W1 Tuna Update: Japan's Expanded Catch Limits and Vietnam's Shifting Export Dynamics in the EU Market

Japan Secures Expanded Pacific Bluefin Tuna Quota for 2024 in Recognition of Population Recovery Efforts

As the overseer of Pacific bluefin tuna stocks, the Western and Central Pacific Fisheries Commission has granted Japan an increased catch limit for larger sizes in 2024, reflecting the species' population recovery. A significant tuna consumer, Japan will now be able to transfer 30% of its small bluefin catch quota to those weighing 30 kilograms (kg) or more, up from the previous 10%. Made during the annual commission meeting with 26 participating countries in the Cook Islands, the decision acknowledges the positive impact of strict control measures implemented in 2021, leading to a 15% increase in the catch limit for larger fish. The move signifies ongoing efforts to ensure sustainable tuna fisheries.

Vietnam's Tuna Exports to EU Amidst Shifting Market Trends and Regulatory Influences

In 2022, Belgium stood as Vietnam's third-largest tuna import market in the European Union (EU), experiencing a substantial 65% growth compared to 2021. However, Belgium's tuna imports from Vietnam in 2023 declined, removing it from the list of Vietnam's top three tuna import markets in the EU. Data from Vietnam Customs reveals a continuous decrease in tuna exports to Belgium throughout the first ten months of 2023, amounting to over USD 9 million, marking a significant 48% year-on-year (YoY) decline. The main export product, frozen tuna loin/meat (HS code 0304), witnessed a notable 55% YoY decrease, while processed and canned tuna exports increased by 7% YoY.

Vietnam now ranks as the fourth largest non-EU tuna supplier to Belgium, following Ecuador, the Philippines, and Ivory Coast. Influenced by the COVID-19 epidemic and reduced purchasing power, Belgium's altered consumption habits have led to a shift in preferences toward cheaper canned tuna products, impacting overall import trends. Particularly, the EU market showcased increased exports attributed to tariff advantages provided by the Vietnam-EU Free Trade Agreement (EVFTA). Notably, the challenging supply conditions stemming from a severe drought in the Panama Canal hindered the canned tuna supply from Ecuador to the EU, creating opportunities for Vietnamese products. Amid this backdrop, Vietnam's canned tuna exports to specific EU markets witnessed significant YoY growth, with the Netherlands up by 114%, Italy up by 368%, and Poland up by 237%.

There is a significant correlation between Vietnam's tuna exports and the exchange rate, with a 1% increase in the exchange rate corresponding to a 1.54% rise in tuna exports. Examining the period from 2007 to 2021 indicates a consistent annual increase in Vietnam's exchange rate, suggesting its ongoing impact on the tuna export industry. However, import tax rates emerge as a substantial barrier, with the exchange rate and import tax rate exerting the most robust influences. Surprisingly, free trade agreements between Vietnam and importing countries have not significantly altered tuna trade flows, emphasizing the need for Vietnam to leverage such agreements for increased exports. Meanwhile, consumer income levels in importing countries display negligible impact. The pivotal role of supply factors, exchange rates, and trade barriers in determining export scale, emphasizes the need for Vietnam to shift focus towards quality improvement, meet trade agreement requirements, and reform fisheries management policies for sustainable development in the tuna export industry.