CASAMAR, INTL.
Inside the Tuna Fishing Industry

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.

May 1999

Tuna Market Reaches a Plateau

Skipjack prices have completed a phase of recovery and now comes the first test between the buyers and sellers since the market recovery started this past December.

In April Thailand celebrates Songkran (known as the "Water Festival ") this coincides with Thai New Year's and the New Lunar Year. This time always seems to provide the "market makers" a significant opportunity for testing the market conditions.

Just prior to Songkran, Thai buyers refused to move prices higher. Local "Tongol" fishing is in full production while reefers are scheduled from the Western Pacific, Eastern Tropical Pacific and Indian Ocean.

Fishermen are said to be receiving $770/MT In addition to the supply side there is continued rumors of softness in the European canned sales.

There is no speculation of further softness taking the market to the $850 level.

Sellers show no signs of panic as fishing remains mixed in the Western Pacific. Looking deeper into vessel catches in the WP we find the U.S. fleet has had good fishing with typical "FADS" being the primary source of their catches.

In general the U.S. vessel have experienced overall better fishing than the Taiwanese and Koreans for the past several weeks. The Taiwanese and Korean total production has been curtailed by the number of vessels on the fishing grounds.

Effective April 1, 1999, Paul Krampe became the Executive Director of the United Tuna Cooperative (UTC). Paul brings 20 years of industry experience to his new position.

The UTC continues to successfully move catches from their 20 plus member vessels to an array of countries. There is a clear pattern of catches being sold by UTC to markets that in the past were considered only markets of opportunity for the majority of the U.S. vessels.

American Samoa is still the preferred area for UTC deliveries but significant changes in StarKist procurement plans may force UTC to continue their strong moves to nontraditional markets. Prices in Samoa for Skipjack appear to continue to follow Bangkok pricing.

Starkist Samoa in the past years has been a primary buyer for the majority of the UTC members vessel catches. Now, Starkist's own fleet vertical integration program and their 50-70% reduction in Puerto Rican canned Light Meat production leaves little demand for the U.S. Yellowfin and Skipjack catches that had previously supported their Samoan production.

According to the import numbers it would appear that Starkist has helped offset the reduction in their Mayaquez production by substantially increasing their overseas canned procurement. StarKist is reported to be buying from two or three different Thai Packers at this time.

These changes could reduce the amount of reefer vessels moving from the Western Pacific to Puerto Rico. StarKist continues to use a reefer vessel for Albacore Storage in Pago Pago.

Fishing continues at record rates under La Nina conditions in the EASTERN TROPICAL PACIFIC (ETP). This year, according to IATTC April 19' Fleet Information catches are up 75,336 MT this is in comparison to the same period in 1998. After fifteen weeks the ETP Fleet catches have resulted in 69.2% increase up 41% on yellowfin and up 140.3% on skipjack.

It is interesting to note that there are Ecuadorian vessels that have made 2-3 back-to-back trips in under two weeks. The problem is, with the high catch rates comes low prices, skipjack has been down to around $600 per metric ton.

On top of low prices Ecuador is reported to be in its worst economic crisis in 70 years. Sucre exchange now has settled back to almost 9000-1, at times the black market was said to be 50-100% above this level. Ecuadorian vessels have been in search of U.S. Dollar markets to hedge against the currency problems.

Fishing has been primarily yellowfin in the EASTERN ATLANTIC. Reportedly catches have been fair/good over the past few weeks. European prices for Yellowfin remain soft. A new Dolphin Safe definition, Mexican fishing and an anticipated increase in canned sales moving towards the summer months, all could play a part in determining the near term future of the Yellowfin Market.

In the INDIAN OCEAN, catches of skipjack have been at a level where most of the fish is being sold to regional canners. The Seychelles facility is reportedly running at full production. Recent canner prices were said to be $830 per metric ton for skipjack.

Dramatic changes in the ALBACORE MARKET continue, upside pressure on prices from all regions.

Catch rates for high seas albacore vessels remain low. Japanese shashimi vessels return to their traditional shashimi fishing grounds before the spring albacore season gets underway.

Prices under these conditions could continue to move to the upside for some time to come. Already case good prices that have been at recent historical lows for White Meat will need a $5.00 plus increase per case to cover the change in fish prices. We will watch with keen interest to see the dynamics of this with the consumer. Remember recent shelf prices in some markets have been equal to or below certain Light Meat Packs.

South Pacific Fisheries produce low catches, most boats struggle to get in one trip. The original price was $1100 per short ton. The good news is, by the time the vessels were ready to deliver, prices were taken up retroactively to meet the market conditions. Jig Boat prices for the North Pacific fishing is $1550 per short ton.

