TECHNICAL PAPERS

AGRONOMY PROTOCOL

by

Ruben T. Barraca

Marine Agronomist
FMC Corporation, Marine Colloids Division

Site Selection

Eucheuma is commercially grown in a wide variety of sites. During the development of Eucheuma farming, many “hard and fast” rules of site selection have been made, only to be broken by successful farmers in other regions. In general, though, productive Eucheuma farming areas have the following attributes in common:

• They have clean, clear seawater with a salinity of at least 28 parts per thousand (ppt). Areas with brackish or turbid water are not suitable.

• They have a constant or frequent turnover of nutrient-rich seawater which is well mixed by wind-driven or tidal currents.

• They are not exposed to heavy winds or waves during any season of the year and are located in typhoon-free zones of the tropics.

• They have a stable temperature in the range of about 25 to 30 °C.

The “off-bottom” type of submerged culture is normally done in shallow coral reef areas which have about one-half meter of water over them during average low tides. These areas usually have a sandy bottom which is suitable for the use of stakes. Typically the natural flora and fauna of such areas include turtle grass and sea cucumbers.

Both floating and submerged culture are commonly done on reef flats or below beaches which are protected by a living coral barrier reef. Growth rates tend to be highest near the reef edge where water turnover is frequent. However, Eucheuma farming need not be restricted to coral reef areas. It is also successfully done in shallow waters which are protected by surrounding land masses. This can be done over rocky, gravel of sand bottoms where overlying waters remain clear.

The optimum depth range of waters to be used for floating culture has not yet been determined. The method was first applied in waters which were only one or two meters deep at low tide but it has since been used in waters which are several meters deep at low tide.

Field Layout

The monolines may be oriented parallel or vertical to the seashore. Most farmers lay them vertical to the seashore because this practice has the following advantage:

• Less damage such as uprooting of stakes, breakage of lines or breakage of propagules;

• Minimum obstruction to floating debris.

In most farms, the distance between monolines ranges from 15 to 30 cm. while the length varies from 2.5 to 10.0 m. Shorter lines are more manageable in terms of planting and harvesting although they have the disadvantage of needing more stakes per unit area.

Staking

Wood or bamboo stakes 50 to 100 cm long are commonly used. Bamboo stakes may be whole or split depending upon the kind and size of the bamboo. The number of stakes required per unit area depends on the layout, the length of the monoline, the distance between monolines and the technique. In general two stakes are needed for every monoline. However, bamboo or rope spreaders can be attached horizontally between stakes, so fewer stakes can support more monolines.

The sharp ends of the stakes are driven into the sea bottom by means of a sledge hammer or heavy wooden pestle. In some areas stakes may have to be driven into holes bored using a large chisel or star-drill.

Propagules Size, Selection and Care

Propagules (cuttings or seedlings) for propagation purpose should be healthy and should be taken from the young, healthy portion of the plant. A convenient propagule size is 50 to 80 grams. Plant material used as a source of propagules should not be exposed to prolonged dehydration.

In practice propagules are kept in submerged seed bins until they are ready for tying to the monoline, unless they are to be tied immediately.

Tying the Propagules

The propagules can be tied first to the “tie-tie” (raffia) before they are tied to the monoline. Alternatively, the raffia can be tied first to the monolines and then to the propagules. There is a reason for variation in tying technique. The former method is used with nylon monofilament line while the latter is used with braided line in which raffia is threaded between strands of the line. The farmer can economize on the use of the “tie-tie” by splitting them (monoline method) or by using the raffia two or three times by tying the propagules using a slip knot.

Tying Monolines to Stakes

The two ends of a monolines should be fastened securely to stakes, ropes of horizontal bars used as spreaders. Two techniques are commonly observed. The monolines may be tied to stakes before or after propagules are tied to a monoline. The latter technique is the most widely practiced.

Maintenance and Crop Protection

Seaweed farming is not a lazy man's business. The plants need tender loving care (TLC) such as tightening sagging lines, repairing uprooted stakes, removing epiphytes and other kinds of seaweeds, shaking the lines to remove the mudflakes or sediment, driving away fish grazers, removing old rotten stakes, sharp objects and sea urchins, installing net fences to prevent plant losses, picking up broken and drifting plants and tying them to the monoline or gathering broken plants for drying under the sun.

Harvesting

The farmer should harvest only mature plants which are 6 to 8 weeks old. He should harvest the whole plant. There are two methods of harvesting. The first is to remove or untie individual plants from the monoline without untying the monoline from the stakes. The second is to remove the entire monoline together with the plants. The latter method is widely practiced and is highly recommended. This method makes it convenient for the farmers to select propagules, to dry plants and to clean monolines before they are used again.

Post-Harvest Handling

Drying

Two methods of sundrying are commonly used. In the first, plants are untied from the monolines and spread out on the ground, drying mats, and drying platforms. In the second, the whole line together with plants still attached is hung for drying. In either case, the propagules are selected and segregated before the harvest is dried. Drying plants while they are still tied to the lines is recommended as it makes the drying operation possible without the use of mats and drying platforms and it avoids the bad practice of drying on sand. Seaweeds should not be dried directly over sand as it will stick to the seaweeds and must be removed later. Eucheuma should be dried under the sun for 2 to 3 days to achieve the desired 30 to 35% moisture content. Dirt, extraneous weeds and plastic are best removed during the drying operation.

Storage

Dried seaweeds can be stored inside a farmhouse in piles to allow aeration as well as to attain the equilibrium moisture content of 30 to 35%. Air drying also allows excess salt to drop out of the seaweeds.

Description and Specifications of the Product

Raw Eucheuma is produced by drying newly-harvested plants under the sun for 2 to 3 days until the moisture content is about 35%. A good raw product has the following specifications:

GROWING SEAWEED IN FIJI

by

Mr. Mahuri Robertson

Farm Manager
Seaweed (South Pacific) Ltd.
Savusavu, Fiji

Background

Coast Biologicals Ltd., a New Zealand-based company involved in the manufacture of bacteriological grade agar, set up in Fiji a subsidiary called Coast Biologicals (Fiji) Ltd in 1985. Their involvement in Fiji was solely to establish a seaweed industry based around Eucheuma cottonii. The aims were to establish suitable growing areas, to provide expertise to indigenous coastal dwellers, and later, to establish a facility to process the local and regional production of the raw seaweed.

Despite promising early growth this latter aim was not achieved for a number of reasons, including the Fiji political situation, the lack of volume, and the strengthening of the N.Z. dollar against the U.S. dollar. These factors were such that economic viability did not appear possible, and with the Company's withdrawal from Fiji in September 1988 I was transferred to Indonesia to establish seaweed farms in suitable areas from which the Company could guarantee their raw material supply to a factory which was under construction in Jakarta.

I had always believed, along with other colleagues, that the seaweed industry in Fiji could prosper if different techniques and a different approach was taken. Having had an approach from Mr. Simon Henderson to join a newly established company, Seaweed (South Pacific) Ltd., which was aiming to rejuvenate the Fiji seaweed industry, I resigned from Coast Biologicals Ltd. to become part of this revival effort.

The Seaweed (South Pacific) Ltd.

