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The Long and Short of Milkfish Trading in the Philippines

15 June 2012

Milkfish is one of the largest volumes of fish traded each day in almost all public markets in the Philippines. About a fifth of the 25 kilograms of fresh fish consumed by Filipinos each year is bangus – or 4 kilograms of milkfish per person per year, according to the Food and Nutrition Research Institute. That is, if it reaches the table.

A 4,500 metric ton deficit may even be true, based on the 88.5 million population in 2007 and a per capita milkfish consumption of 4 kg a year, says Dr Nerissa D. Salayo, an Associate Scientist and Leader of the Meeting Social and Economic Challenges in Aquaculture Programme, Socioeconomic Section, Research Division, of the Southeast Asian Fisheries Development Center, reported in the Malaya Business Insight.

Indicative supply and demand gap estimates show a slight overall deficit due to the increasing size of the consumer base, she explains.

The increasing volumes of milkfish over the years due to improved technologies alone do not guarantee food for the masses.

“Crucial too is marketing to expand access to and availability of milkfish in fish-deficit regions, like Bicol where poverty and malnutrition are widespread,” says Dr Salayo. “Even capital-rich Metro Manila where the supply deficit against demand was estimated in 2007 at 44,426 metric tons.”

Markets play a crucial role in the movement of milkfish because consumers and producers are often far apart. Wholesale and retail prices thus motivate the flow of milkfish while price margins compensate for the cost of moving it around the archipelago.

The major consumers are in Metro Manila, Cebu and Davao where one of four Filipinos lives.

Overall, the surplus is in Pangasinan and Pampanga, Iloilo, Capiz and Negros Occidental (all in Western Visayas), Zamboanga and South Cotabato. Pangasinan, Iloilo, Capiz, Bulacan, Pampanga and some other key producers remain suppliers.

There have been changes in rankings over the years. Bulacan used to be the top producer until it was overtaken by Pangasinan in 2007. By that time, fishpond productivity was declining in Bulacan while milkfish culture in pens and marine cages was increasing in Pangasinan.

While milkfish consumption is high all over Luzon, Panay and Negros islands, it’s not in Cebu, Samar, Leyte and Mindanao where bangus is scarce or expensive while coastal fishes are abundant and preferred.

“Price and income elasticities influence consumption,” says Dr Salayo. “This is the response of consumption to changes in fish prices and income. The poor buys bangus when they have the extra money.”

Compared with other farm products, the market channel for milkfish is a short distribution chain. It is either auctioned in bulk on-farm site or transported to major fish ports for auction. Middlemen and exporters also often bid at on-farm sites; bidding are made by middlemen and exporters. While bidding in fish ports are made by middlemen, fish vendors from local wet markets and small fish processors.

Some corporate aquaculture farms have their own processing facilities and most of their produce directly goes to processing plants.

Today’s marketing channel for fresh milkfish for local consumers has not changed much since the 1970s. The short marketing distribution system is linked to the perishable nature of fishery product that requires urgent distributiondisposal to secure freshness and ensure safe consumption.

Milkfish producers typically sell their harvest to a consignacion, or the broker, to whom about 80 per cent of the harvest is sold. The broker makes a 5 percent margin, including the profit and marketing costs.

The broker or the buying agent either picks up the fish in the farm or get it in fish unloading and trading centers. In turn, the broker sells to a wholesaler with a 10-per cent price margin.

The wholesaler distributes the milkfish to a viajero or trader who transports the milkfish to various wet markets. The wholesaler may also so this distribution job.

The viajero then sells to the retailers who occupy stalls in the wet markets. Both the wholesaler and the viajerogets a 15-per cent price margin.

Brokers, traders, wholesalers and retailers trade with each other, a practice that persists although it has been criticised as adding cost but not value.

Since the early 1970s, marketing channels have not changed significantly, says Dr Salayo. Nowadays, supermarkets in mallssell milkfish. They are categorised as retailers that buy direct from producers, brokers or wholesalers, or sub-contract to retailers to sell fish within the supermarket.

“The role of these traders in the market chain has not changed through the years,” she says.

June 2012

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