2.0. FISHERIES STATUS OF MYANMAR

Myanmar is an agrarian country, endowed with equitable climatic conditions and vested with an abundance of land, water, fishery and forestry resources. The agriculture sector which includes agriculture, forest, livestock and fishery sub-sector, is the most important sector in Myanmar's economy, accounting for about 46% of GDP% and about 79% of export earnings as of in 1995–96. Three quarters of Myanmar's population is rural, and the agricultural sector directly or indirectly engages two-thirds of Myanmar's 44.47 million inhabitants. The maximum sustainable yields (MSY) of Myanmar is estimated at 1.05 million MT. Myanmar has a long coastline of 2832 kilometres with a continental shelf area 225000 square kilometres. The Exclusive Economic Zone extend seawards to a distance of 200 nautical miles from the baseline. Aquaculture development is still very limited and there is substantial scope for expansion. In 1996–97, over ninety thousand acres of ponds produced eighty five thousand tons of freshwater fish and prawn. (Table 1)

source: DOF

Table 1: Aquaculture production and acreage

In 1995–96 Myanmar produced about eight hundred and thirty three thousand metric tons of fish and shrimp from fresh water and marine fisheries. Out of this, only fifty four thousand metric tons was exported. (Table 2)

Source: DOF

Table 2: List of Fisheries Products Exported In (1994–95), (1995–1996), (Including Border Trade)

2.1. MEASURES TAKEN TO PROMOTE DEVELOPMENT IN FISHERIES SECTOR

With the adoption of the market economic system, Myanmar has opened up its doors for foreign investment. The Government of the Union of Myanmar has been striving hard to promote all round development of its national economy to improve provisions of food, clothing and shelter for the people so as to ameliorate their living standards. Steps have been taken to ensure mass participation with maximum utilization on the basis of equality and mutual benefit.

The Government has also envisaged such policy objectives as exploitation of abundant resources of the country with a view to catering to the needs of the nation in the first instance, exporting whatever suplus available, creation of new employment opportunities as the economic activities expand so that young people would have great job opportunities and privileges of learning on job training, as well as technical training both inland and abroad, economic and social development of various regions of the state along with expansion and improvement of transport and communication.

Foreign investors who invest and operate on equitable principles would be given the right to enjoy appropriate economic benefits, to repartriate them, and to take their legitimate assets back home on closing of their business. They would also be given proper guarantees by the Government against nationalization of their business in operation.

To make legal provisions for investment in Myanmar, the Government has enacted the Foreign Investment Law on 30 November 1988. The state had promulgated four relevant fisheries laws to manage the industry and to protect the environment more efficiently and effectively.

Export potential of shrimp is rather limited due to lack of capital market, insufficient onshore facilities such as ice plants, cold storages, canning factories and fish-meal plants. In order to increase shrimp production and export, construction of cold storage facilities, fish meal plants, canning plants and also establishment of marine as well as freshwater and shrimp hatcheries along the entire coast has been included in the sectorial development plans of Fisheries Department of Myanmar.

Since Myanmar has huge potential of assured prospects, great diversity in aquatic resources, well defined discipline and most of all a clean natural environment, there will be no unpleasant consequences of fishing and farming in fishery industry.

Economic Activities (Fishery) Eligible For Foreign Investment are:

Breeding, fishing, processing, and marketing of freshwater and marine fish, prawns, shrimp and other aquatic organisms including fish fry, fingerlings, post larvae of shrimp production, processing, marketing of all kinds of fish/shrimp feeds. Excluded are, breeding and culturing of fish and prawns/shrimp in some restricted areas conserved for research by the Government.

2.2. MARKET BRIEF ON AQUACULTURED SHRIMP

2.2.1. International Shrimp Market

Over the last few years, the world shrimp supply has increased primarily as a result of increasing global demand. Landings increased from 1.82 million tonnes in 1983 to 3.06 million tonnes in 1994. Although technological developments in fishing methods contributed to the higher landings, aquaculture has been the major force in increased world production during the last 6–7 years. Cultured shrimp production increased from 341,000 tonnes in 1986 to 758,000 tonnes in 1994 and of the total, Asia's contribution was about 80 percent.