Seaweed (South Pacific) Ltd., usually abbreviated to SSP, was formed in 1989 with New Zealand, Fijian and Australian capital. The company aims are:

• to assist Fijians to develop owner-operated farms;
• to act as buying agent for raw dried weed;
• eventually to produce semi-refined carrageenan; and
• to set up company farms.

The first company farm has being set up at Nanuca, Savusavu, Vanua Levu, and already has 40 Fijians on the payroll. But each farm is expected to employ up to 120 people, and will act as a training ground and an incentive example for small-scale growers.

Seaweed Culture Method

The method currently used by the Company seaweed farm at Nanuca, is the “offbottom” or fixed monoline system. The foreshore area has been divided into farm units which, in stage one, would allow the development of 24 farm units, each employing 2 workers full-time. Each unit is 50 meters by 40 meters and accommodates 1,600 lines. The lines are 5 meters in length, and 25 plants are tied per line. Each unit is divided up into 8 blocks and, when fully operational, will rotate on an 8 week growing cycle. Therefore, each week, 200 lines would be harvested and 200 new lines re-planted for each farm unit.

The Coast Biologicals system involved large numbers of posts to hold each line, but SSP has opted for fewer, but larger and stronger posts. A 7 mm rope is strung between the posts, and it is to this rope that the 5 meter long seaweed lines are attached (Figs. 1 and 2). Wire clips are positioned along the rope at approximately 25 cm intervals. One end of the seaweed line is attached to the clip and the other end knotted to the 7 mm rope forming the other side of the block.

Figure 3 shows the layout of a typical 1600 line farm unit used at Nanuca whilst Figure 4 gives the dimensions, layout, material requirements, and possible yield and income from a 320-line farm. Many farm sizes are of course possible, depending on the time and manpower inputs possible, but it is suggested that farmers use either 320 or 480 line farm units to begin with, and to expand at a later date if they so desire.

A generalized practical planting programme for the development of a typical farm unit is summarized in Table 1.

Table 1. Farm unit planting programme.

Thereafter, the programme should be adhered to in order to establish the 8 week rotational harvesting and re-planting cycle. The total development time can only be shortened by quicker preparation in weeks 1 to 4.

The Economics of Farming Seaweed

Table 2, gives an indication of the costs involved in setting up similar systems at the SSP Nanuca farms. The costs for the different sized units can be reduced considerably if posts can be cut by the farmer rather than bought.

Prospective for the Seaweed Industry in Fiji

The SSP company farm at Fawn Harbor is currently in Stage 1 of establishment and will have 24 units of 1,600 lines each operational by January 1990. Depending on the success of stage 1, it is planned to expand the farm to 60 units by the end of 1990. SSP is also planning to establish similar, but smaller farms at two other Fiji locations in 1990.

The company, in collaboration with the Fisheries Division, will also encourage and assist the establishment of further small-scale owner-operator farms. The immediate aim is to increase total Fiji production of Eucheuma cottonii as far as possible whilst the world market price remains high, with the eventual aim of establishing a processing plant in Fiji if such proves feasible. Meanwhile, the Fisheries Division plans to research diversification of the seaweed industry, both into different species and different cultivation methods.

Table 2. Materials requirements and approximate cost per item.

Figure 1. Seaweed lines support system.

Figure 2. Lines, clips, line attachment, and spacing.

Figure 3. Layout for a 1,600 line seaweed farm.

Figure 4. Layout for a 320 line seaweed farm.

LESSONS FROM THE HISTORY OF SEAWEED CULTURE
IN THE PHILIPPINES AND THE TREND OF SEAWEED FARMING
IN SOUTHEAST ASIA

by

Gavino C. Trono, Jr.

College of Science, University of the Philippines
Quezon City, Philippines

Introduction

Although seaweed have long been utilized as foods in some parts of the country the production of seaweed for commercial purpose is fairly recent. Prior to 1970 (Table 1), the production of several economic genera such as Gracilaria, Eucheuma, Gelidiella and Caulerpa was dependent on harvest of wild stocks. After the Second World War the demand for agar by industries had significantly increased to the extent that the traditional source of Gelidium and Pterocladia, which were the main raw materials for agar manufacture, could not satisfy the demand especially by the food industry. A substitute material was necessary to fill the gap in the supply of phycocolloid. Carrageenans were found to be good substitutes. Prior to the 1960's Indonesia was the main source of Eucheuma for carrageenan manufacture. However, the internal problem in Indonesia had made the acquisition of dried Eucheuma very difficult and the industry had to locate a new source of this raw material. Philippines was a natural choice. In the early 1960's Marine Colloids, Inc., a U.S. based company started buying Eucheuma in the Philippines. Production (Table 1) from 1960's to 1973 came mainly from the harvesting of wild stocks. Accessible reefs supporting natural stocks of Eucheuma and E. spinosum in Northwest Luzon, Central and Western Visayas, and Mindoro and its neighbouring islands were the first ones to be subjected to the harvesting. After a few years the stocks were gone due to over-exploitation. Production significantly decreased during the later part of 1960 and early 1970s during which gathering had to be extended to far flung reefs to maintain the few hundred tonnes of production.

The problem of over-exploitation and eventually loss of local stocks was anticipated by Marine Colloids, Inc. (MIC) so that as early as 1968 research and development works were started. The main components of the research and development were inventory (taxonomy) and assessment of local stocks (distribution and abundance), ecological studies, and biochemical studies of the phycocolloids. These works were conducted under the general direction of Dr. M.S. Dotty of the University of Hawaii with funding support from U.S. Sea Grant and Marine Colloids, Inc., while the actual field implementation and management was done by Mr. Vicente Alvarez, who was then the Manager of MCI branch in the Philippines. The success of the research and development works and the eventual development and commercialization of Eucheuma farming in the Philippines is mainly attributed to the persevering and determined efforts of Mr. Alvarez.

The first sites where pilot and experimental farms established were on the island of Ilin in Mindoro and Calatagan, Batangas (Fig. 1). The primary consideration was the accessibility of the sites to Manila where the Marine Colloids, Inc. office was located. The pilot site at Ilin was the main research and development station of MCI while Calatagan which started later was run privately by Mr. Alvarez.

Table 1. Records of Philippine seaweed/seaweed products exports from 1967 to 1987.

(*) One Philippine Pesos equivalent to US$

Source:Bureau of Fisheries and Aquatic Resources Statistics.

After a year or so, MCI stopped its operation in Ilin island due to ecological problems. Surveys for a potential site for the establishment of a pilot farm was carried out in the province of Sulu, specifically in the Siasi Island group. In 1970 the reef in Tapaan Island about 5 km from the island of Siasi was chosen as the pilot site. The ecological conditions in the site was such that Eucheuma was successfully farmed in the area. In 1972 a sizeable amount of farmed Eucheuma was produced in the pilot farm. Thus, making Tapaan Island the first viable commercial farm in the area. In the meantime, research and development works were also done by Mr. Alvarez in Calatagan, Batangas and this area became the first successful family farm in Luzon in the early 1970s. The successful operation of the Marine Colloids farm in Tapaan was short lived due to the interference from some powerful and interested quarters in the area.

