Rise in demand for canned tuna

In the high-end sashimi and non-canned tuna trade, demand remains low this year in the largest market, Japan. However, the positive trend continues in the US market, which could be considered as the second most important market for non-canned tuna including sashimi tuna.

Supply

Catching in the Indian Ocean is being affected by bad weather and strong currents. The situation in the Eastern Tropical Pacific is not very good either, although processors in Ecuador have enjoyed strong demand as the price of tuna raw material has been lower than in Bangkok for the past few months. This has given a clear cost advantage to the Latin American producers, especially in the EU market. With increased demand for fish, the price of skipjack has been firm at USD 2 150/tonne to USD 2 200/tonne ex vessel Manta.

Adverse environmental conditions have affected fishing efforts in the Indian Ocean. A number of vessels suffered some damage to nets and other equipment further limiting their capabilities. Therefore prices have increased, even if only slightly, to EUR 1 670/tonne for skipjack and EUR 2 400/tonne for yellowfin 10kg and up FOB Seychelles.

Catches were also lower in the Western Pacific where the 4-month FAD closure is underway from 1 July to 31 October. Several fleets are planning to perform maintenance and repair works during the closure period.

For bigeye sashimi tuna, lower supplies of Indian Ocean origin are forecast because of the shift in fishing to albacore tuna in the cooler water area of the southern Pacific Ocean.

For Atlantic bluefin tuna, the closed fishing season including purse seine and trap fishing in the Mediterranean starts from 10 June for the EU fishing nations. The 2013 quota of 7 548 tonnes fixed for the EU countries was exhausted before then.

In the Western Pacific, Kiribati has signed a fishing agreement with the European Union to replace the agreement that expired in September 2012. The new agreement will give Kiribati a fee of USD 1.71 million and allow EU fishing vessels to catch 15 000 tonnes of tuna annually in the EEZ waters. The agreement also stipulates that if the annual catch limit is exceeded, there will be an extra fee of EUR 250/tonne imposed for the first additional 2 500 tonnes and a further EUR 300/tonne for the next 2 500 tonnes.

The EU has also signed another agreement with Gabon that gives EU fishing vessels access to 20 000 tonnes of tuna in the country’s territorial waters and is valid for 3 years.

Market Trend

Since the beginning of this year the sashimi market in Japan has remained unattractive to local and foreign suppliers. This situation can be directly linked with the weaker yen. High fuel prices reduced fishing efforts for coastal tuna fisheries and imports have also slowed down, even for the popular frozen loins and fillets.

In contrast, the US market for non-canned tuna, particularly frozen loins and steaks has been stable despite the rise in average import prices. For canned tuna the market seems to have taken a positive turn as well. Compared with last year, the trend in the EU canned tuna market also looks positive.

Tuna packers in Asia seem to be able to adapt well to the high skipjack raw material price while consumers in major markets are slowly accepting the higher canned tuna price. There are positive indicators that demand for canned tuna has shown some improvement as a result of ongoing promotion and product innovations carried out by major suppliers as well as the growing popularity of private (supermarket) brands.

Japan

This year, local sashimi boats have reduced fishing efforts in the coastal waters resulting from the weakening yen and the increased cost of fuel, which is imported This factor has also affected catches in distant waters. Overall tuna landings in Japan posted a 13% decline during the first quarter of this year compared with the same quarter last year. Fresh skipjack landings, however, were 46% higher. In the sashimi market, local skipjack is a popular and cheaper substitute for other red meat tuna, such as yellowfin and bigeye.

The Spring festival season, which falls in April-May, is one of the peak consumption times for sashimi tuna in Japan. However, this year overall tuna trading at wholesale markets was much lower than the usual average in May according to the latest report released by the government. Sales of locally farmed bluefin and other imported sashimi tuna were lower than previous years during the first five months of the year. Overall supply was low from domestic and foreign sources, affected by the weaker yen against major foreign currencies. While the yen remains above JPY 100 for USD 1, import prices for all types of seafood have increased by 20-30% compared with last year.

As of June, the inventory level of low quality bigeye tuna of Indian Ocean origin (caught off Somalia), was considerably lower at about 500 tonnes compared with 2 500 tonnes reported during January/February. However, the stock level for Mexican farmed bluefin tuna was high at 2 500 tonnes because of slowing demand in the market.

The sluggish market demand during the hot and humid month of June is normal and consumer demand shifts towards tataki or grilled skipjack and other seasonal seafood such as salmon, pike mackerel and squid. Sushi restaurant chains, particularly the kaiten sushi restaurant operators, continue to opt for cheaper alternative species such as salmon and marinated mackerel. Supermarkets are still maintaining last year’s prices, although import prices have gone up considerably. In retail trade, there is strong resistance to price rises from end consumers.

Imports of fresh and frozen tuna also declined during the first quarter of this year to 57 528 tonnes, which is 12% lower than last year.

While air-flown imports declined by 3%, the drop was sharper for frozen tuna at 20% during the first quarter of this year, compared with the same period last year. With the exception of bigeye tuna, lower supplies were registered for all other types, including a significant drop for frozen skipjack of -69% indicating lower requirements from katsuobushi and canned tuna processors in Japan. In order to adjust to high raw material prices, Japanese tuna packers have reduced their canned sizes from 80g to 70g per can.

Imports of frozen bluefin loins from the Mediterranean were higher than last year as more fish is being processed into frozen loins for longer storage life. However, for the first time since 2010, supplies of red meat quality frozen tuna loins fell behind that of last year, a factor that marketers link to the cheap yen.

USA

Last year the US imported more than 163 000 tonnes fresh/frozen tuna, which was 2.5% higher than the year before. This development is largely linked to improved demand for non-canned tuna, particularly frozen loins and steaks, among others. The total value of these imports was USD 1.06 billion in 2012 against USD 737.94 million in 2011.

The stable trend in the non-canned tuna market segment is continuing this year, which is reflected in January-March import data for fresh tuna as well frozen tuna loins. Import growth for the latter has been impressive, largely dominated by supplies from Southeast Asian countries, namely Indonesia, the Philippines and Thailand.