Major Asian contributors are Thailand, Indonesia, India, the Philippines, Vietnam, Bangladesh and China. Among these countries China is the only major producer of white shrimp (P.orientalis). The rest of the Asian aquaculture giants produce black tiger (P.monodon).

World shrimp exports reached 1 million tonnes with a value of US$ 8 billion in 1994. Leading suppliers were Thailand, Indonesia, China, India, Ecuador, the Philippines, Hong Kong and Denmark. However, one should note that the latter two countries are mostly re-exporters.

Japan and the USA were the dominant importers followed by Europe. However, it is interesting to note that the EU as a single market imported more than the total of Japan or USA. The EU imported over 400 000 tonnes of shrimp in 1995, of which about 315,000 tonnes were fresh and frozen products. Although European market preference for coldwater shrimp is strong, tropical shrimp supply to Europe increased by 60 percent during 1984–90.

The Indo-Pacific region is the primary supplier to Japan while producers in the Americas have been the principal sources of supply to the US market. Western Europe is supplied chiefly by countries in the Northern Atlantic, and Africa. However, due to revolutionary developments in shrimp culture, particularly in Asia, the traditional pattern has gradually changed. A steady increase in production, improved accessibility to market information and improved transport facilities have also contributed to the changing patterns of the international market.

About four percent of the world's imported shrimp are being traded in fresh form, 84 percent in frozen form, 8 percent prepared/preserved (cooked and canned shrimp) and 1 percent in dried form.

2.2.2. Prices In The International Market

The prices of major species and all sizes of shrimp declined during 1985–89. During this period year-end prices of black tiger shrimp from the Philippines, for example, declined 37–38 percent, while Chinese white shrimp prices dropped by 26–42 percent in the Japanese market. Little effort has so far been made in the area of marketing to distinguish cultured shrimp from shrimp produced from capture fisheries. At the exporters' level, some differentiation in prices between wild-caught shrimp and cultured shrimp of the same species, size and origin exist particularly when Japanese traders are involved. However, at the retail market level price variations can rarely be noticed. Although continuity of supply and consistency in sizes, combined with good quality, is creating an awareness of the advantages of using cultured shrimp, it is still traded equally with the wild-caught ones.

The rapid decline in prices caused by the aquaculture boom, competition from exporting countries and the strong Yen have undoubtedly been the major factors in the increase in shrimp consumption, particularly black tiger in Japan, USA and to some extent in Europe.

The decline in shrimp prices has contributed to a change in the market structure both in Japan and the USA. In 1982 Japanese institutional consumption accounted for over 75 percent of total usage and in the USA it was more than 80 percent. (U By 1988 home consumption had taken a 55 percent share of the total usage in Japan and by 1990 US retail sales accounted for 30 percent of the total consumption.

The Japanese market always sets price trends for black tiger and white shrimp in the international market. High inventories and very low domestic consumption during late 1988 due to the Emperor's illness and eventual death, caused black tiger prices to drop to US$7.50/kg for 16/20 counts during mid-1989 from US$13.50 in early 1989 and US$17.40 in mid-1988. Predictably it had a chain effect on the US and European markets. However, the market recovered within a year. In 1992 black tiger shrimp prices moved up again to US$14.50 for 16/20 counts as consumption improved in the Japanese market.

Prices of black tiger and white shrimp began to increase further when 80 percent of the Chinese farmed shrimp were wiped out by disease in 1993. Supplies from China have been low since then, which has created a shortage in the international market. Landings from the sea have remained unchanged for sometime now. Increases in cultured black tiger shrimp in India and other Asian countries could not fill the vacuum created by decreased exports from China.

Demand for shrimp in the Japanese and US market was strong during 1993–1996. On the other hand there was an overall shortage in producing countries. As a result international shrimp prices, particularly of headless black tiger and white shrimp, reached record levels in early 1996.

