Friday, October 24, 2008 US economic crisis affects tuna sector
THE economic slowdown in the United States has affected the canned tuna industry in General Santos City that may force factories "to stop operations," a top industry leader said.
Mariano M. Fernandez, president of the Tuna Canners Association of General Santos, said that "factories warehouses are piling up" with canned tuna due to the financial turmoil that initially hit the US and has been spreading globally.
"The orders [from the US] have stopped. There's no more order from us for November. Our warehouse is getting full. We may be forced to "stop" operations if this trend will continue," he said.
Fernandez, also the manager of the Ocean Canning Corp., said that local canning factories are on a wait-and-see mode as termination of workers looms if things won’t improve.
Dubbed as the "Tuna Capital of the Philippines," General Santos City hosts six of the country's seven tuna factories, which also exports to Europe aside from the United States.
Canned tuna is the top export earner for Central Mindanao, where General Santos is the economic hub with its facilities such as sea and air ports, communication and banking institutions.
The US accounts for around 24 percent of the canned tuna export for the first half of 2008, according to data furnished by the Department of Trade and Industry (DTI)-Central Mindanao.
Canned tuna export rose to $70.6 million in the second quarter of 2008 from $46.9 in the first quarter, bringing the first half total to $117.5 million, the government agency said.
The European Union was the top canned tuna destination for the first semester of 2008 with a value of $70.8 million at a volume of 24.6 million kilos, the regional trade office said.
For the six months to June 2008, canned tuna to the US fetches sales of $27.9 million at a volume of 11.6 million kilograms, Trade department's data showed.
For the same period last year, the US took in $35 million worth of canned tuna at a volume of 17.3 million kilos, the regional Trade office's earlier report said.
But if the canned tuna sector is allegedly reeling from the US economic slowdown, it is different for producers of mature or large tuna, particularly the yellowfin variety.
The US is a major market for local producers here of fresh whole yellowfin tuna, aside from Japan.
"Demand has not slowed down since the financial turmoil hit the US," said Roger R. Lim Sr., chief executive officer of GenSan Aqua Traders.
Dubbed as the local "Tuna King," Lim's company sells fresh round yellowfin tuna to the United States caught through the traditional handline or hook and line fishing.
According to industry data, the handline sector has an estimated annual value of P4.5 billion. It is composed of 2,500 handline boats and employs at least 40,000 fishermen, with an estimated annual landing of over 30,000 metric tons of high value tuna.
Lim, also the vice president of the Alliance of Tuna Handliners, warned that their sector maybe affected next year if the global financial crisis will not be stemmed.
An indicator that American demand for fresh whole round tuna remains unchanged is the continued stable demand for frozen cut tuna parts there, he explained.
Lim said that fresh whole tuna is popular among the middle and upper American families, while canned tuna is to the lower economic classes.
American national John Heitz, export chief of GenSan Aqua Traders, also said that fresh whole tuna demand in the United States is still unaffected by the financial crisis there.
"Consumption of fresh tuna in the US is still good. In fact, demand outweighs the supply," Heitz said in a separate interview, attributing the supply shortfall to overfishing.
He noted that price of export-grade fresh whole tuna at the fish port complex here has risen in the past weeks, surging by about 25 percent.
The buying price of fresh whole tuna was P220 per kilogram before and now it is ranging from P280 to P300 per kilogram, he added.
