Thai Union group – the world’s largest canned tuna producer – reported record profits in 2019, despite lower average y-o-y tuna prices. Revenues fell by 5.3% y-o-y, which is partly attributable to lower prices, in addition to the appreciation of the Thai baht against some key trading currencies. However, gross profit and earnings before insurance, tax, depreciation and amortization (EBITDA) rose by 6.4% and 9.2% respectively to THB 20mllion (US$654 mn) and THB12 million (US$391 million), on the back of cost-efficiency gains across various segments; ambient seafood, frozen and chilled seafood. The US accounted for almost 40% of the group’s sales, over the period while the EU comprised 28%.
Mintec average price for whole fresh Thai skipjack tuna in January 2020 rose by 28% m-o-m and 2% q-o-q to US$1.15/kg cost and freight (CFR). However, the January average represented a 12% y-o-y decline and points towards some impact of lower retail demand for fresh seafood. Further price weakness is widely anticipated through the rest of March and Q2 2020, with consumers expected to spend less time and money eating out.