Due to the strong yen, domestic prices in Japan were not affected which helped to keep the domestic market reasonably strong despite the on-going recession in the country. The wholesale price, for example, for 16/20 Thai headless black tiger shrimp was ¥1695/kg in May 1992 when the c&f price was at the level of US$12.20/kg. In May 1995 the domestic market price in Japan was ¥1639/kg as the international market price escalated to US$17.50/kg for the same size shrimp.

For black tiger shrimp the counts 16/20 (headless) and 21/25 are usually taken as the parameters in international markets particularly in Japan. Thai and Indonesian black tiger followed by Indian products usually fetch the highest price in the Japanese as well as US markets. The price difference varies from US$0.50–1.00/kg depending on whether the products are bought from reputable packers or ordinary packers.

White shrimp usually has a higher value in the market than black tiger. However, the price difference has narrowed substantially due to consistent supply of quality cultured black tiger. Again, blue tiger fetches from US$0.50–0.75/kg less than the same grade black tiger in Japan market.

Black tiger are sold at a very high price in certain Asian markets. In Southeast Asian markets particularly Singapore and Malaysia the retail price of live black tiger could be as high as US$12–15.00 for 30–40 pc/kg.

Increased prices of black tiger and white shrimp in 1994 and 1995 also affected prices of other species such as brown shrimp, pink shrimp and flower. However, small sizes shrimp have not gained much from these price hikes with the exception of peeled black tiger shrimp. Demand for peeled black tiger in the Japanese and US market has increased in the past two years despite the increase in prices.

Shrimp prices were at a record high during late 1996 and early 1997. For example, offer prices for 16/20 headless black tiger reached US$18/kg for Thai, US$17 for Indian and Indonesian and US$15.50 for Bangladeshi products during the first quarter of 1997, which was basically the result of short supplies from the main producing countries in Asia. The same price trend was also noticed in the US market.

However, the makets failed to retain these high offers due to strong resistance from consumers; consequently, some adjustments took place in May-June 1997. For the last six months, low supplies have continued to persist in Asian countries thus keeping prices firm in the world market.

2.2.3 Outlook

Of the fisheries products, shrimp has the highest value in the world trade. Japan, USA and Europe are the major markets and it appears that important new markets are also opening up in Southeast Asia and the Far East.

The recent market expansion in Japan and the USA has been remarkable, particularly the growth in home consumption due to lower shrimp prices. Another factor for market expansion is the increasing number of supermarkets and chain retailers entering the trade encouraged by substantial profit margins. Restaurants do not change their menu prices frequently and as a result the consumers do not get the benefit of price reduction immediately. On the other hand retail outlets are much more flexible in pricing. Naturally demand tends to increase more rapidly at the retail level than it does through institutional outlets. This is one of the reasons for increased consumption of shrimp at the household level both in Japan and USA. However retail sales both in Japan and the USA have been affected by th increase in shrimp prices. Supermarkets in Japan are no longer having promotional sales for black tiger during the high consumption season. As a result household consumption of shrimp has declined, although marginally in 1995. High shrimp prices have affected the retail market sales in the USA. Nevertheless the bigger share of imported shrimp is still channelled to the final consumers through institutional outlets.

Processing plants in Japan and USA are being adversely affected by the high cost of labour. As a result there is an increasing trend to purchase semi-prepared products ranging from peeled shrimp to breaded shrimp from producing countries, particularly in Asia.

Direct imports by the Japanese supermarkets are expected to increase in the near future. Big supermarket chains like JUSCO have set up importing companies to procure products from processors. They are also providing some kind of technical assistance to their suppliers in order to ensure the quality and proper packaging. Big importers like Maruha, Nisho Iwai and Nichirei are also importing an increasing volume of processed shrimp from Thailand, Indonesia and Vietnam. Some processors in Thailand and Vietnam process 30–50% of their black tiger shrimp into nobashi form which fetch 20–30% higher prices than the ordinary block frozen shrimp.

