The canned tuna volume from the Philippines, which has applied for EU single duty quota, has almost reached the maximum of 9,000 M/T. To date 8,433 M/T of canned tuna has been imported from the Philippines and importers have presented customs with their documents for duty clearance.
The quota went into effect on July 1st 2003. However, not one single container imported from the Philippines, which has applied for the quota, has been awarded the 12% duty percentage yet.
8,433 M/T (or 93,7 % of the total quota) are still pending and under review by customs for allocation. This is contrary to containers of canned tuna imported from Thailand and Indonesia. Each of these two counties also have a single duty quota, but EU customs have been processing and awarding the loads 12% duty on a daily basis, on a “first come, first served†basis, without any delay.
According to information available to Atuna, the reason why not a single container from the Philippines has been awarded 12% duty is that the Philippine government has failed to complete the formalities and agreement with the European community, required for the quota to go into effect.
The Philippines motivation for not signing, and finally agreeing on the single duty application is that the Philippine Department Trade and Industry (DTI) first wants to agree a monitoring system with its European counter parts. This Philippine proposed monitoring system should ensure that the quota is allocated in a way that it would directly benefit the Philippine industry, and not the EU importers.
According to Atuna’s information, such a system should also arrange that a certain amount of containers is allocated to each exporting Philippine tuna processor, which are then allowed to be imported by EU importers on the single duty quota. How the financial benefits should then flow back to the Philippines is not clear.
Last week members of the Tuna Canners Association of the Philippines (TCAP) have stated that they are expecting a $5-6 million profit increase this year after the European Union (EU) council has granted the reduction of tariffs. The estimated profit gain was computed based on the current 2.8 million cases of canned tuna export entering the EU market and the expected 10 percent production increase spurred by the tariff cut. Each of the tuna cases is priced $18 or $19.
If this blockage of the allocation of the 12% duty for the Philippine’s continues, it will create insecurity for the EU importing companies involved. However, on the other hand, full allocation and full consumption of the quota in the coming week could also move buying interest away from the Philippines and more towards Thailand and Indonesia.
At this moment of the 2,750 M/T initially available for Indonesian canned tuna imports, still 1,652 M/T are open for application, and only 125 M/T are pending. From Thailand already 5,133 M/T of canned tuna have been allocated and awarded the 12% duty, and only 238 M/T of the total quota of 13,000 M/T are pending today.
Almost all of the containers of canned tuna from the Philippines, which have been submitted since July 1st for the single duty quota, were shipped from origin before June 7th 2003. On this date the EU commission finally approved the new regulation on the introduction of the single duty quota system for the Asian nations. So at the time of shipment, neither importers, nor processors had any assurance, that indeed these containers would benefit from the reduced duty.
There is currently no outlook on when the European Community and Philippines will reach a final agreement on how to monitor and allocate the imports of Philippine canned tuna for the quota, nor who will benefit from it.
In the meantime, however, importers can put their goods in free traffic, and distribute them to their customers, as long as they pay the 24% duty. They just might have to wait longer before they are informed by customs if they been awarded the 12% EU single duty or not.