Main Global Tuna Developments In August

August marked an eventful month for the global tuna industry, with the full impact of the annual FAD ban in the WCPO now visible. Industry participants also continued to weigh the impact of the ongoing US-China trade war, with Atuna readers voicing their opinion in a poll conducted earlier in the month.

The two closely followed developments this month were, not surprisingly, the impact on FAD ban in the Pacific on catch and the MSC’s decision on mixed fisheries entering assessments. Atuna reported extensively on both the issues throughout the month.

Generally the impact of the tuna FAD ban in the WCPO is around a 30 percent reduction in catch. But reports from our sources in the region suggest that this season has been unusual in terms of catch! We are continuing to monitor the influence on supplies and prices in Bangkok, the main hub for skipjack tuna. Our Atuna Price Index does demonstrate that the trend after the ban often shows a decline. Pricing activity at the start of the FAD ban has been very unusual this time around, partly due to unanticipated supply chain issues.

Price of skipjack and yellowfin in the IO hub of Seychelles meanwhile ticked up in early August. In terms of catch, EPO skipjack did show an upward trend but levels still remain below those seen in 2017.

On the certification front, the MSC reported that its earlier decision to stop mixed fisheries from entering assessments failed to get the backing of the industry and NGOs.

The month also saw some tuna heavyweights releasing quarterly numbers. The trend was generally positive, with one of the biggest tuna processing companies and owner of the Chicken of the Sea brand Thai Union (TU) showing margin improvement, thanks to more stable raw material prices. TU though is a little cautious about its sales outlook for the full year. Other notable earnings release came from StarKist brand owner Dongwon Industries, Alliance Select and Century Pacific. Alliance’s results were strong despite several of its key executives being embroiled in a legal controversy.

The price fixing saga continued to weigh on the industry, with TU reporting that it took a charge of USD 44 million in its second quarter. The money has been set aside for possible price fixing case settlements.

A stronger baht continued to hurt Thai exports although the currency has come under downward pressure since the beginning of the second half, which might potentially benefit the country’s canners. Having said that, the new trade deal between US and Mexico did weaken the dollar somewhat towards the end of August. The US released its fisheries import data and once again the recent trend was visible, with frozen tuna showing volume growth.

Looking forward to September, the impact of the FAD ban on supplies and prices in Bangkok will be closely watched, especially in the wake of unusual catch activity. September also sees the annual tuna festival in the Philippine tuna capital of General Santos City. Amid high security, the festivities are expected to be attended by thousands of foreign and local visitors. More serious issues with regards to the Philippine tuna industry will also be discussed at an annual conference, which starts on the final day of the festival.

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