Supermarkets are also interested in headless IQF black tiger on tray packs. The preferred sizes are - 13/15, 16/20 and 21/25. Even for block products, exporters add value by freezing it in pans (which are called pan-frozen products) that fetch 20–30 cents more than the carton-frozen products.

A study of the Japanese market indicates that volume-wise, there is little room for further increase as the institutional sector appears to have reached saturation point with household consumption also reaching its peak. However, Japanese buyers are importing increasing quantities of value-added shrimp as domestic re-processing is becoming very expensive. This has become an incentive to Asian processors as maximum profit margin comes from value-addition. Many Japanese companies are engaged in joint-venture operations with Asian processors to expedite the importation of value-added shrimp products.

Conversely, shrimp consumption in the US market is expected to increase in view of its popularity as the number one seafood item both in preference and market value. The present low per capita consumption of shrimp should rise along with the continuous expansion of retail outlets. The possibility of major fast food outlets offering shrimp based products and any positive results from the present market testing of shrimp sandwiches in place of fish sandwiches could have a positive impact on further expansion of shrimp imports into the USA. As mentioned earlier, restaurants are expected to import more peeled and peeled tail-on shrimp in future.

At the annual convention of the US National Fisheries Institute (NFI), its President Mr Lee J Weddig commented “In our scenario the US will need to secure an additional 527 million lbs (239 545 MT) of shrimp between 1989 and the year 2000. The majority of this increase will most likely have to come from imports”. This is expected to happen if US per capita seafood consumption reaches 20 lbs from the present level of 15 lbs by the year 2000, as forecasted by the NFI.

Europe, Spain and Italy still have a strong preference for white shrimp. However, Western Europe can now be considered black tiger territory when it comes to tropical shrimp. Judging from the current per capita consumption of shimp, suothern European markets offer promising growth potential. However, the marketing effort needs to be aggressive as the popularity of shrimp in Europe is not as strong as it is in Japan, USA or in Asia. Price is another factor which will continue to influence the consumption patterns in European markets. Recently there has been a shift in demand from black tiger to freshwater shrimp in Europe as prices of the former continue to remain high since 1995. High import duty on products from Thailand and the other ASEAN countries will also shift buyers attention to other sources in future.

The Asian markets in future are also expected to consume and import more shrimp in future Considering the size of the population in the affluent provinces of Shanghai, Canton, Shenzen and Beijing in China, any slight increase in seafood consumption will have a major impact on imports in that country. The growing tariff and non-tariff barrers in the EU markets are also forcing exporters to look for alternative markets.

In the 1990s the international shrimp market will undoubtedly grow but at a slower pace compared to the last decade. Any change in market conditions in the future will depend on the strength of major currencies, disposable incomes and most of all, on the supply situation in producing countries.

During the late 1980s the shrimp industry went through many ups and downs, with a major market crash in 1989. These events helped to bring about an equilibrium to this important fishery sector. The outlook for the Asian shrimp industry is brighter than for any other shrimp producing region in the world because of its competitive position in terms of production costs, consistent supplies and a processing sector which is gaining the world's recognition because of efficiency and high output, quantity and qualitywise.

2.2.4. Export of Prawn and Shrimp from Myanmar

Source: DOF

2.3. INSPECTION AND QUALITY CONTROL

The fishery products such as shrimp are processed and marketed locally are not subjected to any regular, systematic quality testing. However, items of export are subjected to laboratory testing. Inspection and certification of exports is conducted by the Quality Control Unit of DOF.

In the fishery industry, at present, there are twenty numbers of state owned refrigeration complexes and fifteen numbers of privately owned refrigeration complexes.

There are nearly seventy (70) ice making factories in Yangon and over two hundred (200) factories around the country (Table.4)

Department of Fisheries
Tab. No 4. CAPACITY CHART OF COLDSTORAGE AND ICE MAKING COMPLEXES