DECLINING SEAFOOD EXPORTS

Seafood exports drop sharply by as much as 40 per cent last October both in terms of quantity and value

By Syed M. Aslam
July 01 - 07, 2002

Seafood exports from Pakistan has long remained subject to off-again-on-again restrictions and bans on one pretext or another in its three major markets the US, European Union and Japan. The problems from EU and Japan revolve primarily round unhygienic handling of the seafood at all levels between hauling, handling, storage, sorting, packaging and shipment. On the other hand, problems pertaining to the US comprise mainly absence of Turtle Escape Device (TED) to ensure safe release of endangered species from the fishing net.

Like the rest of the world the events of September 11 took a toll on the export-oriented seafood industry of Pakistan as the orders came to a trickle due to diminished demand in all the three major markets, particularly the US where retail sales showed drastic cut. In the preceding months, export orders shrunk substantially to hit both the exporters and the fishermen the former feeling the pinch of reduced orders while the later forced to sell their catch at uneconomical prices due to reduced exports. For while, the prices of seafood, particularly fish, fell for the pleasant surprise of seafood lovers.

Seafood exports drop sharply by as much as 40 per cent last October both in terms of quantity and value compared to substantial increase over the previous month seafood exports registered an increased in September, the first month of traditional main season during which exporters stock seafood to fetch the premium prices during the Christmas season in the major markets.

The buyers in the foreign markets were reluctant to place the seafood orders with Pakistani exporters for two primary reasons, number one the uncertainty about the timely delivery of a highly perishable item and the decreased demand in their respective markets. This, in turn destabilised the prices as well as the production while the foreign buyers misguided by the situation in the region diverted their business to other competitors like India, Thailand and Vietnam to ensure smooth supply of seafood products.

As the export orders come to a trickle, the fishermen who have long become used to demand, and get, the premium prices for their catch the bulk of which was meant for the foreign markets protested that the declining demand, and thus prices, were not offering them fair return for their work. Many of the fishermen cut the frequency of their trips or cut the duration of their voyage.

The average export prices of kiddie, small shrimp the major market of which is the EU, fell by $ 2 per kilogram to $ 2.50 per kilogram. The export prices of Jaira, or big white shrimp the major market of which is Japan, fell by an average $ 4 per kilogram to $ 8 per kilogram. On average export prices of seafood registered a drastic decline of 30-40 per cent.

Sources in the seafood industry, however, the reduced demand in the foreign markets was used as a pretext by the buyers to exert pressure on the local importers to reduce the prices of the seafood products to an unprofitable levels as clear from the prices of Kiddie and Jaira shrimps mentioned above.

As if the sharp decline in export orders was not enough, the exporters were also forced to adjust the cost of levy of war risk insurance on the seafood exports like all other foreign trade. It may be mentioned that the levy of the war risk insurance meant an extra $ 300 per container for the exporters which in addition to a weakened dollar pushed up the cost by an additional Rs 95,000 on each 40-foot container which holds an average of 25 tonnes of seafood.

Pakistan's external trade has shown a strong resilience to survive an otherwise bad situation with exports showing a small 0.97 per cent reduction over the comparative period last year. Exports from the country stood at $ 8.710 billion during the 11-month period ended May 31 but the sources say that seafood exports from Pakistan would be low this year despite situation getting better in the recent months. While its true that fisheries play a negligible role in the GDP of the country, seafood exports nevertheless contribute significantly in the export earnings of the country. About 700,000 metric tons of seafood is produced in the country every year, the bulk of which comes from the marine resources. About 12 per cent of all the seafood catch is exported. The fisheries sector employ a large number of people around 360,000. The export trends of seafood from Pakistan is marked by uncertainty from year to year, particularly by inconsistent rise and fall in unit price and the highly fluctuating quantity of exports in any given year. A most disturbing trend is the fact that while globally about third of the fish harvested is used for non-food purposes such as animal feed, fish meal and oils, Pakistan is using a sizeable portion of its seafood catch for non-food uses, in particular the animal feed.