Tuna Fishers Consider LPG To Cut Costs - Catches Down 25%ff

With petroleum products breaching the P50 per liter mark, it has put the tuna industry in a “state of delirium” as producers are mulling to use Liquefied Petroleum Gas (LPG) to cut on operational costs, an industry leader said.

Roger R. Lim Sr., vice president of the Alliance of Tuna Handliners, said if diesel and gasoline prices will continue to hike, many operators of fishing boats that catch large tuna stocks maybe force to suspend operations sooner.

Prices of diesel in Central Mindanao region, where General Santos City is its economic hub, are now retailed at P53 per liter and the highest grade gasoline at little over P60 per liter.

Last year, the price of diesel was placed at an average of P37 per liter and gasoline at about P42 per liter.

“At normal fishing conditions, profit margins drastically went down this year to about five to 10 percent from 25 percent to 30 percent the previous year due to the skyrocketing prices of diesel and gasoline prices. Next month I’ll try to use LPG for my auxiliary boats to see if it can cut down cost,” said Lim, the so-called “Tuna King” here for owning a large tuna fishing fleet.

He said Alliance members use the traditional hook and line fishing method to catch large tuna weighing 40 to 50 kilograms apiece.

This sector has an estimated annual value of P4.5 billion. It is composed of over 2,500 handline boats (locally called pump boats) and employs at least 40,000 fishermen, with an estimated annual landing of over 30,000 metric tons of high value tuna, industry data showed.

A usual handline fishing expedition is composed of a mother boat and dozens of auxiliary or small boats that stay in the seas for around 45 days.

The mother vessel, normally with a 4,500 horse power engine, consumes about 8,000 to 10,000 liters of diesel while each auxiliary boat burns an average of 120 liters of gasoline per fishing expedition.

“We are already tired of complaining on the series of oil price hikes. We cannot blame the government because this is a global problem,” Lim lamented.

A way however for tuna handline fishing operators to survive the oil blow is to increase the buying price of large tuna in the buyer-driven market.

Majority of large tuna caught in the high seas by the handline fishermen are considered processing grade, which are currently bought from between P100 to P150/kg.

“If this can be increased to an average of P200/kg, it can contain the impact of the high petroleum prices to large tuna producers,” Lim suggested.

On the other hand, sashimi grade tuna, the stocks that are also exported in whole fresh or chilled form, is being bought at an average of P280/kg.

Lim noted that buyers dictate the market price in the domestic market since the former has the option to source the fish from Indonesia, which offers lower prices.

Jakarta has imposed a ban on tuna out shipment but allows the stocks to be brought outside its country if it has undergone initial processing there. The Philippine government has been working to lift such ban.

Miguel B. Lamberte, Philippine Fisheries Development Authority manager, confirmed that the skyrocketing fuel prices have taken its toll on the volume of fish landing at the General Santos City Fish Port Complex.

He said operators resorted to fewer fishing expeditions in the past months due to high fuel prices.

Daily fish unloading at the fish port complex in the first four months of 2008 dropped by 26 percent to 190 metric tons from 256 MT daily average last year, port complex data showed.

For the four months to April 2008, the volume was 23,031 MT compared to the 30,757 MT for the same period last year, Lamberte said.