Sunday, September 07, 2008 Rough times for tuna industry By Edwin G. Espejo
GENERAL SANTOS CITY -- Local tuna producers here are raising the flags of alarm, worried over rising fuel costs, dwindling tuna catches, and constricting fishing grounds.
"We are raising this alarm because the volume of landed catch has dramatically reduced in the first semester of this year," South Cotabato Boat Owner and Tuna Association president Domingo Teng said.
Teng made this statement a week before the Socsksargen Federation of Fishing and Allied Industries again hosts the 10th Annual Tuna Congress.
It also came after General Santos City Fish Port Authority manager Mike Lamberte revealed that landed tuna catch in General Santos City from January to June has dramatically dropped by as much as 34 per cent compared to the same period last year.
Amid the revelations, Teng also said many fishing vessels have been grounded because of rising fuel costs.
"Fewer vessels going out to the high seas mean lesser catch," Teng said.
Last year, industry players blamed rising global temperature as one of the primary causes of reduced catch.
This year, they put the blame squarely on high fuel costs.
Compounding the problem is access to international fishing grounds as neighboring Indonesia has repeatedly ignored Philippine efforts to establish bilateral fishing agreement between the two Asean countries.
Sunshine industry
Over the last two decades, the tuna industry has been one of the few bright sectors in Philippine economy.
It has generated an annual average of $280 million in export revenues and has positioned itself as the world's second biggest catcher of tuna at 400,000 metric tons a year, next only to Taiwan and earned the distinction as the third largest producer of canned tuna products.
Only Thailand and the United States ranked higher than the Philippines in that category.
According to the Socsksargen Federation of Fishing and Allied Industries (SFFAI), the industry has generated 120,000 jobs in General Santos City alone.
Six of the country's seven operating canneries are located in General Santos employing around 15,000 regular and casual workers and 2,000 more in the fresh and processed tuna production.
Fifteen thousand workers are likewise finding work in over 1,500 fishing vessels of purse seine operators while over 50,000 are dependent on tuna handline fishing operations.
Other ancillary industries employ the rest of workers dependent on the industry.
The United States, European Union, and Japan remain as the main export destination of canned, fresh, and processed tuna products coming from General Santos City.
Resilience
But the dwindling catch over the last three years has severely affected production so much that in the last quarter of 2007, most canning plants in General Santos were operating at less than half their capacity.
Mariano Fernandez, president of the Tuna Canners Association of the Philippines, said they reduced production to one shift a day instead of three shifts. "There are no fishes," he said back then.
The six canning plants in the city have a combined daily production capacity of 800 metric tons, the biggest of which is Gentuna, producer of the Century brand tuna products.
But because tuna is a commodity product, low supply has also driven export prices up.
According to industry sources, export prices went up by as much as 50 per cent when supply of raw materials ran short.
Other canneries, such as Philbest, have resorted to importing frozen tuna to keep up with their export supply contracts in the US and Europe.
"We are not looking at reducing the production volume. We are looking towards other sources outside our usual suppliers," said Annie Cabreros, production manager of Philbest Canning Corp., which cans 150 tons of tuna a day when operating in full capacity.
She said they have ordered frozen tuna from Taiwan and from its sister corporation, which maintains fishing operations in Papua New Guinea.
A bright note, however, is that tuna canneries here are again operating in near full capacity with tuna landing over the last two months slowly returning to normal.
They are hoping this would further remain steady in the coming months.
Domingo Teng said the industry's competitive advantage over other canned tuna producing countries has also kept the tuna industry afloat.
"Our proximity to the fishing grounds, lower production cost, and Filipino ingenuity are allowing us to compete with Thailand and other tuna producing countries in the Asia-Pacific region," he said.
Industry efforts
While not lacking in support from government, industry sources said the Arroyo administration could still take extra steps to ensure the survival of the industry.
"We have to hasten the establishment of bilateral agreements with other countries east of the Philippines while at the same time pursue negotiations with Indonesia," Teng earlier said.
He cited the island countries in the Western Pacific region such as Micronesia, Solomon Islands, Palau, and Papua New Guinea.
Along with Indonesia and the Philippines, these Western Pacific countries are located in the tuna migratory path.
"We also urged the government to solidify its commitment to WCPFC by paying its annual dues," Teng said.
WCPFC stands for Commission for the Conservation and Management of Highly Migratory Fish Stocks of the Western and Central Pacific Ocean of which the Philippines is a signatory and member country.
To offset current industry woes, tuna producers here have resorted into pouring capital for investments in countries where tuna fishing grounds are located.
Teng said that along with eight other Filipino businessmen that included Marfenio Tan of San Andres Fishing Industries, they recently bought a tuna canning plant in Indonesia formerly owned by Purefoods Corporation. The move will enable them to fish in Indonesian waters.
But this came with a cost.
"We have to re-flag our fishing vessels and employ Indonesian workers and crew members," Teng said.
Hopefully, he added, Indonesia will lift its ban on exports of fresh tuna to the Philippines.
"Indonesia does not have the infrastructure to absorb all catches of its fledging tuna industry, Teng revealed.
"It could take over decade before Indonesia could build the infrastructure that will match what we have now."
In addition to Teng, who is president of TSP Fishing, other Filipino tuna producers like Damalerio Fishing and RD Group of companies have bought and built canning plants in Indonesia and Papua New Guinea respectively.
This practice is fast becoming an industry standard as tuna producers move to gain more access to fishing grounds even if this means capital flight and loss of job opportunities for Filipino workers.
Fishing boat operators have also slowly converted their engines from diesel to liquefied petroleum gas (LPG) powered. Industry players here said the government should provide incentives to those who want to convert their fishing vessels.
Over the last 10 years, big purse seine operators have also resorted to buying 20 to 30 year old Japanese passenger and cargo ships and refit them into becoming fishing vessels.
Along with it, some purse seine operators have built their own shipyards and dry-docking facilities.
Industry survival
Despite the many problems the tuna industry is now facing, Teng said they will survive.
"We are in rough times but we are resilient," he said.
Unlike in Thailand where canneries are closing down, Teng said Philippine tuna canneries are still running.
"What we lost," he added, "are compensated in other forms such as increase prices."
But he concedes that a number of small fisher folks are affected by the ongoing problems in the industry.
Still, he said, they see a rebound in the years ahead. He might as well cross his fingers, too.
