized fisheries industry.”

Two years ago, PNA initiated an independent review of the VDS. A key finding of this independent evaluation is that VDS fees actually collected by PNA nations — currently at a minimum benchmark of US$8,000 per fishing day — are significantly below what is attainable.

Revenue to the eight PNA nations has risen from US$60 million in 2010 to an estimated US$350 million this year.

WCPFC meeting to discuss Observer safety

PNA nations are raising Fisheries Observer safety and security as a top agenda item for the upcoming annual meeting in Bali of the Western and Central Pacific Fisheries Commission (WCPFC).

With the backing of numerous island nations, the Marshall Islands and Nauru officially communicated earlier this month with FeletiTeo, WCPFC Executive Director, to get the issue highlighted as a separate
agenda item at the November 30 to December 8 meetings in Bali.

Marshall Islands fisheries director Glen Joseph said Fisheries Observers are the frontline for management of the Western and Central Pacific’s vast tuna fishery: “It is essential to ensure that they can provide quality data and are not compromised.”

He noted that at a recent WCPFC technical meeting, a report was provided about the mysterious disappearance of a Fisheries Observer working in the Eastern Pacific Ocean fishery.

“There have been similar cases in the Western Pacific,” said Joseph. “To date this has not been addressed by way of putting a solution on the table. We want the Commission to adopt a robust policy and standard for observer safety and security.”

Joseph estimated there are over 500 active Fisheries Observers working in the WCPFC area. PNA policy requires 100 percent observer coverage of all purse seine fishing vessels, and increased coverage of longline vessels.

“Observer safety and security needs to be addressed by everyone, from both observer and operator perspectives,” said Joseph.

New plant for PNG

PNG's claim on being the Pacific's tuna capital is furthered as they signed another agreement to build a new tuna processing plant in Lae this month.

The agreement was signed Tuesday in Port Moresby with Korea’s leading fishing and cannery company Dongwon Industries on a project worth US$35 million(K100 million) with a plant capacity to process 200 metric tonnes of tuna per day.

Minister for Fisheries and Marine Resources, Mao Zeming, said the Dongwon Tuna Project would be the sixth such processing project to be built in Lae following on from Frabelle, International Food Corporation and Majestic Seafoods.

Zeming said under the agreement, its fishing subsidiary, Bulolo Fisheries Ltd, would be required to operate 10 purse seiners in PNG under domestic and locally based foreign flagged vessels associated with supplying raw fish to its canned tuna factory.

Two of the 10 vessels will be re-flagged to PNG as domestic and eight will be licensed as locally-based foreign vessels. Five Dongwon’s vessels will remain under foreign bilateral access arrangement.

Bounty Seafoods Ltd will be the local subsidiary of Dongwon, responsible for processing tuna loins and canned tuna.

He said the project would start construction work early next year and was expected to contribute more than 10,000 local jobs with other existing tuna projects.

PNG canner suggest more local operations

While new players enter the country, an older player, Papua New Guinea's RD Tuna Canners, believe that more local processing should be encouraged but there needs to be an assessment of capabilities in terms of available resources and infrastructure set up.

Managing Director Pedro Castillo Celso said for PNG they need to remain competitive but they needed to upgrade infrastructure, which he claimed was not happening.

He also said the Vessel Day Scheme had an impact on the cost of doing business and whilst VDS price had increased they were passing on the costs to consumers.

Mr Celso said it if the cost of doing business was too high they would inevitably find a way to process somewhere else.

He proposed a combination of transshipment and local processing as a long term objective.

Japan Yen affects returns

A weak Japanese Yen has affected returns to ship owners who export fish to the lucrative market for its sashimi.

Golden Ocean Fish company's Managing Director Xue Jun Du said the weak Yen had affected profits by at least 50 per cent.  The company runs a joint venture with the Kiribati Government and has a processing plant in Fiji.

Mr Du said most of their  fresh fish from was exported to the USA mainland and Hawaii and they had not exported fresh fish to the European Union since 2008 due to the high cost of air freight.

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Tuna Market Intelligence is an independent publication, sponsored by the Parties to the Nauru Agreement (PNA) to unearth industry and market information from Pacific Island reporters and analysts. Reprint in the media from the PNA countries is free. All other reprints must be authorized. Contact us on marketintel@pnatuna.com or see more on www.pnatuna.com


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