Tuna Market Intelligence - Issue 43

MARKET UPDATE

Insiders at the Bangkok tuna market report a slight change in prices.

Parties to Nauru Agreement (PNA) Commercial Manager Maurice Brownjohn said after several weeks of recording US$1400 per metric tonnes, current markets have been about $1420 to $1450.

Brownjohn said the processing order was traditionally deferred till the end of the Fish Aggregating Device ban where catches spiked and prices fell.

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INFLUENCERS REPORT

PNA identifies interesting trends 

The PNA has detected some interesting fishing patterns during the FAD closure period. Fishing effort was high in the northern and eastern regions which is a contrast to the early 3 months of the year where fishing was heavy in the South.

Technical Adviser Dr Transform  Aqorau said the warm waters in the southern edges of the concentration of skipjack saw heaving fishing in Solomon Islands in the first three months of the year.

This has shifted with a migration up North to FSM, Marshall Islands and to the east as well where free school fishing in Kiribati has been reported by observers to be high at this time of the year.

He said waters down in the southern ranges in Solomon Islands have been cool, a phenomenon that could be attributed to the southern winter.

There has obviously been a reduction in the number of vessels fishing during the FAD free period with a number of them tied up for repairs, he said.

Dr Aqorau, said the fishing patterns of during the last couple of weeks shows 19% of vessels in PNA waters are in FSM either in port in the EEZ, 33% are in Kiribati waters, 8% are in Marshall Islands waters, 8.6% are in Nauru waters, 17.8% are in PNG waters, 3.4% are in Solomon Islands waters, 2.2% are in Tokelau waters, and 9% are in Tuvalu waters.

"The fishing patterns of the various flags reflect historical trends with most of the Japanese vessels fishing in the west, while the Taiwanese and Korean vessels are generally spread across the region with most of the vessels in Kiribati, and Nauru. The US flagged vessels having been fishing in Tokelau and Tuvalu, he said. 

Marshalls gets more revenue

Revenue from commercial fishing licenses jumped from five percent to 30 percent of local revenues in the Marshall Islands between 2006 and 2015, prompting calls for better financial management, Pacnews reports. 

Income from the Parties to the Nauru Agreement to the Marshall Islands has risen from around US$3 million a year to US$20 million, which “heightens the need for prudent fiscal management,” said the Asian Development Bank’s Pacific Economic Monitor. 

“Prudent management is right on point and we needed it yesterday,” said Alfred Alfred Jr., Minister of Resources and Development, who oversees the fisheries sector. “There is an increasing number of leaders who see this as a must.”

In the past, the Marshall Islands Marine Resources Authority’s (MIMRA) seven-member board was responsible for the allocation of this windfall of revenue, a situation that Alfred described as “not optimal,” because the process was non-transparent. 

Starting with the fiscal year 2017 budget, which begins October 1, 90 percent of fisheries revenue will be included in the normal government budget process, with the leftover funds for MIMRA’s annual operating budget. 

US$94.6m in tuna revenue for PNG

The tuna industry is expected to pay the Government more than K300 million (US$94.6m) in revenue by the end of the year, according to the Minister for Fisheries and Marine Resources Mao Zeming.

Zeming told The National that the industry created major revenue for the Government. “We have about K80 million so far and by end of this year we looking at about K300 million,” he said.

Zeming stressed the fisheries sector’s importance: “Annually we are paying dividends directly to the national purse. And with the downturn in the economy, fisheries have been coming good. It has been a dependable sector and we have been supporting the Government through revenue at the expense of our own programmes.”

Top US tuna bosses face lawsuits

Top executives from the three largest seafood brands were involved in collusion on prices and agreed to underfill cans, along with parent companies Thai Union Group and Dongwon Industries, it is alleged in updated civil lawsuits filed in US court.

The US Department of Justice (DOJ) is proceeding with a criminal investigation of price fixing in the $2.6 billion shelf stable seafood market by the three largest companies, Bumble Bee Foods, Dongwon owned Starkist and Thai Union owned TriUnion Seafoods (whichtrades as Chicken of the Sea).

In one of the amended complaints, Chris Lischewski, CEO of Bumble Bee from 1999 to the present day; Don Binotto, Starkist CEO from the 1990s through November 2010;John Signorino, Chicken of the Sea CEO from January 2005 to October 2007; and Shue Wing Chan, Signorino’s successor, are all named as being allegedly involved. In another of the amended complaints, Andrew Choe, CEO of Starkist, is also named.

PNG could lose from UK exit

Papua New Guinea could lose trade concessions into the United Kingdom as a result of its exit from the European Union.

The UK is a significant market for fishery, agriculture, and mineral products from PNG and other pacific countries.

Its decision to exit the EU has raised questions about the future of trade deals and EU concessions enjoyed by trade partners including PNG.

PNG and other Pacific countries supply about 4% of the processed tuna that goes to the EU annually, and 50% of that enters the UK market.

Since 2007, PNG and EU negotiated an Interim Economic Partnership Agreement (IEPA) to protect ongoing market access for processed tuna and other commodities into EU.

For fisheries, the key feature of IEPA is ‘global sourcing’ whereby any fish can be imported into PNG and provided it is processed or canned as cooked loin in PNG, it receives duty free access to EU markets.With UK’s exit, there is some uncertainty over these trade concessions.

Over 20,000 jobs will be lost, along with export earnings and market competiveness if PNG does not negotiate directly with the UK to retain the trade deals.

The National Fisheries Authority, its Board and the Ministry were briefed of this potentially damaging ‘Brexit’ scenario last week.NFA officials are now working with the Departments of Foreign Affairs, Trade and Industry and other line departments to develop a comprehensive submission for Cabinet to consider.

Fisheries and Marine Resources Minister Mao Zeming said it was important that negotiations start quickly:

“Unless we get concessions for our products into UK, we are likely to struggle in that market, particularly if our competitors are given access on better terms.”

 

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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MH 96960
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