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Dr Chanintr Chalisarapong
Chairman of the Tuna Packers' Group, The Thai Food Processors
Association
Advisor to www.FoodMarketExchange.com
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| Published
on July 20, 2001 |
The 4th WTPO resolution
Bangkok (July 18, 2001) - There are two key issues that
are important to all parties involved in the tuna industry.
Firstly, it is vital that prices are stabilized at a level
that is acceptable to boat owners, packers and distributors.
Secondly, we propose that the industry focus on ensuring
that the consumer is offered high-quality products in
order to promote consumption globally. This concept should
be fully supported by boat owners, packers and distributors.
Controlling Supply to
Stabilize Prices over the Long Term
We must support the efforts to balance supply and demand
through a 50-per cent reduction in catching activities
over the next 90 days. It is important that we try to
stop speculators from trying to exploit this news by attempting
to force up prices to a level that the market finds unacceptable.
A similar situation took place back in March when the
price of skipjack jumped too quickly (from US$ 400 per
metric ton to $ 950 per metric ton in a three-month period).
This kind of situation hurts the industry as a whole,
particularly packers in Southeast Asia. Many packers ended
up with an overhang of costly inventories, which forced
them to cut their production. This led to a large reduction
in demand among packers, which subsequently led to an
oversupply. The result of this was that the price of tuna
fell sharply to $ 700 per metric ton.
The long period at $ 400 per metric ton in 2000 was destructive
for boat owners, just as the leap of close to 150 per
cent over a three-month period this year was devastating
for packers. We favor a stable and sustainable price that
is acceptable to boat owners, packers and the market as
a whole.
It is unrealistic to refer to 1997's $ 1,200 per metric
ton in the current context. Tuna-producing nations have
faced a host of challenges over the past five years. Indeed,
some countries' currencies have fallen by up to 40 per
cent in value against the U.S. dollar. It is also just
as unworkable to consider $ 400 per metric ton, which
would force many boat owners to go bankrupt and destroy
the whole upstream tuna industry.
We feel that tuna producing nations should be able to
fully optimize their production capacity. In order to
achieve this, packers need prices of raw materials to
be stable and realistic so that they can produce high-quality
products at prices that are acceptable to the market.
So just what could be considered to be an acceptable price
for the industry as a whole? We believe that a price range
of between $ 650-850 per metric ton (Bangkok price) for
a reasonable period of time would be acceptable to all
parties in the industry. Any volatility within this guide
price range would largely depend on catching levels in
the Pacific Ocean, which account for more than 60 per
cent of all catches. It would also depend on whether or
not WTPO member states strictly adhere to the catch reductions
agreed upon at the Taiwan meeting.
Boosting Demand by Providing Quality Products
We fully support the recent resolution to promote tuna
consumption worldwide. However, success will depend on
the joint efforts of three parties - boat owners, packers
and distributors.
Firstly, boat owners need to ensure that packers are supplied
with high quality fish. Mixing low quality fish with high
quality fish only serves to lower overall standards. This
leads to financial losses, as well as souring business
relationships. If boat owners ensure purse seiners are
properly maintained, enforce good catching practices,
and ensure that handling and management during transportation
are of a high standard, factories will likely receive
high quality raw materials. This in turn would ensure
that packers turn out high quality products with good
yields, which would result in stronger sales. Packers
would then be more than happy to pay a premium for high
quality raw materials, creating the ideal 'win-win' situation.
Secondly, packers must apply the concept of 'total quality'
to all levels of the production process in order to ensure
that product quality is of a high standard. Packers should
not just encourage boat owners to maintain or improve
the quality of raw materials, but also urge importers
to encourage buyers to purchase quality products at a
reasonable price, such as canned tuna without HP, or canned
tuna with high drained weight, rather than opting for
products with excessive levels of HP, which can negatively
effect product quality. Packers must also work together
with their trade partners in order to develop value-added
products or new innovations such as tuna in a retort pouch.
It is worth noting that tuna to be used in pouches must
be of the highest quality. If inferior raw materials are
used, this will hit consumer confidence. These premium
products can ultimately enhance the real value of tuna,
assuming quality raw materials are provided.
Finally, it is also worth looking at the GMO issue. Buyers
and consumers in Europe, Canada, Australia and the Middle
East are shying away from product that contain GM ingredients,
such as GM soy protein. This is encouraging packers to
produce higher quality products. U.S. distributors are
working with the food authorities to improve canned tuna
standards, and we fully support such initiatives. In addition,
U.S. distributors are spending a lot of money on TV advertising
campaigns to promote the new pouch product and value added
tuna products. We also fully endorse these campaigns.
It is worth pointing out at this point that an improvement
in consumption levels of tuna products can only be achieved
if the consumer is supplied with a truly high quality
product.
Essentially, the WTPO is likely to lose credibility if
its members fail to respect last week's agreement, while
the industry as a whole will be badly hurt if we allow
any party to take advantage of the situation by unnecessarily
speculating or manipulating the market in an effort to
artificially increase price to unrealistically high levels.
Once we experience a long period of price stability, as
well as real commitment among boat owners to supply packers
worldwide with high quality fish, we will be able to declare
that the WTPO resolution has had a really positive impact.
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