May 15, 2006
Suppliers of Frozen Tuna to Dictate Price
Report by Masaji Tsuji
Decrease in Numbers Effects a Change in Selling Policy
According to tuna wholesalers, it seems likely that big changes are ahead in tuna selling policies as tuna supplies are expected to decrease by 20 to 30% due to a reduction in the number of tuna-fishing vessels. The dynamics of price making are expected to be reversed from the pricing situation to date, where the mass merchandisers have had the upper hand, to one where suppliers will take the initiative. Moreover, out of a desire to be prudent in the way they sell the tuna that they have secured, suppliers will increase the proportion of supplies that they process in their own factories, put out less processing to subcontractors and reduce the amount they offer on wholesale markets.
Toward a New Supply-Demand Situation
Regarding sales of frozen tuna by wholesalers going forward, the wholesalers say: "We have no choice but to switch to a strategy that allows us to be prudent in the way we sell the product we have secured. As suppliers will have the initiative in the marketplace, we will not need to engage in negotiations when prices are not to our liking. Moreover, we will be keen to increase the utilization rates at our own processing factories. As we will be concentrating our efforts on our own sales, we will farm out less processing to subcontractors and limit the amount we offer on markets."