Fishing-Rights Stink Clings To Top Official Desmond Stevens

An interesting article from the Mail & Guardian. Seems like this fat cat's day in court will come. How slow the wheels of justice turn.

Read the article here: Fishing-rights stink clings to top official Stevens | News | National | M&G

DA Trying To Get Local Governance Of Small Scale Harbors Funded By Government

A short while ago I met with a small contingent including the Large Pelagic SME Association (LPSMEA) who represents a fair amount of harbor users, with the Democratic Alliance Parliamentary Advisory Committee regarding the state of our harbors, or lack thereof. In one of my previous post titled: MK Veterans - Wasting Solution, you can see the state of disrepair whilst it is better documented on the Trawler Heritage website. A brief discussion was had during which the LPSMEA and myself gave adequate explanations providing an absolute understanding of the frustrating situation of the complete lack of control, malicious damage to public property, theft and other crimes, etc to all whom where present. It seems that we were heard and now the Democratic Alliance is well into the process of appealing to the court to have small harbors removed from the portfolio of the Public Works Department. The DA is arguing and motivating that local government should run the harbors instead of Public Works who are based all the way in Pretoria. The local government will in-turn hand the responsibility over to the respective local municipalities. As we speak, Premier Helen Zille and Mayor Patricia De Lille have both stated that the local by-laws and governing policies are being drafted up outlining the governance and should be completed within 6 months time.

The DA's move to have the local harbors included in their local municipalities falls directly within the ANC's and President Zuma's policy Operation Phakisa - Oceans Economy from where the budget has already been approved. The billions of Rands that have been set aside for the small harbors development authority who are to oversea the rehabilitation and upgrading of our harbor infrastructures will fund this. The quantified value of our Exclusive Economic Zone (the EEZ spans some 200 nautical miles parallel to our coastline) and oceans which indicated that oceans around South Africa were estimated to have potential to contribute R54 billion to GDP and an estimated 316 thousand jobs. Further analysis undertaken in 2013, found that nine sectors of South Africa’s ocean economy could generate an estimated GDP contribution of 129 to 177 billion rand by 2033 and double the number of jobs estimated in 2010. This is the motivation and the underling reasoning why the ANC has implemented the results driven approach of Operation Phakisa (Phakisa means "Hurry Up" in Sesotho) which involves setting clear plans and targets, on-going monitoring of progress and making these results public. 

 There has also been a call to privatize the small harbors to become self sustaining and managed. I think the first logical step would be exactly what the DA proposes, then look to privatization. But with privatization comes exclusion and thought must be spared for the historic harbor uses, etc...

As a fellow harbor user I am reliant upon these harbors for my livelihood. Whilst most can agree that we may have some of the most picturesque harbors, below the surface of the Public Work's bandages, much dark festering lurks. I welcome the proposed changed the DA are in the process of fighting for and can't help but wonder what the future will hold.

Below are some photos of the stripped tractor that was used to collect up all the kelp that washed ashore on Hout Bay beach...I saw it again this morning and there is literally barely even the chassis left:

The South African Pilchard Demand

 Since the start of the South African pilchard season which commenced upon receipt of their respective right holder permits from DAFF earlier this year, the season started off slowly with intermittent periods of good catches. With the pilchards (Sardinops Sagax) having little or no presence around the Cape Of Good Hope, the vessels have been in search of the shoals around Mossel Bay and further up the coast with some success.

 With the development of the Mauritius Free Port Development (MFRP), fishing companies have diverted their vessels in favor of the duty / tax free advantage afforded to them by the Mauritian Government instead of docking and discharging in Cape Town with the South African political environment. Adjacent to the seaport of Port Louis, Mauritius's largest port, has developed the largest logistics center in the Indian Ocean. Which offers world-class, cost-effective supply chain solutions through a comprehensive range of equipment and facilities which comply with the highest standards in the industry: EU, HACCP, ISO. Some of the facilities and services on offer are: freight forwarding, customs clearance, transport/ haulage, office rental, dry and cold warehousing, cold storage, container services, dry docking and a seafood hub. The main attraction for vessel owners would be the following:

Zero percent corporate tax,

Preferential markets access (subject to meeting rules of origin requirements)