The Tapaan experience had convinced government agencies of the potentials of Eucheuma farming as an alternative source of livelihood and so the need to extend the technology to fishermen was a primary concern at that time. The first training/workshop on Eucheuma culture was held in Zamboanga City sometime in 1971 sponsored by the Bureau of Fisheries and Aquatic Resources (BFAR) and the Marine Colloids (Phil.) Inc. Participants were the extension officers of BFAR and private individuals.

Figure.1 Pilot farming sites, present production areas and new areas presently being developed for Eucheuma farming.

Before MCI completely stopped operations in Tapaan Island, the company under Mr. Alvarez organized mobile units of trainers which went to different sites in Tawi Tawi extending technical expertise to interested fishermen. The initial efforts were met with resistance from local folks who did not see the economic potentials of the farming of Eucheuma. However, through persistence and hard work the mobile training units succeeded in organizing a number of locals to start farming in the areas of the islands of Sitangkai and Sibutu. The good rapport and linkage with local leaders was, indeed, an essential factor which led to the generation of interest to the economic importance of farming as a livelihood activity. The first peak in production of Eucheuma through farming was in 1974 when more than 5,000 mt of dried Eucheuma was exported to the U.S. Like other growing industries, the Eucheuma industry suffered its first slump in 1975–76. The confluence of many new entrants into the marketing of the seaweed resulted in serious problems caused by highly competitive buying activities, resulting to highly volatile market system characterized by highly fluctuating prices. The industry was subjected to the unstable buying/pricing by traders dictated upon by the demand in the international market. The need to produce more during the intense buying periods had resulted in the production of low quality farm produce. In addition, speculative buying due to the peace problems in the South had forced at least one company, the GENU Products of Copenhagen Pectin to temporarily move out from the area to open a new production area in Central Visayas. This company was able to establish and develop new farming area in the Danajon Bank in Northern Bohol after almost three years of research and development works.

At present new areas in the province of Palawan and in Luzon are being subjected research and development works as potential production/farming sites. The towns of Sitangkai and Sibutu has gone a long way and have become so progressive that Sitangkai is known as the “Venice” in the Southern-western most tip of the Philippines Archipelago. It is a good example of an economic miracle from a formerly unknown fishery resource. Now every nook and corner of reef accessible to local folks are being farmed. Several farming communities have been established on the reefs chains between Tawi-tawi and Southern Palawan. Production areas are continuously expanding in response to the high demand in the international market for carrageenans.

At present no less than 70,000 fisherfolks have been estimated to be directly involved in the farming of Eucheuma.

Lessons Learned from the Philippines Experience

The successful development of the Eucheuma farming into a major fishery industry was realized as a result of hard work by several people in the academe and in the industry. Among the salient points which can be learned from our experience in the Philippines, the following are outstanding.

A Good Research and Development Program

There is really no substitute for a good research and development program, the results of which can be used as basis for the successful development of a farming technology. Information on the biology and ecological requirements of the species have to be available as criteria in selecting a potential site for farming. The assessment of the site by test planting utilizing the species is indispensable and is the ultimate basis for a decision to farm or not to farm the area. Thus, selecting a good site is a very important consideration which will assure success.

Where farming is to be introduced for the first time the monitoring of growth rates should be extended to consider the possibilities in the growth of Eucheuma in the area.

The use of a biological superior strain is an important factor influencing the productivity of the farm. The present strain of Kappaphycus alvarezii (E. alvarezii) commercially known as the “cottonii” and Eucheuma denticulatum commercially known as the “spinosum” have been products of selection. The present practice of selecting the best looking seedstocks from the newly harvested seaweed crop is a good practice for farmers.

Factors in the Development of the Seaweed Industry

The problem associated with the introduction of new forms of livelihood among people who are so used to the traditional forms of livelihood, is convincing them of the economic feasibility of the new endeavor. The introduction of new forms of activity very different from the livelihood they have known for so long would immediately illicit a “wait and see” attitude. Thus, the need for an information drive on the economic feasibility of the livelihood coupled with a good demonstration farm to show the economic gains which can be derive from the farming activity are considerations which can convince and motivate them into the project.

The availability of some form of funding support needed to start a small project and the technical guidance needed are additional incentives. In rural areas where the people are poor, the thought of even a small amount of initial investment may lessen the interest of these people to go into a new venture such as seaweed farming. Thus, in our experience the offer of funding support to cover the initial costs of the materials needed is another incentive because those interested may not need to divert a part of their already programmed funds to this new activity.

After the successful introduction of Eucheuma farming, the industry went through a series of “crest and troughs” which are reflected in the cyclic fluctuations in the production (Table 1).

The industry went through this fluctuating cycle which had been identified as caused by the weak and inefficient marketing and pricing systems, and the poor quality of the produce brought about by poor harvest and post harvest handling practices. In addition, the industry has been subjected to unstable pricing/buying practices of traders. These conditions have been worsened by speculative buying and the trading of the dried seaweed has been described as a “buyers market” The worse hit were the farmers who often suffered great economic dislocation. The thought of such future economic dislocation was one of the factors which in the past made the farmers “think twice” before they would “re-enter” the industry. Thus, it is terribly necessary that the marketing and pricing system should be stabilized to a level where the farmers receive their fair share from the industry, i.e., they should be assured of a guaranteed outlet and fair for their produce.

The quality of the products should conform to the quality requirements of the processors. The importers will not pay a good price for poor quality produce. Thus for the farmers, the post-harvest handling of the produce is an important stage in production.

Trends in Seaweed Farming

The increasing demand for seaweeds and seaweed products brought about by the development of new uses in industries is the primary factor in the present heightened efforts to produce these seaweeds mainly through farming. Thus, present efforts are geared towards more efficient production of good quality produce. As a result, modifications in the methods of production have been introduced.

Intensive to Extensive Farming Methods

The present type of support system, i.e., the fixed bottom (longline) method, in Eucheuma farming is a modification of the original method, the fixed bottom (net) method utilized at the start of farming in the Philippines. This change affected significantly the number of plants (cuttings) which can be accommodated per unit area of the farm from 100,000–110,000 plants to 35,000 to 40,000 plants per hectare. The change from intensive to the extensive method was primarily due to the high production cost (cost of farming supplies), problems associated with the construction of the farm support system and maintenance of the farm. The cost of the supplies (e.g., stakes, monoline nylon) is very much lower than the nets and the number and size of stakes are fewer and shorter, respectively. It is also very much easier to plant and harvest, as well as to maintain the farm (weeding, replanting, repairs of the support system). The growth of the plants are more uniform in the long line method than on nets where the plants are crowded.

Fixed Bottom (longline) to Raft (longline) Method

In locations where there are no shallow areas with flat substratum (reefs), the longline raft method is used. The plants grow better on raft type of support system in areas where water movement is low. The diffusion index factor (DIF) is higher on raft because water movement (current and turbulence) is stronger near the surface then at the bottom.

Company Farms to Family Type Farm

The production unit now presently in vogue is the family type farm. The change from company to family type was mainly due to the large overhead cost encountered in company farms. In addition, production is not efficient. There is very little incentive for the hired labor except the daily wage. In contrast the labor required in family farms is supplied by members of the family and their returns are significantly influenced by the amount of effort and time they put in the project.

Contract Farming

In many areas contract buying arrangements are entered into by the small family farmers and company buyers where the company buyers or traders extend “cash advances” to the farmer in return for the farmers produce where they agree on price.

