Tuna Market Slump Continues as Red Sea Crisis Drives Canned Orders to Ecuador

The tuna market, particularly the Bangkok tuna (also known as skipjack tuna) prices in Thailand, has been experiencing a prolonged period of decline. In February, the prices in Bangkok were recorded at $1,400 per ton, while in Manta, Ecuador, they stood at $1,450 per ton. The continuation of the Red Sea shipping crisis has further exacerbated the situation, leading to a potential decline in Thai prices and stability or even an increase in Ecuadorian prices.

The Red Sea crisis has had a severe impact on the Asia-Europe shipping routes, causing a significant surge in transportation costs. Many cargo ships have been rerouted via South Africa, driving up the costs of refrigerated containers in the region. Simultaneously, Ecuador, being one of the major global tuna processing centers, has emerged as a more cost-effective choice during this period of low raw material prices. As a result, numerous orders have been redirected from Asia to Ecuador.

Unlike the Suez Canal, the shipping route from Ecuador to Europe bypasses the Red Sea, avoiding the freight increase issue experienced in the region. Consequently, European orders for loins and fillets have primarily shifted towards South America, with Ecuadorian processing facilities entering a busy production cycle. Although the Panama Canal also faces some difficulties, primarily due to drought issues, they have not significantly impacted freight costs.

In terms of fishing, the Western and Central Pacific regions have maintained good production levels, with each vessel catching between 40 and 80 tons of skipjack tuna. Due to strong supply, prices may further decline or remain at a low level.

With the approach of the Chinese New Year holiday (on February 10th), the supply from Chinese fishing vessels is expected to decrease. However, in Thailand, the Chinese New Year does not have a significant impact on production, and factories will continue their operations. Industry insiders predict that Thai prices may decrease to $1,350 per ton in March, mainly due to ideal production levels and smaller-sized tuna specifications. The transshipment ports in the Pacific Island countries have entered the peak season, resulting in increasingly limited available cold storage facilities.

In Ecuador, canned tuna manufacturers have witnessed a significant increase in sales, coupled with robust fishing yields and stable prices. Last week, there was an increase in catches in the East Pacific, with skipjack tuna accounting for approximately 70% of the total catch. The majority of expectations suggest stability or an upward trend in prices, with a possibility of reaching $1,500 per ton in the second week of February.

In the Indian Ocean, the Seychelles delivery prices hover around €1,400 per ton (FOB). Fishing yields are moderate, with daily catch per vessel ranging from 20 to 50 tons. However, due to the Red Sea crisis, industry insiders anticipate a slight decrease in Indian Ocean skipjack tuna prices.

In the Atlantic region, it is currently the three-month fishing ban period for Fish Aggregating Devices (FADs). During this period, vessels are only allowed to catch 5-20 tons of yellowfin tuna, most of which is frozen at -18°C and not used as canned tuna raw material. The price of skipjack tuna in the Atlantic stands at €1,400 per ton, with low production levels.

The trade of skipjack tuna in the European market remains sluggish, with prices ranging from €1,700 to €1,750 per ton. The specific transaction prices are linked to Indian Ocean and Atlantic prices, as well as freight costs. Some major German customers have signed long-term contracts with suppliers from Ecuador and the Philippines, which helps offset the downward pressure on prices caused by increased production.

The tuna market continues to face challenges as the Red Sea crisis influences shipping routes and transportation costs. As a result, canned tuna orders have shifted towards Ecuador, with expectations of stable or even rising prices in the near future. It remains to be seen how these market dynamics will evolve and impact the global tuna industry in the coming months.