Report on the Implementation of the derogation to ... - Trade Websites

Final <strong>Report</strong>
RoO Derogation under the PACP-IEPA
access into the Australian market for PNG under the South Pacific Regional Trade and Economic
Cooperation Agreement (SPARTECA), it will be very difficult to compete with duty free imports from
Thailand (due to a free trade agreement established between Thailand and Australia). Also,
Australia is reportedly a difficult and costly market to break into. The Australian canned tuna market
is estimated to be valued at around $200-$250 million per annum. 59
While the Middle East is a significant market for canned tuna, it is dominated by Thailand imports
and PNG processors are unable to compete.
3.3.2 Domestic Market
The domestic market is significant for PNG processors, accounting for 20-30% of total production.
Two out of the three existing processors indicate that this market is their ‘saving grace’, accounting
for 20-50% of their sales, as profit margins generated on domestic sales are higher than those
derived in other export markets.
The local market is reportedly growing in both size and value. Rough estimates indicate that the
market is currently around 15,000 mt and has increased from around 10,300 mt in 2006 (Table 3.13).
Originally PNG processors supplied mainly low value red meat products, but local demand for higher
quality/higher value products (i.e. white meat in oil, brine and flavoured (fancy) packs) is growing.
According to RDTC, PNG’s pioneer tuna processing facility, 13 years ago the company supplied one
container per month to the domestic market. Now, the company’s sales volumes have increased
dramatically to 65 containers per month. It is estimated in the near future, the domestic market
could grow to as high as 80-90 containers/month (i.e. equivalent of ~17,000 mt/year). 60
In order to meet the growing demand, PNG also imports finished canned product, mostly from
Thailand. According to Thai Customs data, annual imports from Thailand have ranged from around
3,600 – 5,500 mt/year. There is no discernible trend in import volumes of canned tuna from
Thailand from 2006-2010 to support concerns raised by several EU stakeholders that Thai canners
are laundering finished product through PNG for re-export to the EU to take advantage of global
sourcing.
Table 3.13 PNG Domestic Market for Canned Tuna (Estimate) – 2006-2010 (mt)
Year Domestic Production Imports Total
2006 6,600 3,738 10,338
2007 7,800 5,056 12,856
2008 6,000 4,597 10,597
2009 7,500 3,609 11,109
2010 9,500 5,566 15,066
Source: Interviews, PNG cannery representatives 2001; Thai Customs data (provided by Infofish 2011); consultants’
analysis.
59 Interview, PNG processing company representative, September 2011.
60 Interviews, PNG processing company representatives, September 2011.
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