Sale of the Fresh Produce

In some cases the farmer sells the fresh produce to the buyer who immediately treats the produce in alkali. The bleached alkali-treated product is very much cleaner and commands higher price.

Diversification of Farming to Include Other Species of Economic Seaweeds

Several countries in ASEAN Region have diversified into farming of other economic seaweed species. Among these are the pond and field culture of Gracilaria as raw material for agar manufacture and pond culture of Caulerpa lentillifera for food purpose.

POST HARVEST TREATMENT AND QUALITY CONTROL
OF EUCHEUMA SEAWEEDS

by

William R. Blakemore

Research Director,
FMC Corporation, Marine Colloids Division,
Singapore Regional Office, Singapore.

Introduction

Since about 1950 Eucheuma seaweeds have been used commercially for the production of carrageenan extracts. In the early years, these seaweeds were natural or wild crops but starting about 1974 when the markets for these species expanded rapidly, increasing volumes of cultivated Eucheumas were developed. As we approach 1990 most commercial Eucheumas are cultivated, particularly “cottonii”, the species Eucheuma alvarezii, recently renamed Kappaphycus alvarezii by Doty.

Much attention has been focused on marine agronomy, including selection of fast growing species and strains, various methods of farming to utilize a wide range of environmental conditions, and preservations of the plants in their ocean habitat. However, in order to produce a top quality finished product for export, it is equally important to take good care of the plants after they have been harvested. Failure to maintain quality, seriously impacts seaweed farmers, exporters, and users.

In the early years, Eucheuma volumes of wild harvests were relatively low and played only a minor role in carrageenan applications. Consequently, even significant degradation of the seaweed after harvesting had only a minor impact on the carrageenan business. However, as we approach 1990, Eucheumas represent a major and still rapidly growing percentage of the carrageenan business and semi-refined flour products. In addition, some of the newer applications responsible for the growth of Eucheuma markets are based on higher and consistent quality seaweed.

Therefore, to protect current markets and to continue to expand the markets for Eucheuma seaweeds, it is essential to develop and strictly enforce good post-harvest practices. Also, those who do not follow these guidelines may find themselves with an inferior product carrying a lower market value. In addition, it makes no sense to grow seaweed with the greatest of care in the water, only to see those efforts go to waste after harvesting.

This presentation outlines the key parameters of post-harvest care to ensure the optimum qualities for Eucheuma for use as raw materials for carrageenan extraction or semi-refined flours. Specific attention is also focused on stability during shipping and storage.

Post-harvest Treatment

Post-harvest treatment covers the steps between taking fresh seaweed from the ocean at 85% moisture and processing to export quality dried seaweed at 35% moisture. This sounds simple, but the steps of drying, cleaning, storing, transporting, re-cleaning, baling, storing, and transporting provides many opportunities to reduce or destroy the product quality. Each of these steps will now be discussed in more detail, and the key issues emphasized.

Initial Drying

The rules for good drying of Eucheuma are very straightforward in theory. They should be dried as rapidly as possible, kept clean, and not allowed to come in contact with fresh water. However, in practice these criteria can cause numerous problems. Solar drying is the most popular and low cost option, taking two days under ideal conditions. The wet (85% moisture) to dry (35% moisture) ration for E. cottonii is about 7:1 or a yield of 15%, and 6:1 and 17% respectively for E. spinosum. As measurement of moisture is difficult in remote regions and requires a high degree of precision for duplicate data, it is often useful to use wet dry yield as a good indication of seaweed moisture.

The methods for most rapid drying will have air circulating below the seaweed, for example on net racks raised above the ground. This extra circulation and reduced drying time can be very valuable when problems have been encountered as explained later.

If the seaweeds are spread on the ground, mats must be used to prevent contamination such as sand, dust, dirt, etc., which will stick to the seaweed, and raise the foreign material content above specification. Once on the seaweed, these contaminations are difficult to remove.

Under all drying methods and conditions, the thickness of the layer of plants should be adjusted to the current conditions. If drying is taking more than three days, spread the seaweed thinner over more mats or racks. “Steaming” Eucheuma, particularly E. spinosum, degrades the carrageenan very rapidly.

Contact with fresh water, particularly rain, should be avoided, as this extends the drying time and reduces the salt content, both of which causes the seaweed or carrageenan to degrade and reduce storage stability at 35% moisture.

Consequently, whenever possible, Eucheuma should be covered during rain. This is not always possible or practical. If seaweeds are exposed to rain, the supplier should accelerate the drying process as much as possible by spreading them thinner and turning them over frequently. If seriously exposed, the Eucheumas should be dried to a lower moisture content such as 20% to compensate for the loss of salt and storage stability.

For certain Eucheuma markets, the seaweeds are washed in fresh water and dried. This bleaches them. This is acceptable for only a few applications, but this washing process does not add value for the carrageenan manufacture, and in most cases reduces the carrageenan quality. These products would to be dried to 15 to 20% moisture to be stable on storage.

Effectively dried Eucheuma comprises salt covered thalli which are neither slimy nor foul-smelling, but remain flexible enough for efficient baling.

The market standard of 35% moisture for dried Eucheuma is not an arbitrary number but has been derived after considerable field research combined with detailed analytical work on the seaweeds and their carrageenan extracts.

This FMC research has shown that Eucheumas are unstable above 35% moisture and undergo degradation during storage. At above 40% moisture, the carrageenan in the seaweeds may not survive transportation to the factory, arriving with functionalities too low for some applications.

Between 25% and 35% moisture, Eucheumas are relatively stable for periods in excess of 12 months, and the thalli are ideally flexible for efficient baling. Between 15 and 25% moisture, Eucheumas are extremely stable, but the thalli are too brittle, and resist pressure or snap baling.

Eucheumas below 15% moisture remain stable, but can cause processing problems during carrageenan extraction.

Cleaning

Cleaning seaweeds is essential during both cultivation and post-harvest treatment. In the water, cleaning optimizes growth rates and reduces yield losses to produce obvious positive advantages. Cleaning after harvest maintains a high quality product which is sometimes not considered favorable by the farmer or exporter, but is definitely noticed by the carrageenan manufacture. Producers of high quality clean seaweeds are preferentially treated by buyers, both on price and volume.

Cleaning should remove non-Eucheuma seaweeds, plastics, stones, wood, and most important, any sand sticking to the thalli. Sand causes severe problems during carrageenan extraction due to its abrasive properties.

Eucheuma cottonii and E. spinosum must never be mixed, and any accidental contamination of one by the other should be immediately reversed.

Storage

Storage of seaweeds is necessary at various stages of post-harvest treatment as most individual steps are batch operations. The basic objectives is to keep storage time as short as possible, moving the seaweeds rapidly through the system.

Eucheumas should never be stored wet, especially in piles. All wet seaweed should be dried without delay. Farmers should dry their harvest to at least 35% moisture before storage because unbaled Eucheumas tend to pick up moisture during storage. All storage should be in clean, cool, dry, and well ventilated places.

Baling

Baling is carried out for two major reasons. First, bales are much easier to handle than the loose Eucheuma product, and second, it is essential to reduce shipping costs as much as possible, a key for locations such as the South Pacific Islands.

