Tuna industry failing on sustainability The Vietnam Association of Seafood Producers and Exporters (VASEP) recently forecast the overall export value of tuna to increase slightly by 4% on-year to US$510 million for 2015.  However, tuna exports got off to a rocky start in the three months leading up to April dipping by 12.64% to roughly US$100 million with exports of live, fresh, frozen, and dried tuna plummeting 46%. Canned tuna exports fell by 3% while fresh tuna loins were down 13%. Exports of other non-perishable processed tuna products such as precooked packaged tuna grew by 36%. If the decline continues into the second quarter economists at VASEP have said it will be difficult to attain this year’s target. Decline in most major markets Tuna exports in the January-March period continued to slip largely as a result of concern over health and sustainability issues in Southeast Asian tuna and depreciation in the value of the EUR and JPY against the US dollar. The price of skipjack tuna in Bangkok has dropped from US$2,400 per metric tonne in October 2012 to US$1,000 per metric tonne now. The low price and excess supply has forced processing factories and fishing fleets to cutback. Exports to most all traditional markets experienced a sharp decline. For instance, among the eight top markets – the EU, US, ASEAN, Japan, Israel, Libya, Republic of Korea, and Taiwan that accounted for 81% of Vietnam’s total tuna exports, only ASEAN witnessed growth. The US remained the leading importer of Vietnamese tuna. Despite a slight recovery in February, exports to the market in the first two months hit just US$21.5 million, down 13.8% against the same period last year. Meanwhile exports to the second largest market –the EU – also slipped 21% to US$17 million. Since 2014, Japan has seen continuous fall in tuna imports and ASEAN replaced Japan to rank third among importers of Vietnam tuna. During the period, exports to ASEAN jumped 20.7% to US$6.2 million. Exchange rate affects export results Tuna exports historically have tended to be lower in the early part of the year and pick up in the latter months. However, the strong US dollar this year is expected to negatively impacted trade throughout the remaining months of the year. Most notably, the industry is suffering as a result of quality and over exploitation concerns, which is why tariffs are still imposed on Vietnam’s tuna exports in the EU and US making them less competitive.  Specifically the tuna industry has not come into full compliance with transhipment policies required by both the EU and US markets, which require tuna caught in the open seas be returned to port before being shipped to foreign markets. These policies are designed to reduce exploitation of tuna but offset the reduction in quantity by higher overall profitability by increasing the sales price of tuna.   This issue is one of the stumbling blocks holding up passage of the Trans Pacific Partnership (TPP) agreement. A large number of Vietnam exporters have reported that European businesses have asked them to slash their prices drastically before they would even consider purchasing their tuna. Vietnamese tuna also suffers because the industry continues to use destructive fishing practices that harm far more than just tuna populations. Fishing fleets use fish aggregating devices (FADs) with large purse seine nets to catch skipjack tuna, or ‘chunk light’ tuna. This is another issue that is holding up passage of the TPP agreement as the practice kills countless sharks, rays, turtles and even juvenile bigeye tuna – a species the International Union for Conservation of Nature considers to be at a high risk of extinction in the wild. The industry leaders in the EU and US markets are moving towards 100% sustainable tuna and retailers in these markets are ditching reckless companies that use destructive fishing practices. In the US last year, the Obama administration created a Presidential Task Force on Combating Illegal, Unreported, and Unregulated (IUU) Fishing and Seafood Fraud. This legislation was passed in direct response to the growing problem in the US for which China, Thailand, Vietnam, Indonesia and other countries that export seafood to the US routinely mislabel it to avoid high tariffs and anti-dumping duties. The Obama administration also said US negotiators to the TPP were pursuing commitments to ensure effective enforcement of labour and environmental laws, as well as to address specifically the IUU fishing activities. With the TPP agreement in the final stages of negotiations and key issues related to over exploitation and sustainability of the tuna industry still on the table, it is unlikely the industry will rebound until the agreement is signed and comes into effect. Once it comes into effect, which will most likely not be in 2015, Vietnamese businesses in the tuna industry exporters will have more opportunities to enter global markets and compete on an equal playing field.  VOV