CROW's Nest is the first monthly in-depth report on the status of the "Tuna Industry." For a copy of the publication, please send your name and address to: Casamar Group, Inc., and advise them that you would like to get a hard copy of the report.

Continuing weak market for tuna

Tuna prices continued to drop in June. Price of Skipjack (4#) in Bangkok has dropped to $560$580 per metric ton.

In Spain, it is believed to have dropped to $540 per metric ton. Nearly all of the French and Spanish tuna available has found a market; however, there is still a heavy inventory in Spain, especially in Galicia. The oversupply in Spain is not in the domestic production (French and Spanish boats operating, in the Indian and Atlantic ocean) even if their catch levels were to return to the catches before the El Niño. It is the "flooding" of supply from the Eastern Pacific and the Western Pacific. This situation is exacerbated when the Far East canneries cannot buy all the fish available. The fish ends up in Europe.

The French fleets have caught 3,500 metric tons in the Atlantic and 9,500 metric tons in the Indian Ocean.

In Samoa, the price has dropped to $500 per short ton and is believed to have bottomed out.

Due to the continuing weak market conditions, the owners of the 19 vessels that are members of the United Tuna Cooperative (UTC) have decided to expand their slowdown of catching activity. The group implemented a 30-day port stay policy (see June 1999 Crow's Nest) for the current round of deliveries. The members have now decided to stay in port for 45 days for the next round of deliveries. The UTC members feel that it is necessary for them to reduce the supply of tuna to the market since no meaningful activity has apparently taken place to promote sales of canned tuna.

Fishing in the Western Pacific has been good, with most boats making 30day trips but having to wait 34 weeks to unload.

Fishing in the Eastern Pacific continues to be good. According to IATTC reports, total 1999 tuna catches through the end of June are ahead of last year by 129,695 tons (319,656 metric tons for 1999 versus 189,961 metric tons for 1998).

In Ecuador, skipjack price at around $540 per metric ton is believed to decline further in July.

Starkist Puerto Rico plant continues to run at reduced capacity, which has reduced the amount of reefer vessels moving from the Western Pacific to Puerto Rico. StarKist Caribe is currently processing only about 250-300 short tons per day, four days per week. This plant has become a processor of special size canned products, as well as packer of loins from their plant in Ecuador. In addition to increasing production at Samoa, StarKist has expansion plans for their tuna plant in Seychelles, which produces for the European market.

In France, the importation of canned tuna is 36% less in volume for the first quarter of the year 1999 but 48% less in value for the same period in 1998. The only productions that made some progress on the French market are those of Spain, Seychelles, Ecuador and Colombia. The reason for this is that Spain, Seychelles, Ecuador, and Colombia all benefit from a zero duty agreement with France.

Saupiquet of France is now positioning itself to be profitable again in 1999 after a very bad performance in 1998. The new chairman, Mr. Lefebvre, is looking for some partners to operate the company's fishing, fleet of 7 purse seiners, which provides some 50% of the company's tuna procurements. He is now looking into reorganizing the canned fish product lines with some new recipes with added value. He is particularly interested in taking advantage of the "frozen at sea" tuna loins that his 2 large tuna purse seiner factoryfreezer boats are producing. These are the only 2 known factoryfreezer tuna boats operating in the world. He believes that this will create a new consumption habit for "fresh" tuna as opposed to the canned tuna styles.

In the United Kingdom, the brands John West (Heinz) and Princes (Mitsubishi) are promoting their tuna product lines and their "readytoeat" tuna recipes called "snacks style". It seems that a plastic bowl is more widely accepted than a metallic package for this use by the consumer.

Mitsubishi's Prince already has a product called "Lunch Breaks," which is a series of 5 recipes to be bought either individually or together in a specially designed cardbox providing 5 different menus for the week!

In Spain, there seems to be a happy ending to the conflict on ATUN CLARO (see June 1999 Crow's Nest). The government authorities have backed the claim of the Industry members that only Yellowfin should be used in the preparation.

In Italy, the importation of canned tuna is 8.5% less in volume for the first 2 months of 1999. Only Senegal and Ivory Coast have slightly increased their deliveries of large institutional can format.

The NMFS "Proposed Regulations for Fishing on Dolphins" was published in the Federal Register on June 14, 1999. These regulations would allow the entry of yellowfin tuna into the United States under certain conditions from nations signatory to the International Dolphin Conservation Program (IDCP) that otherwise would be under embargo. It would also allow U.S. fishing vessels to participate in the fishery in the ETP on equivalent terms with the flag vessels of other IDCP signatory nations. The "dolphin safe" definition for use on tuna product labels would also change. General requirements are proposed to ensure adequate tracking and verification of tuna imports from the ETP. Comments on the proposed regulations must be received by the NMFS on or before July 14, 1999. After the public hearings are held, it will probably take another 30 days before the final regulations are published. The tuna embargoes cannot be lifted until the new NMFS proposed fishing regulations and the tuna tracking regulations are in effect for fishing on dolphins.

The Albacore tuna market was on the upside through the end of May but now has weakened. In AprilMay, StarKist, Chicken of the Sea, and Bumble Bee bought a total of about 7,000 short tons of Japanese Pole & Line albacore +22lbs for $2,300 per short ton. The June longline albacore price for Samoa was $2,350 per short ton but July prices have not yet been set. The July price may go down by about $100 or more. The longline albacore price for Puerto Rico is currently $2,650 per short ton for July deliveries but for August it may go down $100 to $200 per ton.

The Jig boat albacore season has just begun on the West Coast, and the first boats started delivering in June. The average size of the albacore last year was l3lbs. The price on the West Coast this year was set at $1,600 per short ton, exvessel. The buying stations will add about $125 per short ton for their handling costs, so the price at the buying station is about $1,725 FOB West Coast. The price in Samoa for direct deliveries has been agreed at $1,950 per short ton.

In Spain, focus on albacore tuna from Bay of Biscayne and Cantabnia is directed towards the ICCAT recommendations of 650 Spanish boats to participate but the quota allowed for 1999 will be reduced from 27,500 metric tons to 22,000 metric tons in 1999.

CASAMAR would like to apologize to the United Tuna Cooperative (UTC) for the error made in last month's issue of the Crow's Nest.

Please note the following correction in the June 1999 issue of the Crow's Nest:

The United Tuna Commission (UTC) referred to in the first paragraph should have been: The UNITED TUNA COOPERATIVE (UTC).

The United Tuna Cooperative is a group of 19 U.S. flag vessels formed in November of 1998 with the purpose of promoting, fostering, and encouraging the intelligent and orderly marketing of its member's fish catch. The managing director of the group is Mr. Paul Krampe, former Senior VicePresident of Vancamp Seafoods. UTC can be contacted at: United Tuna Cooperative, 2535 Kettrier Blvd Ste 3B2, San Diego, CA 92101. Tel (619)2381838 or Fax (619)2381708.

Past Issues of the Crow's Nest

Crow's NEST is provided by CASAMAR to its customers for their information only. CASAMAR is not responsible for any errors or delay: in the content or for any actions taken in reliance thereon.