The target for baling efficiencies is a minimum of 20 mt per 6 m container. To achieve this, bales are recommended to be at least 100 kg net weight with a volume of 43 cm by 43 cm by 73 cm which will allow 200 bales per container.

Balers can be screw type (manual or mechanical) or hydraulic. Because of the importance of bale density on economics, investing in a hydraulic system is advised, particularly if large volumes of Eucheumas are being processed in one location.

Exports Specifications

Key specifications are:

Of major importance to the exporter is “yield” or “shrinkage”. This is the difference between the weight received from the farmer and the weight exported, normally the contamination of re-drying and cleaning. A scale of payment from the exporter to the farmer is recommended to reward farmers who consistently sell Eucheumas with low shrinkage levels.

Quality Control by Manufacture

It is important that the seaweed farmer and exporter know the criteria used by carrageenan manufacturers to judge the quality of Eucheuma shipments. This section details these tests and their implications on the business.

Moisture

Samples for moisture are taken by core sampling ten bales from each shipment and mixing. One hundred grams are dried in an electric oven with fan at 90 °C for 16 hours. Changing equipment, temperature, or time will produce a different moisture result.

FMC purchases Eucheumas based on 35% moisture by this test. If exporters want to carry out meaningful moisture testing on their shipments, it is strongly recommended that they install the same equipment. As it is impossible to always dry exactly to 35% moisture, FMC encourages exporters to over-dry 35% moisture and pays extra for the additional Eucheuma content. There is no economic penalty for shipping drier than specification to FMC. On the other hand, FMC pays less for seaweeds with moistures above 35%.

Moisture content data strongly influence storage and process plans, with wet shipments having to be used up immediately, normally at some inconvenience.

Contamination

Non-Eucheuma seaweeds, sand, salt, plastics, etc., are determined by hand separation and washing/drying.

Eucheuma Content

The pure Eucheuma content is calculated by difference using moisture and contamination data.

Carrageenan Yield and Quality

Each shipment of Eucheuma is tested for carrageenan yield and quality extraction and functionality measurements such as viscosity, gel, strength, etc. Abnormal data are followed up with more detailed analysis. FMC has an extensive database on Eucheuma seaweeds which can fingerprint a number of field problems. For example :

• Age of plants at harvest whether too young or too old.

• Drying efficiencies including contact with fresh water

• Storage efficiencies

• Mixing a wide range of qualities

These data are used by FMC to try to improve farming practices and supplier operations. This enhances the quality and value of Eucheuma seaweeds in the marketplace.

Competitive Product

In summary, several criteria are viewed as being essential to produce a top quality dried Eucheuma seaweed. These are listed below.

One additional factor of great importance to carrageenan manufactures is “consistency”. It is normal for process operations to prefer to receive the same reliable quality raw materials on an ongoing basis, but is critical for carrageenan manufacturing as even routine adjustments are quite complicated.

Fiji Quality

The current quality of Fiji Eucheuma cottonii is excellent, with good post-harvest practices in effect.

CURRENT STATUS OF THE SEMI-REFINED CARRAGEENAN BUSINESS

by

Iain C. Neish

Far East Operations Manager,
FMC Corporation, Marine Colloids Division

Introduction

The present paper discusses the current state of the semi-refined carrageenan business. The paper was prepared with a view toward acquainting potential entrants to the business with some of the current trends. Most producers or sellers of seaweed eventually decide to consider producing semi-refined carrageenan (SRC). I hope that the present analysis aids such people in making a decision.

Alkali-treated seaweeds are known by many names. The most commonly used one is “semi-refined carrageenan” (SRC). The production is also known as semi-refined cottonii, alkali-modified flour (AMF), and seaweed flour. The term “alkali-treated carrageenophute” (ATC) is also used. This is probably the most technically correct term in current use and is therefore the one that I use through most of the text of the current paper.

Most ATC is made from cultivated seaweeds referred to as “cottonii” in the commercial trade. Botanists refer to this species as Kappaphycus alvarezii Doty. In the past it was also known as Eucheuma Cottonii and Eucheuma alvarezii. Some ATC is also made from the species commercially known as “spinosum”, otherwise known as Eucheuma spinosum or Eucheuma denticulatum. These species are usually referred to collectively as “eucheuma”.

The ATC trade was made possible by the extensive development of Eucheuma farming in the Philippines in the early 1970's. ATC was first produced in the Philippines around 1978. It became a substantial business by 1980. There is still substantial controversy and confusion concerning the place of ATC relative to carrageenan. In the present paper I will endeavor to put the situation in perspective from our vantage point in late 1989.

Types of ATC Products

Low-Alkali Products

Live or freshly dried seaweeds can be immersed in week alkali solutions to give a ‘stabilized’ raw material. For this type of product modification of the carrageenan in the seaweeds is of little concern. The purpose of the treatment is to impede chemical or biological degradation of the seaweed.

Low-alkali treatment can be carried out in cheap and simple installations. Commonly it is done in concrete tanks or in wooden tanks with plastic liners. Such tanks usually have a capacity of two to four cubic meters. Either fresh or salt water can be used. Sodium_ or potassium-hydroxide is added to the water to maintain an alkalinity of about 0.5–1.5 N. Very fresh (preferably live) seaweeds are placed in the alkali at ambient temperature and are held for about three hours. After soaking the plants are spread under the sun and dried to a moisture content of less than 30%.

It has been found that the low-alkali ATC process works best with spinosum, which degrades more readily than cottonii and is easily modified. The treatment inhibits degradation in poor drying conditions, bleaches color out of the material and generally gives a raw material which yields superior carrageenan extract. The production is usually baled for shipment to the end user. It may also be chopped or milled and packed in sacks.

ATC Cottonii ‘chips’

ATC ‘chips’ are made in a high-alkali, high-heat process which modifies the carrageenan in treated plants to give a product with a high gel strength. The process is used with cottonii but not with spinosum, which requires mild modification conditions.

The process begins with sorting and removal of foreign matter such as rafia, unwanted seaweeds, coral and rocks. Sorted, dry material is then usually rinsed in fresh or salt water to remove sand and soften the material. It is then cooked at about 85°C for two or more hours in a highly alkaline solution (eg: 2 N KOH). The purpose of the alkali in the solution is to modify the carrageenan and increase its gel strength. The purpose of the potassium is to elevate the melting point of the carrageenan above the cooking point so it will not dissolve. Consequently the seaweeds are modified under conditions which cause them to remain whole without ‘pasting’. This is the essence of the ATC process and leads to the key differences between ATC and carrageenan.

After cooking the alkali-treated plants are washed in fresh water to remove alkali and unwanted water-soluble compounds. The process consumes large volumes of water and generates effluent high in chlorides and alkali. These factors must be considered when one chooses a plant site.

After washing the plants are generally chopped while still wet. The material is then easily handled during the next step of solar drying on a concrete slab or drying in a heated mechanical dryer. In some cases the seaweeds are dried whole, then chopped but this process is more difficult and expensive than the wet-chopping method.

Dry ATC chips are usually bagged for shipment to customers who will use it directly or dissolve it in hot water and extract carrageenan from it.

