Ecuadorian tuna firms plan to take advantage of the new free trade agreement with the EU and the fact that prices in Manta are cheaper than in Bangkok to recover profit margins, after promising start of the tuna season in the country.

Firms plan to increase sales and sell more products with added-value, regaining market share from Asian competitors.

The free trade agreement with the EU, which is in place since the start of this year, allows Ecuador to benefit from improved access for its main exports to the EU, such as shrimp, tuna and other seafood, among other agriculture products.The agreement has eliminated a the import tariff for Ecuadorian tuna exported to the EU, whcih previously was 4%, 

"Ecuadorian sales to the EU will increase, if fishing [levels] supports them," one source from one large producer noted. He added that his firm also wanted to increase the sale of products with added value.

The source pointed out that at present Ecuador was selling "a lot" of the frozen, pre-cooked loins to Europe, which is approximately slightly over 30% cheaper than canned tuna. 

"This is a moment in which we get the opportunity to recover margins, because the Ecuadorian tuna industry comes from three years of low profits," another of the sources noted. In this time, despite increasing the overall production, we faced lower profit margins, because of increased competition from Asia, where processing is cheaper than in Ecuador, he added.

Most Ecuadorian firms currently sell more of 60% of their production to Europe, about 30% to Latin American markets, where they face increasing competition of Asian tuna products, particularly in Chile and Peru, sources said.

Exports to the US represent less than 2% of Ecuadorian production, as the US tax on Ecuadorian loins is above 26% and for canned tuna over 30%, according to sources.

Ongoing tuna season

Most tuna vessels returned to fish between Jan. 18-24, following the end of the veda ban.

Skipjack prices in Manta currently range between $1,525-1,600 per metric ton, with most canneries quoting $1,600/t or slightly above, according to sources.

Tuna fishery is currently good in the south, closer to Peruvian and Chilean waters and quite bad in the west area, closer to Colombian waters, several sources pointed out last week.

One of the sources added that some of the smaller vessels that had gone fishing after Jan.18 were already returning to the shore, having already reached full capacity, which was promising. Normally vessels take about two months to reach full capacity.

Another source noted last week that other vessels, which had reached 60-70% of their capacity, should also return to the shore to land their catches in one-two weeks.

More than 50% of tuna vessels did not fish during the veda period in December and January, which caused an increase in skipjack prices from approximately $1,450/t, according to one source.

Demand from processors in the country is currently relatively strong. Tuna catches in the ongoing season are promising, which should maintain prices at around the current level, according to sources.

Good catches should restore the good balance between supply and offer, although we do not know what will happen in a couple of weeks, one source noted.