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Factors Affecting Price Determination and Market Competition for Fresh Pacific Pelagic Fish, Phase I: Tuna and MarlinCharacterization of the U.S. market for fresh Pacific tuna and marlin will be accomplished through standardized interviews. By gaining an accurate understanding of present concerns and future trends of the markets, local and global supply, and forces affecting prices, improving decisions can be made for managing these fisheries.
Fresh tuna is not a single commodity but an array of products. During marketing and distribution, each tuna acquires an individual identity (i.e., a "grade") that is maintained until final sale and consumption. The identity directs different grades of tuna to different market niches and end uses. The relationship between tuna grades and price fluctuations (first purchase) in the Hawaii tuna fishery is the focus of this research. Market data, including price, fish grade and method of capture, will be collected for nearly 2,000 transactions at the Honolulu fish auction. More aggregated data will be collected for most fresh tuna sales in Hawaii, Japan, the continental U.S. and Europe.
A second round of data collection is planned, but the preliminary data base suggests that fish grade (including size) and linkages of specific grades to specific products and end uses explain more of the short-term price variation in Hawaii's fresh tuna market than does harvesting method. Market competition among tuna fishermen using different gear types (longline, handline, troll) is less than imagined.
A data base on marlin sales in Hawaii's fresh fish market has also been developed and more aggregated data will be collected for the continental U.S. and Japan markets. Preliminary findings suggest that the marlin market is much less stratified in terms of grades and product types than is the fresh tuna market.
A final project report published as part of the
SOEST-JIMAR publications series:
Mr. Paul Bartram
Akala Products Inc.
817 Ekoa Place
Honolulu, Hawaii 96821
Phone/FAX (808) 531-5866
Dr. Peter Garrod
Department of Agricultural and Resource Economics
University of Hawaii at Manoa
3050 Maile Way, Gilmore 115
Honolulu, Hawaii 96822
Phone (808) 956-7541
FAX (808) 956-4061
The following are excerpts from the project's final report, published in 1996 as a UH-SOEST publication, entitled Quality and Product Differentiation as Price Determinants in the Marketing of Fresh Pacific Tuna and Marlin, P. Bartram, P. Garrod, and J. Kaneko, SOEST Pub. 96-06, JIMAR 96-304
This study examines the highly differentiated market for fresh tuna products and the relationship between quality characteristics and market value. Fresh tuna are individually graded and each fish is directed to the most appropriate (and profitable) market and end use. The range of acceptable quality within each market niche and consumer application defines the grade and, ultimately the price, of fresh tuna. By contrast, marketing options are greatly reduced for conventionally frozen tuna, most of which is sold for canning without individual grading of fish.
The influence of quality gradations on fresh tuna pricing in the Hawaii market is assessed quantitatively by analyzing over 8,000 individual tuna transactions during the summers of 1994 and 1995. Hawaii grading standards are compared and "calibrated" with those in major U.S. and Japanese fresh tuna markets. Market connectedness is demonstrated by comparing tuna prices in Hawaii with prices of equivalently-graded fish in export markets.
Fresh marlin, which is the largest by-catch of tuna fisheries and enters the same markets as fresh tuna, is a secondary focus of the research.
Tuna quality grading is a highly subjective process. Graders can easily observe fish body appearance but they can directly sample only a small section of the fish muscle. There are usually only a few seconds to evaluate and assign a grade for each tuna during purchasing or export processing. Grading criteria are not always applied uniformly but a common understanding of quality standards evolves over time between fresh tuna sellers and buyers in each market.
Research results will enable Pacific island resource managers to value pelagic fisheries under varied marketing scenarios. The findings also suggest some strategies that could enhance the economic viability of island-based tuna fisheries.
PROBLEM STATEMENT AND RESEARCH OBJECTIVES
Frozen tuna is traded as a commodity and is destined primarily for a single end product canned tuna. The market value of the raw material is determined principally by tuna species and size. It is uncommon for raw tuna prices to fluctuate by more than $0.15/lb (throughout this report "lb" is abbreviation of pound, 2.2 kg).
In dramatic contrast, the price of fresh tuna can range from less than $0.50/lb to well over 55.00/lb (whole weight basis), even within identical size classes of a single species from a single fishing trip. Price variations in the fresh tuna market are subject to many interpretations, including some that claim bias against particular source areas or gear types.
The primary research objective of the present study is to determine if wide price variations are related to the highly differentiated market for fresh tuna products. Specific objectives are these:
Fresh marlin, the largest by-catch of tuna hook-and-line fisheries, enters the same markets as fresh tuna and is a secondary focus of the research.
SUMMARY OF FINDINGS
POSSIBLE APPLICATIONS OF FINDINGS
This page updated August 17, 2006