Seaweed Flour

Seaweed flour (SF) is the type of ATC product which is commonly called ‘semirefined carrageenan’. This term is inaccurate since the material is arguably neither semirefined nor carrageenan.

The seaweed flour process begins with ATC chips which have been prepared to meet set quality standards. The chips are ground using milling equipment which does not subject the ATC to excessive heat which can degrade the product. ATC is difficult to grind and chars easily.

Milled powder is recovered using a baghouse and sieves to give an end product having maximum mesh size generally between 40 and 100 on the ASTM scale. The powder is usually blended before final packaging and sale. Prior to blending, production lots are tested for commercially significant parameters such as gel strength and viscosity. Batches of material can then be combined to give blends with the desired characteristics.

Final packaging of SF is usually in fiber drums or in woven polypropylene sacks with a polyethylene film liner. Bagged material can be shipped with 20 mt net weight in a 20-foot shipping container.

Uses of ATC

ATC in the low-alkali or ‘chip’ form is used as raw material for the production of seaweed flour of carrageenan extract. In general ATC is an expensive form of raw material which costs more than dried seaweed on a cost-per-unit-extract basis. For this reason ATC is used as a raw material only if it is required for a very high grade extract or if it is to be processed in an area with severe constraints on water supply or effluent generation.

Seaweed flour is used directly in products not intended for human consumption. The largest application for the product is in gelation of canned petfoods for the European, North American, Australia and Japanese markets. Other uses include gelation of air freshners, stabilization of industrial slurries and clarification of caton-containing liquids such as beer worts and effluent streams.

Theoretically the carrageenan content of seaweed flour lends it to application in human food products. Such uses have been discouraged by three factors, however;

• SF is not considered to be carrageenan on most jurisdictions and is therefore not proved for food use in most market areas

• SF is generally made under conditions which do not meet the hygiene standards required for manufacture of food products.

• SF generally gives end-products which are inferior to those which can be made using carrageenan extract.

Chemical Composition and Regulatory Issues

With the exception of seaweed flour, most ATC is used as raw material for carrageenan extraction. During extraction the ATC is dissolved in a hot aqueous solution and the carrageenan extracted from it goes through various chemical treatments before being clarified and recovered.

When seaweed flour was introduced to the world market in 1979 there was immediate controversy among carrageenan producers, ATC producers and regulatory agencies. This controversy continues today. Opponents of SF use in human food contend that it is not carrageenan as defined in the foods regulations of the European Economic Community, the World Health Organization, the United States Foods and Drug Administration and other food-regulating agencies. They say that SF is a new product which must be subjected to through testing before it can be approved for food use.

The most adamant supporters of SF assert that it is a true carrageenan and should be permitted for use in any carrageenan application. They contend that opposition to the use of ATC in human food is a ploy by vested interests in industry and government who are trying to prevent ATC from competing with carrageenan in the world market.

The controversy hinges around the fact that carrageenan is made by dissolving seaweeds, clarifying the resultant extract and purifying it. In the SF process the seaweeds are not dissolved and the product is not clarified or purified. Plant-fiber, alkali and various other chemical or plant constituents are incorporated into the final product. Furthermore, existing SF plants do not employ hygienic production methods. As a result SF microbe counts tend to be high. SF has a fiber content of 9–15% but a typical alcohol-precipitated carrageenan has little or no fiber in it. This is the most apparent difference between SF and carrageenan. The fiber in SF causes its gels and solutions to be distinctly cloudy and ‘grainy’ while carrageenan solutions are clean and smooth. Since most jurisdictions require that carrageenan have less than 2% acid-insoluble matter SF is disallowed as carrageenan based on the fiber specification alone.

The chemical composition of seaweed flour and a typical alcohol-precipitated kappa carrageenan are shown in table A, below. Note that SF tends to be high in heavy metals, arsenic, lead, heavy metals and residual alkali. It contains traces of nylon 'raffia' which carry through the process. It is also low in ester sulfate and soluble-gum level. All of these are factors which are said to disqualify as a true carrageenan.

Table 1. Composition of carrageenan and seaweed flour (Analyses by FMC Marine Colloids Div.)

There are two avenues open to those interested in having SF approved for human food use. Both will involve lengthy testing and multi-million dollar expenditures with no assurance of success in the end.

The first option is to seek changes in food regulation so that SF becomes classified as carrageenan. The second option is to undertake sufficient toxilogical tests to have SF approved as a food ingredient in its own right. To receive such approval it will be necessary to demonstrate a technical and economic need for a new ingredient with a function similar to that of carrageenan. No company is likely to spend large amounts of money required to gain food-use approval for SF. Those who spend the money will simply be undersold by producers who invested nothing in gaining the approvals.

Market Trends: Past, Present and Future

The markets for low-alkali ATC and ATC cottonii chips are tied directly to the markets for cottonii and spinosum raw materials. Makers of carrageenan extracts pay a premium for ATC but must keep their cost-per-unit-extract minimized in order to remain competitive in a marketplace which can choose to buy gums other than carrageenan. If ATC price premiums get too high the extractors buy raw seaweeds.

Seaweed flour is interesting to any prospective producer because it gives the illusion of being a 'specialty chemical' which can be sold for a high margin. To a degree SF was sold as a specialty chemical in the early 1980s when ATC was first produced. Today, however, seaweed flour sells as a commodity. Cut-throat pricing among producers has reduced profit margins to razor-thin levels. At the same time heavy raw materials demand has the price of seaweeds up to record levels, often forcing producers with long-term contracts to sell SF as a loss.

In the early years of SF production the business was very attractive financially. SF prices were as high as US$ 5,000 per mt and one mt of SF could be made from about $800 worth of seaweed. By 1984 prices of SF had fallen below the $4,000/mt mark while it took $2,000 worth of cottonii to make one ton of product. By 1989 SF prices had fallen to as low as $3,000/mt and it took about $2.400 worth of seaweed to make a ton of SF. If you add the cost of commercial sand and other production costs you can readily see that the days of high SF profits are gone.

The seaweed flour market is largely a creation of large petfood canners serving marketing in Europe, North America, Australia and Japan. In the mid 1970s some of these companies were packing gelled products made using agar, carrageenan extract, locust bean gum and other gelling agents. Then, as now, these companies were seeking cheap gelling agents. They found that crude locust bean gum could be blended with powdered ATC to give a suitable gel. ATC producers started to make standardized blends for the petfood business and the market grew rapidly (Table 2). To this day the SF market is dominated by the petfood market, and in particular by one company which uses its massive purchasing power to keep prices as low as possible

Under current conditions, few established SF producers can make a profit and investment in a new plant is a high-risk proposition. The 'commoditization' of the new business is probably an irreversible phenomenon because:

1. Technological and financial barriers are so low that new producers can easily enter into the business.

2. Because of the low profit and the low barriers for entry, producers able to do toxicological tests or to develop specialty applications will not do so. They know that they will invest large sums of money only to be undersold by 'me too' products from other suppliers.

This state of affairs means that new markets for SF will probably not open up unless endusers take up the initiative and develop new applications.

Table 2. Production of ATC in metric tonnes

Prospects for ATC Production in the Pacific Region

Currently, almost all ATC is produced in the Philippines. Modest amounts have been produced in New Zealand and France but neither of these countries have developed as a major source. A number of plants have been built or are planned for Indonesia and this country, with its huge raw material production potential, is bound to be a major force in the ATC markets of the future.

