23 January 2008
Maldives Export tuna prices rose by over 40% during 2007, according to the Fisheries Ministry, in an encouraging sign for an industry which makes up around 5% of the country’s gross domestic product (GDP).
But the tuna catch fell by about 23% during the year, due to what the Fisheries Minister has described as “seasonal fluctuationsâ€.
And meanwhile the country is set to lose the tax break it currently enjoys from the European Union, the biggest buyer of Maldivian fish. This would result in a new 24% import duty being levied by the EU.
Food Inflation
The rise in tuna prices, from US $955.69 per metric ton in January 2007 to $1,368.45 in December for CIF sales (incorporating insurance and freight charges), forms part of a worldwide trend of food inflation.
With its heavy reliance on imports, the Maldives may be subject to the downside of this trend.
But the Fisheries Minister, Hussein Hilmy, said that “exports are improving†in key fish markets.
Responding to suggestions that growing prices had led to a drop in exports to Sri Lanka, he said exports to the EU are the priority so any reduction in the Sri Lankan market was “not anything we'd be too concerned aboutâ€. Catch Takes A Dive
The dramatic fall in catch last year caused a drop in national GDP growth to 6.6 per cent from the expected 7.3 per cent, according to the Finance Ministry.
But Hilmy said the drop was part of a cycle. Despite a lack of “hard scientific evidenceâ€, he said, the Marine Research Centre (MRC) and “seasoned fishermen†had said such slumps can occur every seven to nine years “due to changes in the environmentâ€.
He highlighted that the figures recovered towards the end of 2007, with the November catch matching January levels at about 12,700 metric tons.
â€Our fishing industry is robust,†he added.
End Of Tax Break?
The Maldives currently enjoys exemption from the 24% import duty levied by the European Union on fish imports due to its UN classification as a Least Developed Country (LDC).
But it is now at the start of a three-year transition phase, at the end of which it will lose LDC status.
Maldives will no longer benefit from the EU’s tax free regime of ‘Everything But Arms’ which applies to LDCs until 2009,†according to a statement from the Maldives High Commission in the UK.
Hilmy said he hopes to negotiate a new tax break but that discussions had “not yet reached a meaningful stageâ€. And the High Commission stresses that the EU has promised special provisions for tsunami-affected countries.
The fishing industry employs 11% of the Maldivian labor force, and over 60% of tuna caught is exported.