Exemption from customs duties on all goods imported into the Free Port zones

Free repatriation of profits

Access to offshore banking facilities

Reduced port handling charges for all goods destined for re-export

Hundred per cent foreign ownership

Fifty per cent of re-export value to the local market

 It really makes complete sense for a vessel owner to rather call on Port Luis for discharging and resupply. This is why this destination has seen the majority of the South Africa pilchard bait sales with the likes of MSC shipping the bulk of the volume. The local pilchard bait has been traded around $1350/ mt FOB Cape Town, however some volumes has been sold at $1400/ mt FOB same origin. These prices are looking to drop inline with the competition from Moroccan bait suppliers. Albeit the Moroccan pilchard is a different specie, the South African and Canadian pilchard is in highest demand due to the quality and fat content. However, the vessel owners are now looking to bait their hooks with Canadian herring as a substitute based upon the reports and interest received from the Fijian long liners success. The herring was being  sold around $1120/ mt CFR Port Luis for the 55/65 jumble pack, a few weeks back. The South African bait suppliers have changed their packaging to the 10kg boxes as per some customers request. This is a more efficient way of packing although the presentation and quality is slightly inferior. The 5kg box which has been preferred by some customers increased the suppliers packaging costs and labor time. The local South African tuna pole vessels prefer the 5kg box due to the interleaved finger packing presentation of the pilchards and is less bulky for easier storage on board.

Below on top is the typical 5kg pilchard box:

Above is the 10kg pilchard box: (You will see the difference in presentation of the packed baits)

With the international sardine bait price expected to decrease, the vessels are looking to catch their quotas as soon as possible making full advantage of the bait prices, weather permitting of course. 

Record Highs and Lows For SA Tuna Fishery

 The South African Tuna Pole Fishery has been bolstered this past season by the highest prices in history paid by the local exporters for their albacore catches. (South African Albacore Price Trend) Whilst the frozen yellow fin prices have remained consistently low, the albacore price roller coasted even higher and higher. This advantageous position for the vessel owners was drastically assisted by the competitive trading by these exporters to accumulate what little supply there was which was a major contributor to the high prices seen this past season. We need to be reminded that global catches were poor at this time which was also a major contributing factor. Whilst New Zealand had some catches of the smaller class of albacore, it was subsequently traded at a much lower price because of this. With the onset of the Spanish tuna season we have seen their canneries taking a more bullish position in an attempt to drive down the albacore price. This has had some effect on the price but with their catches remaining slow and low, SA albacore is still trading relatively high albeit at a level lower than last month. This past week we have seen improved catches of albacore with still the larger class of fish being landed. Interestingly, there have been increased reports of blue fin tuna swimming in and amongst the big eyes!

 With our tuna pole season still unbelievably in late operation, we have seen a decrease in the number of active vessels in our fleet still fishing. This is mainly due to the recent lull in catches prior, the presence of snoek (thyrsites atun) and the expiry of annual Local General Safety Certificates issued by SAMSA. The effect of the snoek fishing has seen a reduction in the availability of crew for the tuna pole vessels as the crews earn a higher wage catching snoek with landlines creating frustration for the tuna pole vessel owners who are port bound.

With SAMSA's Special Marine Projects Division being awarded the interim contract for our marine resource protection we have seen increased visible enforcing with the inshore and offshore patrol vessels; Lilian Ngoyi, Ruth First and Sarah Baartman, performing random inspections on the tuna grounds. Whilst they are perceived as a nuisance and hindrance by industry, we must all be reminded that it is pertinent for SA to show active policing of our marine resources to ensure that we fulfill our ICCAT mandates to ensure annual renewal of our quota for tuna species. Without this visible patrolling, SA would not be able to give guarantees (such as the IUU Catch Certificate system) that our tuna is caught according to the ICCAT rules and

regulations i.e. legally guaranteeing full IUU compliance of our fleet.

The International Seafood Sustainability Foundation (ISSF) has a simple diagram below highlighting some of the requirements our Department Of Agriculture, Forestry and Fisheries (DAFF) has to comply with ICCAT in order to maintain full compliance and membership. namely; timely reporting of tuna catch data per specie, observer coverage, vessel monitoring (VMS), active vessel register to name a few.

This tuna season will be reflected upon as providing a much needed respite for the vessel owners but it must be commented that many of them did not utilize this opportunity to fish aggressively and make the most of it, with some of the fleet having recorded very low catches indeed!

Navy Warship Fires on Cape Fishing Boat

Fishing just got a little more interesting for the vessel owners and crews at sea...

Navy warship fires on Cape fishing boat

South African Albacore Price Trend

Over the past few years, the South African albacore catches have been erratic and irregular which is to be expected as this specie is a highly migratory fish with demand at an all time high. 

