Tuna Market Report - Thailand - January 2009
Lower tuna prices positive for Thai industry
Thai imports of frozen tuna went up strongly in the first nine months of
2008. Some 610 000 tonnes were imported, which compares to 523 000 tonnes in
the same period of 2007. Skipjack continues to be the main species imported
with about 80% of Thai frozen tuna imports. This species was the main
responsible for increased Thai tuna imports. Almost all the frozen tuna that
is imported into Thailand
is processed into canned tuna for exports.
The Thai industry took advantage of reduced raw material prices in the course
of 2008. Skipjack prices topped at USD 2000/tonne in July 2008 and declined
to USD 1600/tonne in December 2008. Further declines seem likely, in view of
the present financial situation.
Despite the generally difficult situation, Thai canned tuna exports performed
very well during 2008. In
the first nine months of the year, some 420 000 tonnes were exported, a 33%
increase over the corresponding period of 2007. The USA continued
to be the main market, importing about 80 000 tonnes, a sharp jump from the
60 000 tonnes imported in the first nine months of 2007. Strategic
partnerships with the Thai tuna canning industry are the main reasons behind
this increase. In addition, the competitiveness of the US tuna
canning industry continued to shrink, leaving more space for the Thai
industry to take over. The Thai industry also managed to expand its market in
Egypt, Australia and Libya, with growth rates
exceeding 50%. These figures show, that the Thai
tuna canning industry is very dynamic, and able to react to a difficult
overall situation.
The increased raw material prices early in 2008,
were absorbed by the industry without major problems. At the moment, the
sharp decline in raw material price should favour the industry even further. Thai
canneries are at present paying only USD 1 100/tonne, compared to prices
exceeding USD 2 000/tonne in summer months.
Thai Union (TUF), the largest tuna exporter in Thailand and owner of the Chicken
of the Sea brand, reported its earnings rose 116% in the third quarter 2008,
and it forecast an overall rise of 12% in dollar sales for 2009. TUF wants to
boost production by 10% in 2009 from this year’s 350 000 tonnes and expects demand to rise due to
lower tuna prices. TUF bought the US Ace of Diamonds canned tuna brand. Though
the brand has only a 1% share in the USA canned tuna market, the
acquisition is expected to strengthen TUF’s
subsidiary company, Chicken of Sea, in the market.
Canned tuna imports into the EU were more or less stable in 2008, with some
ups and downs experienced by single countries. Thailand experienced a
significant decline in the export of its canned tuna products to the EU. Imports
of Thai canned tuna declined by 42% on the German market, 22% on the UK market and
12% on the French market. This decline was caused by high prices of the Thai
product compared to countries which are able to sell under zero tariffs to
the EU market. In fact, countries such as Ecuador,
Ghana, and Seychelles
performed positively during the 2008 period.
Outlook bleak
Landings have been less than average in all major fishing areas. Therefore
the rapid decline in the market price has been attributed to lack of
confidence on the part of the buyers. No one wants to buy in anticipation
that prices will continue to decline. Boat owners are said to be considering
a voluntary stop of fishing to allow the market to recover. The combination
of expected management measures and voluntary reductions in the fishing
effort by boat owners are expected to slow or reverse the current negative
trend in prices.
