|Exporting High-Value Food Commodities: Success Stories from Developing Countries (WB, 1993, 119 p.)|
|Appendix The development and performance of case study commodity systems|
In 1980, world consumption of tuna was stagnant, world tuna prices were depressed, and rising operating costs were leading to the closure of tuna processing facilities in the U.S., Japan, and Europe.
Over the subsequent decade, world canned tuna imports would nearly quadruple from 110,000 tons to 437,000 tons, with large-scale canning operations shifting to several low cost developing countries.
The most dramatic growth in tuna processing and trade has taken place in Thailand. In 1980, Thailand did not export a single can of tuna. Ten years later, Thai canned tuna exports exceeded 225,000 tons, for a 51% world market share. The gross value of Thailand's tuna exports in 1989 were $537 million. Trade expansion was high and steady throughout the decade.
The Thai tuna industry is interesting not only because of its rapid development, but also because it is based predominantly on imported raw materials. Tuna landings by Thai vessels have rarely exceeded 30,000 tons, while Thai imports of frozen tuna (mostly skipjack) have increased past the 250,000 ton mark. It was in fact shifts in traditional fishing patterns which provided the initial basis for the Thai tuna canning industry. Historically, the eastern Atlantic and eastern Pacific oceans were the two most important fishing areas. Beginning in the late 1970s, however, U.S. vessels began to exploit the tuna resources of the western Pacific and European vessels moved to the Indian Ocean. The result of this shift would be a large increase in world tuna landings and a significant drop in tuna prices.
Thailand was well located to draw upon the expanded, low cost supplies of tuna from both the Pacific and Indian Oceans. In the early-to-mid-1980s several Thai fruit and vegetable canners and other entrepreneurs invested in large-scale, modern processing facilities which increasingly have been used for fish, especially tuna. Their operating costs have been relatively low due to efficient management, the availability of abundant low-cost labor, backward integration into can production, and efficient use of byproducts from processing.
In order to gain access to and penetrate the expanding market segments of U.S. and European markets, Thai canners entered into co-packing arrangements with American and European firms. Later, Thailand's largest tuna processor took over the third largest tuna company in the U.S. (Bumble Bee Seafoods Co.), enabling it to take advantage of the latter's extensive distribution network and well-established brand names. Thai processors account for the largest shares of all major canned tuna import markets except the French, who until recently barred the Thai product in favor of Francophone African suppliers.
Thailand Canned Tuna Exports
Source: FAO Fisheries Commodity Yearbooks