Basic economics will explain that the price for a commodity is ultimately regulated by that of supply and demand. So we have supply, which is how many tons of tuna we catch, and demand, which is how much tuna people want. Put the two together, and you have  the basic rationale of supply and demand. The albacore price is best illustrated by the demand curve. In economics, the demand curve is the graph depicting the relationship between the price of a certain commodity and the amount of it that consumers are willing and able to purchase at that given price. Essentially, the lower the volume of albacore caught, the higher the price the canneries are willing to pay.

Various factors will effect either the demand and or supply simultaneously. Factors such as; rate of catches/ landings, exchange rate fluctuations, global catches, competition and time to name a few.

The South African albacore supply is mainly caught by pole and line vessels and thus the below graph illustrates the pole and line price accordingly for frozen whole round form. The local supply of frozen albacore has another yet very important factor determining the volumes as a portion of the fleet of vessels are outfitted towards fresh quality catches by slurring on-board. This fresh albacore which is exported in whole round form via air freight to mostly Spain and other countries within the EU, fetches a slightly higher return than the frozen price. This ranges between R2 to R6 per kg above the frozen albacore price.

The price today for albacore has reached the R30 per kg mark with the current trend for it to continue its upward increase. However, as explained in economics, the ceiling price will not be to far off which will prove to difficult and the determining factor which will set the highest price possible for the past 2 decades. The most crucial factor here is that of the frozen cooked albacore loin price. With whole round tuna, the importers in the EU have zero duties to pay above and beyond the sale price. However, with cooked loins, there are duties between 22-24% depending. With the price for albacore being this high, soon the canneries will overlook the import costs of loins to ensure continued supply. This will shift their preference to cooked loins until the whole round albacore price stabilizes at a lower more affordable price level and also guaranteeing a steady volume of supply.

For the interim, the local vessel owners will enjoy the current respite that the high prices offer although the diesel price is set to increase substantially next month and catches still remain slow. The high returns will negate the low catch rates until a shift in the global market occurs. Currently there are issues in Indonesia with red flagging of tuna exports from this country supposedly due to IUU practices which will starve the market just long enough for the price to remain high. The New Zealand albacore season has started or has it? Its been poor like ours but the size grading of their catches have been around the 3 kg whole round range. For a smaller fish you receive smaller yields, which in turn effects the profitability therefore receiving a lower price. 

Statistically Speaking, 2014 Was Well Below The Gunwale

With the South African tuna season starting off rather slower than anticipated, historically a different picture has been portrayed with this season having only a combined landing of below 200 tons as opposed to previous years average of around 1400 tons for November/ December period. (I do suspect on good authority that this figure is in fact incorrect.)

Bad weather has left the majority of the SA Pole and Line fleet docked in port whilst some of the smaller more economical vessels have chosen to brave the short weather periods with a mixed bag of results. With strong South Easterly winds fetching large South West swells, the opportunities have been restricted to only a 2 to 3 fish-able days before the North Wester picks up sending all vessels in search of their home or nearest port for refuge. This morning the hake long liner Christo Rei snapped her bow lines on the North Mole, Hout Bay in some serious South Easterly gusts, hence why my vessels were discharging today what little catches they had.

The majority of the albacore that has been landed was concentrated in smaller shoals with no sign as of yet of the larger biomass of albacore having been witnessed on the decks. Below is the graph from the Department of Agriculture, Forestry & Fisheries - Research & Development Branch which indicates the albacore tuna catching frequencies on a monthly/ annual basis for a comparative understanding:

So far the 2014/1025 season hasn't had much to show for itself, but this can change within a fortnight as has been experienced in the past. With the smaller volumes keeping the demand up, the albacore price is expected to remain relatively high provided the Rand doesn't strengthen further against the Euro and whilst the New Zealand pole and line season doesn't start. We can expect the decent raw material price to remain at its current level ensuring a welcomed return to the vessels.

The local yellow fin market has been able to consume the quantities landed of the smaller yellow fin (under 30kgs & over 50kgs) due to the irregular weather gaps allowing for the market to rebound in time of the next landings. This will remain so until the rest of the fleet start landing fresh yellow fin. The larger yellow fin (50kgs+) has found some good returns in the American market which does not have a size stipulation unlike the European Union's concerns over mercury.

With this week's maritime forecast being a blow out...the vessels will most likely look to depart on Saturday only. With a select few vessels having had some good landings, the majority of the fleet and exporters remain understandably apprehensive and somewhat nervous.