At the 2nd National Tuna Congress which was held recently in General Santos City, fisheries specialist Dr. Stanley Swerdloff said the current global tuna crisis will almost certainly result in a worldwide shakeout.
"The least competitive fleets and processors will drop out, and those companies with imagination and deficiency will expand," he added.
For two years, the global tuna industry has faced volatility and financial crises in the canned tuna sub-sector. Current statistics show that purse seine catches from 1998 to 1999 resulted in an oversupply of canned tuna.
The current trend of dropping prices of canned tuna to stimulate consumer demand in the US and Europe has resulted in modest, sometimes low increases in sales.
Swerdloff, who is senior fisheries consultant of the USAID-funded Growth with Equity in Mindanao (GEM) Program, said the record purse seine landings of the past two years produced more canned tuna than the market could consume.
"As a result, the price of canned light meat tuna plummeted from $26 per case to less than $14 per case," he pointed out.
He added that those countries with the best combination of competitive advantages will come out ahead, compelling weaker producers to drop out of the global industry.
"Government plays a vital role in the reorganization and modernization of this sector, as it determines the extend of support to be provided to its tuna industries," said Swerdloff, who added that a strong working partnership between the business community and government has given the Philippine tuna sector an edge.
A number of officials presented papers at the tuna conference on government efforts to assist the industry, including policy specialist Arlene Macaisa of the Department of Foreign Affairs, who spoke on the status of bilateral and multilateral negotiations for fishing access.
The world tuna industry is divided into three major sub-sectors, the first being the traditional fishery sector, which supplies tuna for the domestic markets.
This sub-sector generally catches the smaller types of tuna and utilizes traditional fishing technologies. This sector is considered relatively stable, balancing supply with local demand.
The second sector deals in the Japanese-created market for sashimi, or raw fish, and also has been relatively stable for a number of years, with price variations based on the strength of the Japanese economy. A new technology for mass-producing frozen sashimi and tuna steaks was recently developed in the Philippines, creating a new consumer demand.
Purse seine-canned tuna enterprises belong to the third sector, which is considered the most complex, due to the fragmented set-up of processing areas, consumer markets, and the scattered fishing grounds.
One of the major opportunities for the local tuna industry is the modernization and stabilization of pumpboat, or handline, fishery. On simple wooden-hulled boats equipped with outriggers like the traditional bangka, fishermen use handlines to catch the highest-grade sashimi, sold for small fortunes in Japan and other countries.
Swerdloff explained that the tuna handline operators need to improve both catch rates and fish landings, and study the potential of setting up bases in the Pacific Islands such as Micronesia and Papua New Guinea.
Another possibility is for Philippine tuna canning operators to enter the China market, which has about 1.7 billion consumers. Thailand alone has tried to market canned tuna in China, the only country with a real market potential for this product.
Philippine-developed frozen sashimi and tuna steaks are rapidly gaining a foothold in US and European markets. This sector can be expected to expand dramatically, given that the Philippines-based processors continue to give high priority to product quality, Swerdloff said.
Already, Philippine processors are banding together in an association, to address quality standards and other issues.
"Once the Philippines is recognized for having consistently high product qualities, the country will have a chance to corner the market for this product, and this will mean a ready market and steady prices for Philippine tuna," Swerdloff added.
In the Philippines, fishing is a P50-billion industry, contributing about four percent of the country’s GNP. General Santos is the second largest fish-producing area in the Philippines and the largest producer of tuna. Its daily landings of 300 metric tons bring in an annual income of $130 million from exports.
The 2nd National Tuna Congress was organized by the Socsksargen Federation of Fishing Associations and Allied Industries (SFFAAI) and drew more than 300 participants from the region’s tuna supply chain, including purse seine operators, processors, buyers, and members of small fishing organizations.– GEM Program