This article is originally published in Vol. 1, Issue 2 of the Maldivian Economic Review in December 2019. The article can be downloaded from mer.mv
Maldives is Tuna country. So it has been and so it will remain. Our protein is still made up in large part from tuna caught in the country and the total net benefit for the country from our tuna landings are so much bigger than the GDP shares indicate, as has been argued in …
However, even while much of our life depends on the bounty from the sea, it is important to a get a feel for the larger global tuna trade in order to get a better bearing, of our position in the global tuna industry.
In 2017, the last year, in-country landing data is available, the country landed 282,221 mt of total marine species out of which 89,683 mt (32%) were skipjack; still the largest share of our harvest from the sea. It is also interesting to note that 62% of the skipjack landings, as normal, have been from the Southern Atolls; from L atoll southwards.
FISH LANDING BY TYPE AND LOCALITY, 2017 in metric tons
| Total | Skipjack tuna | Yellowfin tuna | Big eye tuna | Albacore tuna | Dogtooth tuna | Little tuna | Frigate tuna | Other marine fish | |
| Republic | 282,221 | 89,683 | 49,377 | 1,074 | 3 | 22 | 161 | 345 | 2,494 |
National Bureau of Statistics Maldives, Statistics Yearbook of Maldives 2019.
Skipjack is a globally caught and globally traded commodity with a total harvest of 1,462,040.00 mt in 2017. The largest volumes, as normal, were caught in the Western Central Pacific and accounted for 56% of globally caught skipjack in 2017. In this same period the harvest of skipjack in the Indian Ocean is close to 500,000 mt. Therefore, the local harvest of skipjack of 89,683 mt in 2017 account for only 3.38% (fig 2) of the global catch of skipjack and only 18% of the harvest of the Indian Ocean.
Being a globally harvested product, skipjack is also a globally consumed product mainly processed in canned form. Therefore, unsurprisingly, skipjack is an internationally traded commodity and its market price is determined purely by supply and demand. As a traded commodity with moderately increasing demand over time, the demand curve does not exhibit any significant troughs and small variations in demand are mostly seen in the event of exceptionally high prices triggered by extraordinarily low landings during a given period.
The pole-and-line premium
In response to outrageous media footage of dolphins being slaughtered by purse-seine vessels and the ensuing public outcry in 1980’s, the Earth Island Institute of US, in 1990, led the move to promote Dolphin Safe tuna products. Many commentators point to this occasion, as the deciding moment when public demand for environment sustainability was finally noticed and was registered as a fact of commercial life for processors and harvesters.
With this movement led by consumers rejecting tuna landings from purse-seine vessels slaughtering dolphins caught in the nets, and the effort by the Earth Island Institute to label safer, more conservatively caught tuna as ‘Dolphin Free’ the trend towards sustainable tuna harvesting has only grown. Today the WWF and a host of other such eco-conscious NGO’s are playing an increasingly important role in holding producers and processors to account and promoting more eco-friendly products in all countries throughout the world.
Maldivian skipjack have been, from the distant past, a pole-and-line affair. As environmental sustainability grew in importance and as the preference of consumers for sustainable products came to measured in sales volume and therefore income of the larger supermarket chains, the demand for Pole-and-line Tuna have grown through the developed world, starting from the EU and spreading to the markets of all developed countries.
Maldivian pole-and-line catch have benefited tremendously from this larger global move towards environmentally sustainability and have commanded a premium over purse seined skipjack since the turn of the century. Therefore, even while total Maldivian landings are less than 4% of Global Catch, because of the ever increasing global demand for environmentally sustainable products, our pole-and-line catch; the most sustainable of skipjack landings, enjoy a market demand greater than the 4% of landings they represent globally.
The International Pole-and-line Foundation (IPNLF), registered as a charity in the UK in 2012, have led efforts to promote pole-and-line catch globally and undertaking much needed research in the pole-and-line industry. Data available at the IPNLF website for 2011-2013 estimates indicate that while there are more than 22 countries recognized as countries with recognized Pole-and-line catch, Japan Indonesia and Maldives, are amongst the world biggest Pole-and-line countries, accounting for about 3 quarters of the catch of total global Pole-and-line catch. (The latter update of 2015 indicated modestly less volumes landed on pole-and-line.)
Japan is the biggest harvester of pole-and-line tuna with 28% of the world pole-and-line catch. Indonesia and Maldives, account for 25% and 21% of the Global Pole-and-line catch respectively. The remaining 19 countries of the total 22 countries who regularly catch pole-and-line account for about 26% of the world pole-and-line catch depending on yearly variations.
While Japanese catch account for the largest portion (28%) of pole-and-line catch, Japanese catch is processed and consumed in the local Japanese market and is not available for export. In fact, Japan is a net importer of pole-and-line catch, including 377,000 mt of tuna related products from the Maldives in 2018. In this context it is perhaps important to note that the Japanese have been an integral part of investing in fishery infrastructure and technology transfer and therefore developing the Maldivian skipjack industry of the country from the 1970’s. Because Japan consumes it’s catch and in fact imports pole-and-line catch, the Maldivian share of the globally traded volume of pole-and-line catch rises close to 33%. Not a measure to be scorned at.
Therefore, while we account for less than 4% of global catch for skipjack and while skipjack is a commodity whose prices are determined on demand and supply in the world market, there is a premium that our landings command in the global marketplace, an opportunity for local skipjack industry to compete outside our weight category, as it were
However, presently processors in Thailand purchase a considerable stock of our Pole-and-Line catch, annually and trade it in the highly demand driven International market for pole-and-line catch. Export statistics show that 40,796 mts of frozen skipjack was exported to Thailand in 2017 representing close to 45% of the 89,683 mts of skipjack landings for 2017. Larger in-country processing facilities would have offered us a higher margin for this volume thereby increasing our export earnings for the year.
It is heartening, therefore, to note that private investment is flowing into in-country skipjack processing including a brand-new canning factory opened in December 2019. This 25m $ investment by a private party offer a newly minted 25 mt/day canning factory with 1,200 mt storage facility and represent the biggest such investment- private or public, in a decade in the fishery industry. Similar investments into greater in-country processing of our landed volumes, will allow our processors to command a bigger presence and therefore allow us to punch above our weight category, allowing us a bigger role in determining the prices on offer for Maldivian pole-and-line tuna in the ever-increasing demand for environmentally sustainable skipjack landings.