Samoa Long Line albacore price for January to March were $1300 per metric ton then $1350 in April and now they are expected to be up another $100 a metric ton for May deliveries.

PACIFIC-WIDE MANAGEMENT OF TUNA AND BILLFISH-MHLC4 AND WHAT IT MEANS TO YOU.

Introduction

A ground breaking and highly significant meeting was held February 10-19 *in Honolulu, Hawaii that sets the stage for international regulation of high seas fishing throughout the central and western Pacific region. If you feel that your fishery won't be influenced by the outcome of this meeting, either because you fish under individual agreements with foreign countries or fish exclusively in high seas zone, then you really should read further. Global management and regulation of all fisheries has arrived.

Over 300 high level delegates from 17 Pacific Island nations and 10 large metropolitan countries came together at the Hawaii Convention Center for the Multilateral High Level Conference on the Conservation and Management of Highly Migratory Fish Stocks in the Western and Central Pacific; or the MH-LC4 as it is usually known.

Who is Involved?

The island states engaged in this process include the Cook Islands, the Federated States of Micronesia (Yap, Chuuk, Pohnpei, Kosrae), Fiji, Kiribati, the Marshall Islands, Nauru, Niue, Palau, New Guinea, Samoa (formerly Western Samoa), the Solomon Islands, Tonga, Tuvalu, Vanuatu, and the French overseas territories of French Polynesia, New Caledonia, Wallis and Futuna and the U.S. Affiliated islands of American Samoa, Guam and the Commonwealth of the Mariana Islands.

The so-called metropolitan countries with distant water or domestic joint venture fishery interests in the region who came to the table include Australia, China (mainland), Japan, Republic of Korea, New Zealand, the Philippines, Taiwan and the United States of America. These countries are often referred to as Distant Water Fishing Nations (DVrFNs). Representatives from France and Indonesia also participated in the process, as did official observers from several different countries and international research organizations.

Background to MHLC4

As the name implies, this was the fourth in a series of meetings: MHLC1 - held in Honiara, Solomon Islands, set the regulatory groundwork with a review of technical issues and the best available scientific information on the status of tuna and billfish stocks; MHLC2 - met in Majuro, Marshall Islands to further discussions and set June 2000 as a target date to implement the agreements; and MHLC3 - which was held in Tokyo in 1998 carefully reviewed draft articles to a document that outlined the goals, general provisions and justification for establishing regional management of pelagic fishery resources in the central and western Pacific region.

Other regions of the world's oceans have similar international organizations to look at regional management of tuna and other large pelagic fishes (i.e. billfish, oceanic sharks). These include the International Commission for the Conservation of Atlantic Tunas (ICCAT), the InterAmerican Tropical Tuna Commission (IATTC), the Commission for the Conservation of Southern Bluefin Tuna (CCSBT) and the newly formed Indian Ocean Tuna Commission (IOTC). Apparently the time for regional management has arrived for the central and western Pacific, which supplies the majority of fresh and frozen tuna products to the world.

The stage for this activity was set by the United Nations Convention on the Law of the Sea of 10 December 1982, or UNCLOS which had far reaching impacts on the exploitation and development of all oceanic resources by all members of the United Nations and established the rights of coastal states to fishery resources within their 200 mile exclusive economic zones (EEZs). A long and complicated trail of conventions and agreements have followed on from UNCLOS, the most significant of which was the United Nations Agreement on Straddling Stocks and Highly Migratory Fish Stocks of 1995.

Central to any discussion of fishery rights and EEZs is the concept of a high seas zones where fishing vessels have historically operated in an unregulated fashion as they were considered common ground and the fish inside these areas were up for grabs. While unrestricted fishing in high seas zones is seen as a birthright by many fishermen, problems arise with largescale resource assessments if fishing activity in those high seas zones is not reported or monitored due to the highly migratory and transient nature of tuna and billfish. To this end, in November 1995, President Clinton signed into U.S. law the High Seas Fishing Compliance Act of 1995 which established the United States as one of the first high seas fishing nations to act to support the Agreement to Promote Compliance with International Conservation and Management Measures by Fishing Vessels on the High Seas, which was adopted by the Food and Agriculture Organization of the United Nations (FAO). The MHLC4 established a regulatory framework to address regulating fishing activities in high seas zones as well as many other important issues facing the region.

Developments from the MHLC4 Meeting

The meeting produced a historic document, entitled the Draft Convention on the Conservation and Management of Highly Migratory Fish Stocks in the Western and Central Pacific Ocean (the Convention), the development of which began at previous MHLC gatherings. This document outlines the establishment of a new management and regulatory organization, which will be the Commission for the Conservation, and Management of Highly Migratory Fish Stocks in the Western and Central Pacific Ocean (referred to hereafter as the Commission). This organization will be similar in many ways to its sister organization, the IATTC that conducts research and management of oceanic resources in the eastern Pacific Ocean.

