A leading tuna supplier to the U.S. market said there’s a high likelihood of further price hikes to customers due to rising input costs.
Chinese tuna supplier Luen Thai raised prices 2.5 percent on headed and gutted (H&G) tuna in March 2022 to cover increased fuel costs. Now, the company may have to raise prices again.
“We thought that would be the end of price increases at least for this year. But inflation has steadily grown – not abated as some predicted,” Joe Murphy, a part-time U.S.-based advisor to the company, told SeafoodSource.
“Luen Thai is now experiencing fuel costs for our vessels exceeding 50 percent from the start of this year,” Murphy said. “Each time we bunker a boat the cost has increased over the last bunker. Predicting our costs even for the next quarter has become a challenge. So far we have not seen any trend of diminished demand. But one must realistically ask how much additional cost can the consumer absorb before we see sales decline? I don’t have that answer.”
Murphy thinks a rollback of tariffs on seafood from China could help. The National Retail Federation (NRF) and the National Fisheries Institute in the U.S. are both pushing the Biden administration to drop Section 301 tariffs on Chinese goods. The tariffs, the NRF said, cost the average American household more than USD 1,200 (EUR 1,127) per year.
“I have no insight on the planned action of the U.S. government. From my daily reading of several newspapers and the internet it seems likely there will be some adjustment to the current tariff arrangement with China that The White House and treasury have both recently indicated this is under consideration,” Murphy said. “But it seems unlikely we will see a full rollback of the tariffs initiated under the previous administration. Personally, I would like to see a significant if not full rollback as I do believe it would bring down the cost of highly consumed frozen seafood portions.”
Amid the rising inflation and increasing input costs, the tuna supply is tight, Murphy said.
“This could possibly be from the effects of La Nina conditions in the WCPO,” Murphy said. "So the demand for tuna for both the foodservice and retail markets remains unsatisfied. We would not expect this to be a continuing trend.”
Photo courtesy of Luen Thai