ATC is a commodity and for a given quality price is of paramount importance. Pacific producers who want to enter the ATC market must realize that they are entering a mature market with producers in countries having low labor costs, abundant seaweed resources and low shipping rates to major markets.

Presently the raw material base of the Pacific region is too small to support production of seaweed flour. A SF plant should have annual production of at least 1,000 mt/yr to be profitable, although a 500 mt/yr plant may not be out of the question. It takes 4– 5 mt of seaweed to make one ton of SF so raw material needs range from 2,000–5,000 mt/yr for one factory.

ATC 'chips' can be produced in a very simple plant which is cheap to build. If markets are attractive ATC chips could be made at almost any scale of raw material production.

ATC production requires plenty of fresh water; about 50 m³/mt produced. Of course this also means disposal of large volumes of effluent high in alkali and chlorides. It is not financially feasible to remove these chemicals from the effluent stream so processing must be done in a place where effluent can be discharged after some simple treatment such as settling. The wastes from ATC production are not toxic in dilute form, however. In fact they can be used as fertilizer where potassium is required.

A 1,000 mt/yr seaweed flour plant can be built for one to two million dollars (assuming that taxes and duties are not high). It would employ 50–100 people; mostly in unskilled jobs. It would require about 500 KVA of connected electric power and the equivalent of about 10 mt/day of firewood to provide heat if mechanical dryer is used.

I am often asked about return in investment for a SF plant. At present a newly constructed SF plant would probably operate at a loss. In the long run profit margins of $100–500/mt can probably be expected by the lowest-cost producers.

ADDENDUM

In his presentation, Dr. Neish also gave a rundown on the current state and prospects of the Eucheuma industry, and this information is summarised in the following tables (3 to 5).

Table 3. World carrageenophyte trade. Demand is expected to grow at around 10% per annum. Note “RI” means Republic of Indonesia. “RP” means Republic of Phillipines.

Table 4. Seaweeds purchased for Carrageenan. The volume is expressed in metric tonnes per year.

Table 4. Eucheuma buyers by country.

PROSPECTS FOR EUCHEUMA MARKETING IN THE WORLD
AND THE FUTURE OF SEAWEED FARMING IN THE PACIFIC

by

Dennis J. McHugh

Dept. of Chemistry, University of New South Wales,
Campbell, Australia

Present Market and Future Prospects for Eucheuma

An earlier market study of Eucheuma was made in July 1987 (McHugh and Philipson, 1989). At that time there was an oversupply and prices were falling. Indonesian Eucheuma cottonii had an f.o.b.¹ price of US$ 265 per mt and it was estimated that this could possibly fall to as low as US$ 200, a figure which represented the lowest return for which farmers were likely to continue to produce. The corresponding c.f.² price, Europe, was US$ 355 per mt.

A survey of some of the major seaweed buyers in October 1989 showed that a dramatic reversal of the situation has occurred. Demand now exceeds the supply and the resulting shortage has led to a c.f. price, Europe, of US$ 700 per mt double that of mid-1987. By mid-November the price in Indonesia had risen to US$ 800 but there were few buyers at this price. The shortage of Eucheuma has occurred chiefly because of two factors, first a levelling off of production in the Philippines in 1988–89 (Table 1) and second, an increase in demand from carageenan manufacturers (Table 2).

Production in the Philippines did not increase for several reasons. Typhoons caused losses in northern producing areas around Cebu. The price of Manila hemp and copra increased so some farmers in the Tawi Tawi area turned to these. Some of the southern seaweed farmers moved to Sabah, a safer place to live, where good work is available.

The increase in demand for Eucheuma is due largely to a greater demand for the carrageenan which is extracted from these seaweeds. The growth in consumption of convenient foods and low-fat meat products in developed countries has opened up new markets for carrageenan. Chicken pieces cooked in a microwave oven can become dried out and stringy. Carrageenan can be injected into chicken pieces as a suspension in brine; when the chicken is cooked, particularly in a microwave oven, the carrageenan dissolves and forms a gel which helps to maintain moisture in the meat and to improve its texture. Delicatessen lines made from meat with a low fat content require a binder to hold the compressed meat loaf together and carrageenan is often effective for this purpose. Carrageenan demand is also linked with the increasing sales of anti-tartar toothpastes; these toothpastes have a higher content of salts which are incompatible with some toothpaste thickeners but are compatible with carrageenan.

1. f.o.b. is free on board. It is the price offered on condition that the seller meets all costs until the goods are loaded on the ship at the port of export. The buyer meets all further costs.

2. c.f. is cost and freight. It is the price offered on condition that the seller meets all until the goods are delivered to the buyer's port. It includes the cost of freight from the seller's country to the buyer's country.

Table 1. Eucheuma cottonii production (mt), demand and price.

Since the demand for Eucheuma is linked to that for carrageenan, prospects for the latter are discussed first. Table 2 shows that world production increased a little from 1988 to 1989 but most manufacturers are now operating their plants close to full capacity and several plan to expand in 1990. This should lead to an increased output of 10–15% for the next two years, with E. cottonii products at the higher end of this range. Meanwhile world demand is expected to continue to increase by about 10% per year for the next 3–4 years so it is doubtful that production will match demand before 1992. The actual output of new manufacturing facilities may be determined by the availability of Eucheuma raw material. The figures in the table are for carrageenan as sold to end-users; this usually contains other necessary additives which depend on the intended application. The amount of pure carrageenan (no additives) produced in 1989 is estimated to be about 11,000 mt.

Seaweed flour (formerly called semi-refined carrageenan) is also produced from Eucheuma and its production, demand and price are shown in Table 2. Production should continue to match demand, and demand is unlikely to increase very much unless new applications are found. The principal application is in the manufacture of canned petfoods and this market is dominated by one organization. The price has remained the same for the past two years and some producers are believed to be selling at a loss. As contracts are renewed it seems inevitable that some price rise must occur to compensate for the increased price of seaweed.

The trends in productions, demand and price of Eucheuma cottonii are shown in Table 1; the prices for the last three years are for October/November of each year. The Philippines and Indonesia are the major producers and are likely to remain so in the medium term. Production in the Philippines should increase by about 10% a year as some Tawi Tawi farmers return and others lift their productivity. However for any greater increase, new farming areas would have to be developed. On the other hand, Indonesian production is increasing rapidly, with most farming in the Bali area; the predicted figures in Table 1 could be exceeded if prices remain high and Eucheuma farming is developed in other parts of the country. The figures for world demand in the table show the unbalance with supply which started to develop in the latter part of 1988; the present difference between supply and demand is expected to last at least until 1991. It is not feasible to try to predict beyond this point.

Table 2. Carrageenan and Seaweed Flour production (mt), demand and price.

