Cannery closes, more to follow?

ZAMBOANGA CITY, Philippines — Canned sardines may soon be in short supply nationwide as one of this city’s nine canneries has suspended operations three days after a price row cut fresh fish supplies. Edgar B. Lim, general manager of Permex Producers and Exporters Corporation, said the firm’s cannery operations had been suspended indefinitely due to the lack of fresh sardines. Other canneries may follow suit, he claimed, as they have "no more source of fish [and they] don’t have ... fishing fleets." On Monday, the Southern Philippines Deep Sea Fishing Association (Sophil) suspended operations after it and the canneries failed to agree on a higher price for fresh sardines. Sophil Vice-President Eugene C. Yap said the group had asked for P25 per kilogram from the price of less than P22 last month, citing the rising cost of diesel fuel, which accounts for up to 70% of commercial fishing’s operating expenses. Local canneries, meanwhile, said they could afford only up to P23/kg. Monday’s supply shutdown raised concerns that canneries would be forced to close shop. It is estimated that up to 80% of the country’s supply of canned sardines comes from the city’s nine canneries. "Most of us have stopped operating. Some are just accumulating fish from small fishing operators, but the supply is not enough," Mega Fishing Corp. president William Tiu Lim claimed in a phone interview. But as of Thursday, Mr. Lim’s canneries - Universal Canning Inc. and Ayala Seafoods Corp. - continued to produce canned sardines, since Mega Fishing is also into commercial fishing. Officials of six other canneries - Columbus Seafood Corp., Kimson Food Manufacturer Corp., Seacost Foods Inc., Atlantic Foods Corp., Maunlad Canning Corp., and Grant Food Corp. - were not immediately available for comment. "We are facing two fronts here: the retailers and the direct consumers ... the Department of Trade and Industry has already asked the canneries not to increase prices [amid the soaring prices of other basic goods]," said a cannery owner who spoke on condition of anonymity. Nineteen commercial fishing fleet companies and nine canning factories operate in Zamboanga City. Over 30,000 direct workers are expected to be affected by the issue. Mega’s Mr. Lim said the rise in fresh sardine prices was just one of the problems the canneries were facing. Another is the price of tin cans. Mega, he said, had decided to increase prices of regular canned sardines by P1.10 starting today, bringing the retail price to P12 per can. Another increase may be implemented next month, he added. Mr. Lim claimed that Mega, which sells its products to more than 20 countries, had already received at least five order cancellations from overseas clients due to the price hike. "We are in a very difficult situation. Our clients abroad have been complaining that we are increasing our price monthly," he said. "As much as possible, we try not to increase our prices," he added. "But the inputs - such as raw materials, tin cans and labor costs - are all increasing." Bureau of Fisheries and Aquatic Resources director Malcolm I. Sarmiento, Jr. said he hopes a meeting today with representatives of the two groups will settle the issue. "We are scheduling a dialogue with the two groups and that will take place tomorrow [August 1] to hopefully find a middle ground," he said in a telephone interview. "Fishing boats are unloading 20,000 banyeras (fish buckets holding 35-40 kilos each) a day ... malaking volume mawawala pag mahihinto (the volume loss will be huge if this is halted)," he explained. - BusinessWorld