Thailand Tuna insights

Core Tip: As Israel's war on Gaza continues to escalate, the situation in the Middle East is turbulent. This geopolitical conflict is driving a surge in demand for canned tuna in the global market. The Thai Ministry of Commerce pointed out that due to the situation in the Middle East, the demand for basic food in the region has increased significantly, and canned tuna produced in Thailand has become an important supply in this region.

A Thai source said that the fishing situation in the Western Pacific was poor, and some ships only caught 20-25 tons a day. Shipowners quoted prices at $1,400-1,450/t, and canneries tried to keep prices down to $1,350-1,400/t. Whether the rising trend of raw materials will continue remains to be seen, depending on the order situation during the SIAL exhibition held in Paris, France from October 19 to 23; historically, prices usually fall in October and November. Thai canneries generally sign contracts for the first quarter of next year before Easter. If demand is good, raw material prices will continue to remain stable. Another US source said that a large Thai cannery purchased at $1,400/t, and the price of small and medium-sized factories was slightly higher. The main reason for the price increase was the reduction in raw material supply; in the Philippines, the price of skipjack tuna was $1,400/t, close to the price in Thailand. In addition, in Manta, Ecuador, the price of skipjack tuna raw materials rose to $1,450-1,500 this month. 00/t, while the Inter-American Tropical Tuna Commission (IATTC) fishing moratorium will end this week. A European source expects that Ecuadorian prices may not fall soon, as canneries are selling well and profit margins are supported. On the other hand, Ecuador's energy crisis has affected factory operations. In late September, a nationwide power rationing strategy was implemented, with power outages lasting up to 12 hours a day. Canneries equipped with diesel generators can operate normally. Spanish skipjack prices are stable at €1,500-1,550/t, and yellowfin tuna prices are at €2,550/t. At the Conxemar exhibition in Vigo, Spain, a Chinese company quoted 10-20kg whole fish FOB at $1,650/t and fillet FOB at $3,950/t; whole fish CFR at $1,850/t and fillet CFR at $4,150/t; yellowfin tuna fillet at $5,600/t.

From the end of July to the beginning of August, the price of Thai tuna was as high as $1,550/ton, and fell to $1,450/ton in mid-August. The price has been falling in the past two months. UCN sources believe that the current downward trend shows that Thai canned food manufacturers hope to keep prices at a very low level in order to gain more cost advantages in future order contracts, especially to fight a price war with Ecuador. In addition, the supply of fishing in the Western Pacific is relatively stable, especially the strong production in the waters of Papua New Guinea, which has brought more downward pressure on prices. A European buyer said that the recent transaction prices in Bangkok were $1,280-1,290/ton, and have not fallen below $1,250/ton, and the downward trend is more obvious. Another Asian source said: "We heard that Thai processing plants lowered the price to $1,250/ton, but were resisted by ship owners. Thai factories want to compete with Ecuador, so Trying to push prices lower, but Thailand's ability to manipulate the market is weakening, and some tuna will be transferred to China at a higher price." In contrast, the European skipjack market has been sluggish because of the summer vacation and slow trading volume, with prices hovering around €1,600/ton in southern Europe. In Manta, Ecuador, vessels are currently trading at $1,350-1,375/ton. There are signs that prices are unlikely to continue to fall, as the fishing moratorium in the eastern Pacific is still ongoing and cannery orders are relatively large. A Latin American industry insider said that if Thai prices continue to fall and the price gap with Ecuador widens, then some orders will flow from South America to Asia. He predicted that Ecuadorian prices will rise to around $1,450/ton in September. In addition, yellowfin tuna prices are facing downward pressure against the backdrop of strong production in the Indian Ocean. Currently, Spanish yellowfin tuna prices are at €2,550-€2,600/ton.