Eucheuma spinosum is a source of iota-carrageenan but the use for this is not as great as that of kappa-carrageenan, which is derived from Euchuema cottonii. Consequently the demand for E. spinosum, shown in Table 3, is not as great as that for E. cottonii. In the Philippines, E. spinosum has always been more difficult to grow than E. cottonii so farmers usually prefer to produce E. cottonii. In Indonesia, wild E. spinosum grows well in many parts of the country and around Bali it is cultivated as easily as E. cottonii. These differences are reflected in the production figures shown in Table 3. The production in the Philippines has been gradually declining since 1987 while Indonesian output has increased rapidly so that now it is about six times greater than the Philippines. Indonesian farming is expected to continue to expand, to fill the gap between world demand and the Philippines production. In the past the price of E. spinosum has usually been a little lower than that of E. cottonii so the predicted values in Table 3 reflect this, until about 1991. However unexpected surges in demand can cause price fluctuations; a past example has been the purchase of bleached E. spinosum for the food market in Hong Kong while at present large amounts are being shipped to China for unknown uses.

In summary, new uses for carrageenan have led to surge in market from 2–3% to about 10% a year. This in turn has led to a shortage of raw materials and the price of Eucheuma cottonii has doubled in the past eighteen months. This shortage is expected to continue for at least the next two years.

Future for Seaweed farming in the Pacific

With the present production from the Philippines (51,000 mt) and Indonesia (14,500 mt), the Pacific countries can only expect to be minor producers in the short to medium term future. They will therefore have to match the c.f. prices offered to the major producers. Two years ago, with c.f. prices for Europe at US$ 350, the only viable destination was New Zealand, because of freight costs. At current prices of US$ 700, it is possible to sell profitably to Europe, at least from some Pacific countries.

Table 3. Eucheuma spinosum production ( mt ), demand and price.

Countries interested in undertaking seaweed farming, at any time, need to consider two questions:

• Is seaweed cultivation worthwhile at the current c.f. price?

• At what c.f. price would seaweed cultivation cease?

Both questions can be answered by using the following method to estimate costs and returns.

In the first question, “worthwhile” is something that has to be defined for each country, taking into account the cultures and attitudes of its potential seaweed farmers. Some may only be interested in working for short periods with small profits while others may see it as not worthwhile unless larger profits are possible, even if the working hours are longer. These ideas lead to the first monetary matter which should be considered.

A. What is the minimum acceptable income for which a seaweed farmer will work? Some factors which will affect this are:

• the minimum daily wage for the country;
• potential income from alternative occupations;
• the need/desire for money.

The minimum daily wages for some countries are shown in Table 4. It can be seen that the main Eucheuma producers, Philippines and Indonesia, have very low wages' while the figure for Palau is high, people in more remote areas of the country may find lower wages quite acceptable. Occupations such as fishing, copra cutting and farming are some of the alternatives available to seaweed farmers and experience in the Philippines has shown that they will move to these if the return from seaweed becomes too low. Subsistence farmers sometimes have little need for money and this may influence their decision about the minimum acceptable return from seaweed farming.

Table 4. Minimum daily wage for various countries (in USD).

B. What are the farming costs?

Other speakers in this workshop have already covered these costs and further examples have been given by Smith (1986). Initial investment costs may include seed plants, monoline/rope, stakes, floating frames, hand tools, baskets, boat, engine, drying racks, sometimes a farmhouse. Operating costs include tie-ties, gasoline, replacement of stakes, monoline or frames and maintenance of equipment such as the boat, engine, farmhouse etc. Obviously these costs will depend on the location of the farm and the farming method used. Sometimes some transport costs to the seaweed buyer also have to be borne by the farmer. These costs, and the minimum acceptable income, should be based on a “per tonne” basis; for example they could be estimated for a full year and divided by the tonnes of seaweed which are expected to be harvested annually.

A + B = farmgate price (minimum)

The addition of A and B needs to be at least equal to the farmgate price on offer for the seaweed. Since the calculation involves the minimum acceptable income, A + B must be the minimum farmgate price. When the price falls below this value, farming may cease.

The market chain for seaweed usually includes at least one trade/exporter who buys from the farmers and sells to the carrageenan producers. His costs need to be estimated.

C. What are the domestic costs?

This is the cost of transporting the seaweed from the farmer to the warehouse of the exporter, and later from there to the port of export. The methods of transport and the costs will vary considerably from country to country. In Fiji, some seaweed is transported by road from Raki Raki to Lautoka; near Bali it is taken by a small boat from Nusa Lembongan to Bali and later by road and ferry to Surabaya; in Kiribati, some must be transported by the country's shipping line from an outer island to Tarawa.

D. The trade/exporter must add the cost of:

• inspection, sorting and repacking into bales;
• losses of seaweed and moisture (called “shrinkage”);
• overheads - power, depreciation on buildings and equipment etc.;
• interest on borrowed money;
• profit margin.

A + B + C + D = f.o.b. price required (minimum)

The addition of A, B, C, and D will equal the minimum f.o.b. price required for the farmer and trader/exporter to operate profitably. If the available f.o.b. price is less than this, then either the trader must operate at a lower profit or a loss, or he must lower his farm-gate price and run the risk of the farmer ceasing to farm.

To calculate the available f.o.b. price, Pacific countries need to take the c.f. price on offer to the major producers (Philippines and Indonesia) and subtract the freight costs from their Pacific country to the country specified in the c.f. price.

current c.f. price - freight = f.o.b. price available

A country can farm seaweed profitably at the current c.f. price, if the f.o.b. available is greater than the f.o.b. required.

The value of the f.o.b. available will be affected by the currency exchange rate of the country making the calculation. c.f. Prices are usually expressed in US dollars as are the rates for international freight. Therefore the calculated value of the f.o.b. available is usually in US dollars and must be converted to the domestic currency for comparison with the f.o.b. required. For example in Fiji, in early 1987 a difference of US$ 100 between the f.o.b. available and the f.o.b. required was equivalent to F$ 88 but after devaluation later in the year it was equivalent to F$ 125.

Finally, the need to pack and bale seaweed carefully is highlighted by the dependence of the available f.o.b. on freight costs. If freight from a Pacific country is US$ 3,000 per 20-foot container to Europe, then 20 mt of well packed seaweed will cost US$ 150 per mt. If only 15 mt of seaweed can be accommodated in the container, because it is too dry or otherwise too loosely packed, the cost will rise to US$ 200 per mt. Careful drying and good baling equipment are essential for Pacific countries.

From the above considerations, it can be seen that if it is not possible to make predictions for the Pacific areas in general, each country must make its own estimates of costs and profitability. Costs will vary according to its geographical location, the farming areas available, the farming methods used, the expectations of its farmers and the estimated size of the annual harvest. A pilot farm is highly desirable for reasonably accurate estimates to be made, particularly the annual yield of seaweed. Others in this workshop have already spoken of the variations in yield from one area to another. Profitability is largely dependent on future prices for seaweed. The price of Eucheuma has a history of fluctuations. Therefore like any other business enterprise, seaweed farming has its risks. Perhaps the seaweed farmer should be encouraged to try to diversify into other types of seaweed or to maintain other activities, such as fishing and farming, so that his risk is reduced should the price of Eucheuma fall.

References

McHugh, D.J. and Philipson, P.W., 1989. Post-harvest technology and marketing of Eucheuma seaweeds. In: The marketing of marine products from the South Pacific, P. Philipson (ed), University of the South Pacific, Suva, p.143–163.

Smith, I.R., 1986. The economics of small-scale seaweed production in the South China Sea region. FAO Fisheries Circular No. 806, 26 pp.