Thai giants battle with high tuna costs

<div style="text-align: justify; line-height: 15pt; margin: 6pt 0cm 0pt"><span style="font-size: 10pt">One of them, Kingfisher, is currently targeting the pet food market as one of the ways to cope with the high costs of skipjack tuna.</span></div> <div style="text-align: justify; line-height: 15pt; margin: 6pt 0cm 0pt"><span style="font-size: 10pt">Skipjack prices hit the $2,000 (&euro;1,490) per ton barrier last year, and have been hovering around $1,800 (&euro;1,341) to $1,900(&euro;1,415) per metric ton since.</span></div> <div style="text-align: justify; line-height: 15pt; margin: 6pt 0cm 0pt"><span style="font-size: 10pt">The company, owned by Japanese giant Maruha Nichiro, relies less on tuna when they produce pet food, as they add in chicken or beef into the mixture.</span></div> <div style="text-align: justify; line-height: 15pt; margin: 6pt 0cm 0pt"><span style="font-size: 10pt">This reduces the cost of production, and helps them cope with the high skipjack prices, Adisak Phunthong, Kingfisher&rsquo;s purchasing manager, told IntraFish.</span></div> <div style="text-align: justify; line-height: 15pt; margin: 6pt 0cm 0pt"><span style="font-size: 10pt">While its usual canned tuna production of human food and pet food is around 50 percent each, pet food production can sometimes increase to 60 percent of their total output, Phunthong said.</span></div> <div style="text-align: justify; line-height: 15pt; margin: 6pt 0cm 0pt"><span style="font-size: 10pt">In addition, with oil prices increasing due to conflict about Iran&rsquo;s nuclear plans, it will make going out to fish for tuna even more expensive, &ldquo;so we have to find ways to reduce costs,&rdquo; he said.</span></div> <div style="text-align: justify; line-height: 15pt; margin: 6pt 0cm 0pt"><span style="font-size: 10pt">Which is why Kingfisher is also looking to diversify and process more farmed fish like tilapia, in order to reduce reliance on tuna, he said.</span></div> <div style="text-align: justify; line-height: 15pt; margin: 6pt 0cm 0pt"><span style="font-size: 10pt">Also looking to lessen their reliance on tuna is Thai tuna giant Sea Value, the country&rsquo;s second largest producer of canned tuna and part of family-owned seafood giant Wales Group.</span></div> <div style="text-align: justify; line-height: 15pt; margin: 6pt 0cm 0pt"><span style="font-size: 10pt">&ldquo;Our research and development teams are always finding ways to provide new value-added products so as to use less tuna,&rdquo; said Sea Value&rsquo;s quality assurance manager Chutima Phothinin.</span></div> <div style="text-align: justify; line-height: 15pt; margin: 6pt 0cm 0pt"><span style="font-size: 10pt">&ldquo;There are also now strict regulations on both the supply and demand side, and it has been very tough for tuna companies to cope with,&rdquo; Phunthong told IntraFish.</span></div> <div style="text-align: justify; line-height: 15pt; margin: 6pt 0cm 0pt"><span style="font-size: 10pt">More customers are asking for tuna not caught using fish aggregation devices (FADs), while at the same time on the operations side,&nbsp;two main fishing pockets remain closed in the Western Central Pacific Ocean &ndash; a main source of supply to many Thai tuna companies, he said.</span></div> <div style="text-align: justify; line-height: 15pt; margin: 6pt 0cm 0pt"><span style="font-size: 10pt">&quot;Raw material availability is still the number one challenge,&quot; Amanphorn Aramwattananont, vice-president of Sea Value, told IntraFish.</span></div> <div style="text-align: justify; line-height: 15pt; margin: 6pt 0cm 0pt"><span style="font-size: 10pt">&ldquo;With plans for catches from PNA fisheries to be sent to PNA countries for processing, Thai tuna companies would have less tuna to process, and it is going to affect us in the next ten years,&rdquo; he said.</span></div>