The prices for skipjack tuna in the canning hub of Bangkok, Thailand are continuing to firm, with deals done for delivery in September at around $2,100-$2,150/t per metric ton.

Three gave the level of $2,100/t with a fourth, from a fishing company, giving the slightly higher level.

This is up from around $1,970 in August but, unusually, still around $100/t behind the level being paid in Manta, Ecuador, the main canning hub in the eastern Pacific, This is causing skipjack to be shipped from the western Pacific to the east..

Traders had pushed for $2,150-$2,300/t for September, but were forced to back off this level, said one source who declined to be quoted by name, a US-based tuna sector veteran .

“Raw material supply is less than abundant; certainly less than what is needed to support a reduction in raw material prices,” said a second executive with a large trader, also not wanting to be quoted by name (source B).

“There is not much fish around. Catching is slow in the western and eastern Pacific, as well as the Indian Ocean. Prices in Manta are even higher than Bangkok, so fish is going from west to east,” said one source, with a large tuna trading company, who spoke under an agreement of anonymity (source C).

“Tuna on reefer carriers is moving from the western and central Pacific to Latin America, including Ecuador. This explains the fact that the price of skipjack in Manta is higher than in Bangkok -- $2,200 versus $2,100 [per metric ton]. The cost of freight from the transshipment ports is higher to Ecuador than to Thailand,”

With the closure on catching on fish aggregation devices (FADs) in the western and central Pacific Ocean running for three months from July to September for some vessels -- and up to the end of October for others -- as well as one of the two annual “vedas” in the eastern Pacific, supply is set to remain tight, sources said.

Also, in the Indian Ocean (IO), there are concerns that the quotas on overfished yellowfin will also hit skipjack catches, as it’s hard to catch yellowfin without also landing young skipjack. In the eastern Pacific, new, more stringent conservation measures have also been brought in. 

“Fishing has been very poor in the ETP [eastern tropical Pacific] this year. Also, there is some concern that the quota on yellowfin catches [in the IO] will have an impact. It could shut the fishery down,” source C told. “Also, there is the FAD fishing closure in the western and central Pacific.”

In the western and central Pacific, the FAD closure will run until September for all boats and until the end of October for many, he said. “Boats can either accept a limit on the amount of FAD sets they can do, or they have a four-month closure and unlimited sets.”

The industry is counting on the FAD season starting in November, but this will not produce fish until later in the year, said source D, an executive with a large fishing firm.

If the ETP and IO are closed, this is going to continue to leave the market short of fish.

“I feel the price will continue to rise until later in the year. Then, when supply picks up, it will come down,” said source C, who is with a trading firm.

“I see $2,200-$2,350/t at the top,” said source D. “Demand is coming back in the EU and the weaker USD allows buyers to balance.”

Source B, also with a trading firm, said the situation means buyers are uncertain and holding off.

“As you would image, the market is unstable at these high levels as finished good buyers are reluctant to replenish or build inventories out of concern of making a procurement mistake,” he said. “Minimizing purchases and waiting for a decline in the price of raw material seems to be everyone’s near term strategy.”