Doubling in tuna price an incentive to mislabel

The horse-meat scandal has highlighted the pressures that rising commodity prices and demands by consumers for ever cheaper food has had on some parts of the meat supply chain. Sprawling and disconnected supply chains failed to act as disincentive for unscrupulous agents along that chain to substitute horse for beef and thereby increase their margin. The problem is likely to be much more widespread than just meat. A recent survey of fish samples in the US by non-profit group Oceana found significant evidence of mislabeling including 59% of tuna samples.

Similar to meat products, tuna prices have seen significant price increases over the past few years. Tuna prices (Skipjack tuna, C&F Bangkok benchmark) doubled between 2009 and 2012 reaching an all time high of $2,280 per ton in September 2012.   Tuna prices fell  back to $1,190 per ton in December only to be followed by a further surge to $2,150 per ton in February 2013.

Poor fishing in the Indian Ocean and the Western Pacific are partly to blame for the current high prices. Large areas are closed to fishing with fish aggregation devices (FADs) in the Western Pacific from July to early September each year to prevent over fishing. As of July 2012 catches of skipjack tuna in the eastern tropical Pacific (ETP) were down almost 30,000 tons on the previous year, according to Globefish. Although supplies improved in the fourth quarter of 2012 they have not compensated for increased demand from Asia, North Africa and the Middle East.

A possible six month FAD ban in the Western Pacific in 2013, combined with restrictions from the Parties of the Nauru Agreement (PNA) on deepwater fishing fleets’ operation, pressure from NGOs to reduce effort and closures from the Inter-American Tropical Tuna Commission (IATTC), mean that supply could be even tighter in 2013. The likely increase in pressure facing tuna processors was highlighted by a US based trader in late 2012, who forecast that prices were likely to average $2,600 to $2,700 per ton in 2013. According to Undercurrent the situation is particularly acute for the large US brands as retail prices in the US market are much lower than Europe so escalating raw material costs are proving ever difficult to pass on to consumers.Tuna price chart

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