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.