Prices for a metric ton (MT) of skipjack tuna in Bangkok in mid-March slumped to around USD 1,100 (EUR 793), and some industry players signal this may be the floor, with prices inching back up in the coming months.
The market is a far cry from where it was a year ago, when prices in mid-March 2013 were around USD 2,275 (EUR 1,641) per MT. The current prices are more than 50 percent off from the USD 2,400 (EUR 1,731) per MT skipjack was fetching in April and May of last year, when the market peaked. Prices this past February were around USD 1,275 (EUR 920) per MT.
“We believe this is the bottom and prices will begin to rebound, given slow unloadings due to limited carrier space and full cold stores, which will impact supply in a couple of months and pending fish-aggregating-device fishery closures later in the summer,” said the head of one tuna company.
The decline in prices comes as a glut of tuna has flooded the market, blamed on the large number of purse seiners out fishing. There was some talk prices of around USD 1,100 per MT would be enough to get some boats to remain idle, but it remains to be seen what impact such a move would have.
Super-frozen tuna keeps getting more expensive, with an executive of one U.S.-based player saying prices have jumped 12 to 14 percent in the last four months, though the full effect of these hikes hasn’t been passed on to consumers due to the way currency markets were playing in mid-March.
“What’s been mitigating that is, as the price of tuna has been going up the price of the yen has gone down. Tuna is traded on the yen, so our customers haven’t seen any price increases because the increase has been offset by the depreciation of the yen,” the executive said. “We see pricing continuing to steadily rise, perhaps for the rest of 2014. We’re kind of thinking it’s somewhere around a 5 to 8 percent increase for the rest of the year.”
Japan is the main market for super-frozen. But growth in the U.S. market is creating more competition, which one supplier expects will only increase.
“One of the reasons perhaps our super-frozen has done well is the quality. Getting good-sized fish with good grades has apparently been difficult,” he said. “It seems like there’s a decreasing supply.”
Both the CEO of the tuna company and the executive of the super-frozen tuna company say the key to increasing consumer demand is creating products for consumers that are easy to cook, with minimal preparation and cooking methods that ensure the tuna will be cooked perfectly, and something that is easy to dispose of and doesn't leave a lingering fish smell.
“Canned tuna, looking at Nielsen or IRI data, has the highest sales per linear square foot of shelf space, of any other category within the center of the store,” the CEO said. “Greater than canned soup, canned fruit, canned vegetables, yet we’ve not been able to extend our footprint.”
Part of the impact of that is it’s become a very confusing category to shop, he says, as the proliferation of canned tuna products — pouched and flavored offerings, for example — makes it harder for shoppers to find what they are looking for. “Part of what we need to do is make the shopping experience simpler,” the CEO said.
