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Commodities

Falling demand halves frozen bonito price

TOKYO -- The price of frozen bonito is falling amid sluggish demand due to continued higher prices. The major ingredient in canned tuna is currently traded at $1,200 per ton on the Bangkok market, which sets the international benchmark. This is half the price of a year earlier when the price was high.     

Frozen bonito is processed at Yaizu fishing port in Shizuoka Prefecture, Japan.

     Bonito is caught in the Central and Western Pacific Ocean and the Indian Ocean, and many of the fish are unloaded in Bangkok. In spring last year, the trading price was more than $2,300 per ton in Bangkok due to a poor catch in the Pacific Ocean and growing demand for canned tuna from the U.S. and Europe. The higher price continued and gradually pushed down demand.

     A slight decline in the bonito catch also spurred the price fall. In July through September 2013, bonito fishing was restricted in the Central and Western Pacific Ocean to preserve resources. But the bonito catch was believed to be around 1.6 million tons in 2013, just a slight drop from the previous year's 1.65 million tons. This February through March also saw a bountiful catch, driving the price further down.

     The lower price in Bangkok is also affecting the trading price in Japan. In Yaizu, Shizuoka Prefecture, a major port for unloading frozen bonito, frozen bonito is trading at around 140-150 yen ($1.36-1.46) per kilogram, roughly 40% cheaper than a year ago.

     But not so many manufacturers of bonito products are lowering their prices. Hagoromo Foods raised the price of its Sea Chicken brand of canned tuna in May last year due to rising raw material prices. A Hagoromo official said that although frozen bonito is becoming cheaper, the company is not thinking about lowering the prices of its products at this moment.

     An official of pet food maker Aixia also said that the company has no plans to immediately reflect the falling international price of bonito in its cat food made from frozen bonito.

     Also, an official of marine products trading company Kyokuyo said, "Many canned tuna producers in Bangkok believe that they are currently seeing the bottom price and that the price will rise again to nearly $1,500 per ton."

     Fishing restrictions similar to those implemented last year will return this summer, prompting many in Bangkok to expect this year's catch to be smaller than last year.

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