In response to declining international demand and weak domestic prices, Indonesia has imposed an export quota of 3,000 metric tons on unprocessed skipjack tuna for the next three months. Fisheries Minister Freddy Numberi said the temporary quota will be reviewed at the end of the first quarter.
Skipjack prices dropped to as low as 29 cents per pound while producers’ breakeven price is approximately 40 cents. Despite the loss, tuna producers favor the domestic market due to the absence of export duties.
Soen’an Hadi Poernomo, head of the ministry’s information center, clarified that two prominent tuna export associations are limited to 1,500 metric tons of exports each for the first quarter.
The export decision was criticized by the industry, which says the government should let the market control price and supply without government intervention. Eddy Yuwono, chairman of the Tuna Producers Association, added that the quota would neither raise domestic price nor increase global demand. He says the global market has an oversupply of tuna, evidenced by the full cold storage situation in Thailand.
Tuna is one of Indonesia’s main seafood exports. According to the Central Statistics Agency, Indonesian seafood exports totaled $2.5 billion, slightly less than the targeted $2.68 billion in 2008.
Saut Hutagalung, the ministry’s director of foreign marketing, claimed the current global crisis affected demand for shrimp and tuna for November and December.
However, the Indonesian Association of Canned Fish Producers reported that canned tuna exports to the United States are down 40 percent so far this year. Lower demand pulled the price down from $41 to $35 per box. Association Chairman Hendri Sutandinata, who predicted the global market’s 10 percent decline, added that impact from the financial crisis is inevitable, and a slow market has resulted in a 20 percent production cut.
January 11, 2009
