Aquaculture for all

Accessing Markets Directly To Improve Payments

Marketing Economics +2 more

MYAMAR - The fisheries industry is seeking to do direct trade with the Middle East. They are working to cut out the middle men when selling Rohu to the Middle Eastern market, a Myanmar Fishery Products Processors and Exporters Association (MPEA) official said last week.

Myanmar is also the world’s largest exporter of Rohu, according to Department of Fisheries (DOF) statistics.

He said the first step will be to set up a liaison office in the Middle East to facilitate direct trading, hoping to overcome certain issues when dealing with brokers and earn better prices for the products, which have recently plunged 8 per cent below production costs.

The MPEA chairman, went to Dubai in mid October to assess the regional markets.

“We went to check market prices for Rohu in Middle Eastern markets,” an MPEA spokesperson said, adding that the recent price falls were the result of oversupply.

He added that the middle men, or brokers, were ordering too many fish and dumping them on the market and depressing prices. But having a liaison office would open up the possibility of setting up cold storage facilities to hold fish until prices rebounded.

An office would also alleviate payment delays, the spokesperson said. “With a liaison office, Myanmar could communicate directly with buyers. Any exporter could participate with us,” the MPEA spokesperson said.

Rohu prices have declined from mid-October from about K1800 per viss (1 viss equals 1.6 kilograms or 3.6 pounds) to K1680-1750 on 10 November.

U Win Kyaing, associate secretary of the Myanmar Fish Farmers Association, said sale prices are about K150 below production cost, while those marginally higher prices recorded in mid-October barely broke even.

“We only break even on with total production costs – including the investment, overhead charges and the interest – when sales prices are K1800 per viss,” he said.

However, he said the last few years have been poor for farmers, with high feed costs and low sales hurting in the 2006-07 fiscal year, Cyclone Nargis in 2008 and the global financial crisis in 2008-09.

“The Rohu market was affected by the financial crisis but bounced back in about four months and stayed that way until about two weeks ago, when the prices dropped again.

“If the price continues falling like this, the farmers who choose to sell their fish at this time will definitely face losses,” he said.

He hopes Rohu prices will soar in November as Muslims from around the world – the biggest buyers of Rohu – descend on Saudi Arabia for the Hajj religious festival, starting on 25 November.

“Even if there are only one million buyers, sales will increase and that will push prices up too,” Mr Kyaing said.

He added that Myanmar should follow Vietnam’s lead in deliberately seeking out markets for its products and should consider looking for markets beyond the Middle East.

U Hla Win, ex-director general of the DOF, said focusing on the Middle East is “very limited” and could lead to excessive competition and lower overall prices.

“We also want to search for markets for Rohu other than the Middle East, such as other Asian nations and western countries too; we should consider how we can best penetrate these markets,” he said.

Rohu sells for about US$1 per kilogram and by the end of October, export revenues had reached $57 million. This is about $10 million more than last year, according to DOF statistics.

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