The Commission Area

Lines were drawn on the map that include most of the waters of the western and central Pacific. It is not clear if these boundaries are set or subject to change, but the Convention document is still in draft form. This huge area extends to the north along the 42°N line (west of the 180°) and north to 50°N (west of the 180E); then south along the 150° longitude line to 4°S, then follows the 130°W line southward all the way to 60°S; then westward to 141°E longitude. From this southwest point, the boundary runs north to include all of the eastern Australian and Papua New Guinea region, skirting north along the eastern boundary of Indonesia and the Philippines and then north to include the EEZs of the Republic of Korea and Japan; joining the 42°N parallel at the northeast comer of the Japan EEZ.

This is an immense region, with huge areas of high seas waters, particularly in the northwest, north and south central Pacific. It is notable that the Philippines and Indonesia were excluded from this management area and Convention, but apparently have agreed to adopt compatible management measures for highly migratory fish stocks that are shared with the Commission Area.

Which Fish and Fisheries?

The Commission will initially concentrate on skipjack, yellowfin, bigeye and albacore resources within the Commission Area and all fisheries currently exploiting these stocks.

However, all pelagic resources potentially fall within the regulatory framework of this Commission, such as swordfish, all marlin, spearfish and sailfish, wahoo, dolphinfish, etc. Also, the Convention is charged with the assessment of the impact of pelagic fishing on a non-target, associated or dependent species, which is a very broad definition of bycatch.

Commission Structure and Duties

The proposed Commission will be composed of one representative from each party to the Convention, a Scientific Committee and a Technical and Compliance Committee. A permanent organization composed of an Executive Director, appointed by the Commission and a small technical staff will be set up in a Convention member country to perform the administration of the Commission. The Scientific Committee will provide the scientific advice necessary to arrive at management decisions, and will be composed of representatives of Convention member states with significant input from the Oceanic Fisheries Program of the Secretariat of the Pacific Community and the IATTC as well as individual contractors.

The stated functions of the Commission are extremely broad and far reaching, based on the precautionary approach to maintaining pelagic fish stocks so as to ensure their long term sustainability, not maximum sustainable yield. Some of these duties will include the determination of total allowable catch (TAC) levels or total fishing effort within the Convention Area. Initially, the Commission will look at establishing provisional TAC levels for skipjack, yellowfin, bigeye, and South Pacific albacore. Of immediate importance to all distant water fishing nations; the Commission will be responsible for the determination of catch allocation within these TAC levels. Besides catch levels and fishing effort (how many boats, boats sizes, etc.), the Commission will have the power to regulate fishing seasons, fishing areas, minimum size of fish taken, fishing gear and which fishing methods are employed.

The Commission will also develop and coordinate a regional observer program for the collection of data necessary for the work of the Scientific Committee. Among other things, the Commission will take responsibility for coordinating matters pertaining to catch transshipment, vessel monitoring systems, surveillance, enforcement, boarding and inspection of fishing vessels.

Summary

The meeting agreed to finalize and ratify the Convention document by June 2000, which would establish the Commission and the proposed structure. Nothing has been set in stone, but the writing is far beyond being simply on the wall. In other words, most of what has been described here will become international law in the near future. Of particular concern to fishermen and fishing nations is the potential for concrete management measures, such as catch quotas, limited effort or limited entry, regulation of fishing gear or methods and the regulation of fishing activities in high seas zones. None of this will occur overnight, some may never develop, but some changes will surely result.

However, according to the Convention document, the past history of cooperation by distant water fishing nations could have a significant influence on how they are viewed by and incorporated into the system, including their level of catch allocation. For instance, fleets that have historically submitted accurate catch data, accepted regional observers, cooperated with scientific research and complied fully with regional and sub-regional regulations will be assured greater consideration than others will. In this regard, we would expect that fleets such as the U.S. South Pacific purse seine fleet, which cooperates very well with several Pacific Island states under the provisions of the South Pacific Tuna Treaty will become members in good standing within the new management regime.

At the same time, the Convention appears to provide preferential access and allocation to the smaller Pacific Island states whose harvesting capacity will likely increase in the near future. Still, the primary goal of the Commission will be the maintenance of fishery stocks at levels that will assure long-term, sustainable fisheries for all. Let's hope they get it right!


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.

Website for Tuna Fishing Supplies and Services
For more information on the Tuna Fishing Industry visit the Casamar Website at www.casamarintl.com for the nearest full-service and sales facility in your part of the world or the latest product designed specifically for the Tuna Fishing Industry.

[ Return to Casamar Home Page | CASAMAR Worldwide Directory ]