5.3 Marketing and Exporting of Groupers in Thailand by kellena94


									5.3 Marketing and Exporting of Groupers in
Pongpat Boonchuwong and Amporn Lawapong

Fisheries Economics Division, Department of Fisheries,
Bangkok 10900, Thailand


This paper describes the marketing and export of groupers in Thailand, which
also provide information on traders and marketing channels that have been used
in Thailand. It also covered the economic aspects of the cage culture of grouper
in Thailand in various locations.

Grouper culture in Thailand has existed for over 20 years. The two sources are from
the wild (92%) and cultured groupers (8%). In 1996, total production of cultured
groupers was 774 tonnes; cage cultured groupers constituted 93% and pond cultured
groupers 7%. Groupers are cultured on the Andaman coast, the eastern coast and the
western coast of the Gulf of Thailand. The production of cage culture from these areas
(723 tons) account for 73%, 25.4% and 1.6% respectively (Table 1). During the last
five years, production volume of cultured groupers varied due to shortage of fries and
environmental problems such as the quality of water on the sea coast.

Economics of Grouper in Cage Culture
According to a survey of grouper cage farmers on the Andaman coast (1997-1998),
the average size of a grouper farm was four cages. The farmers had from seven to
fifteen years of experience. The fries were collected and released into cages from May
to August (Table 2). The culture period was from two to nine months depending on the
size of the fry. The average output was 210 kilograms per cage or 175 fishes per cage.
The fish size was from 1 to 1.2 kilograms. The average cost was 31,245 baht per cage
or 149 baht per kilogram or 179 baht per fish. Feed costs accounted for 57% of the
total production costs, fry costs accounted for 24%, and capital, depreciation, mainte-
nance and other costs accounted for 19% of total cost (Table 4).

Most farmers started to harvest in the ninth month and continued up to the twelfth
month of the culturing period. The number of harvests was three to four. The average
revenue was 61,251 baht per cage or 292 baht per kilogram or 350 baht per fish. The
average net profit was 30,006 baht per cage or 143 baht per kilogram or 172 baht per
Table 1: Production of cage culture gouper in Thailand, 1992-1996

Table 2: Period of grouper culture (Andaman Coast, 1997-1998)

Source: Survey, * High price

fish. The rate of return on investment was 96%, which was higher compared to that
from other aquatic animal cultures (Table 5).

Marketing and Export of Cultured Grouper
Approximately 85% of cage cultured groupers are exported live. Many traders are
involved because the output must be distributed quickly.
Table 3: Characteristics & production for grouper farms (Andaman Sea Coast 97-98

Table 4: Production costs of grouper culture (Andaman Coast, 1997-98)

Source: Survey

Traders and Marketing Channels
The major agencies involved in the marketing system are brokers, collectors (whole-
salers) and exporters. The marketing channel details are presented in Figure 1. The
marketing process can be divided into local and exporting levels.

People involved at local levels are brokers and collectors. Most of them are the main
grouper farmers in the area. Brokers and collectors have different roles. Brokers are
responsible for monitoring the grouper prices, informing the farmers, contacting the
collectors or wholesalers, charging broker’s fees from the buyers and serving as a
guarantor for payments made by buyers. Brokers charge buyers a fee of 5 to10 baht
per fish. The collectors are either from the area or from nearby areas. They are respon-
Table 5: Revenue and profit of grouper farms (Andaman Coast, 1997/1998)

sible for collecting fish from small-scale farms. They collect until the minimum target
number per trip is achieved. The number should be about 130 to 250 fish per trip to
bring the transportation costs to an acceptable level. Every collector has regular cus-
tomers. Payment is made on the day following the day of the purchase. The average
marketing costs of collectors is 26.5 baht per kilogram or 31.8 baht per fish and the
average net profit is 13 baht per kilogram (Table 6).

There are approximately 20 exporters of live groupers. Most are exporters of several
kinds of live aquatic animals such as frogs, eels, prawns and soft-shell turtles. The
major markets for export are China and Hong Kong SAR. Live groupers have been
exported for more than fifteen years. Some exporters are agencies or networked with
foreign importers, such as Hong Kong SAR and China. As a result of high demand in
foreign markets, the grouper market is very competitive. Groupers are transported by
plane. Live groupers are put in low temperature water with ice to lower their metabolic
rate during transportation. Then they are packed into plastic bags with 5 to 6 fish per
bag with one-third water and filled up with oxygen. The bags are packed into foam
boxes with a gross weight of 12.5 to 13.0 kilograms. The average marketing costs for
exporters is 100 baht per kilogram or 120 baht per fish and the average profit is 94.3
baht per kilogram (Table 6).

Profit Margin
The exporters profit margin is higher than that of the collectors, even though marketing
costs for the exporters are higher. The exporters rate of return on investment is as high
as 94.4%, whereas the collectors’ rate of return is 49.2%. Exporters get a higher return
because they have access to foreign market information.

Farmers get 55.5% of the price foreign importers have to pay. The rest (44.5%) is the
trader’s share, of which the exporters take 37% and collectors 7.5% (Table7). Ex-
porters bear higher risk than the collectors. The risk is potential death of fish during the
export process. Exporters take this risk into account in calculating profit margins and if
losses are lower than expected, the exporters earn a higher profit margin.
Table 6: Marketing costs & profits for live grouper collector and exporter (1997-98)

Table 7: Profit Margin of live grouper marketing system (1997-98)

Grouper culture generates higher profits than the culture of most other aquatic animals.
Foreign market demand for groupers is highest from November to February, but grou-
per production does not increase during this period due to the shortage of fry. This
constraint makes it difficult to plan for and produce grouper on demand.

Moreover, increasing feed prices and seasonal shortages, increase the culturers’ costs.
As loans from financial institutions are not available for grouper cage culture, most
culturers use their own money or borrow from neighbours at high interest rates.

Periodic shortages of grouper production increase costs for exporters. Exporters have
to gather groupers and keep them in storage ponds until the ordered number is col-
lected. Alternatively, exporters have to buy other aquatic animals in substitution for
grouper to transport to foreign markets.

One solution is to improve hatchery techniques and switch to an artificial diet. Another
way is to improve pond grouper culture techniques. Currently, unused prawn culture
ponds are used for grouper culture. However, price of pond cultured grouper is lower
than that of cage cultured grouper because lower flesh quality. If the culture technique is
improved and the quality of fish meat is improved, pond grouper culture will become
another way to increase grouper production.

Lawapong, A .1986. Grouper Marketing in the South of Thailand. Fishery Policy and Planning
     Division, Department of Fisheries. (in Thai).

Lawapong, A .1986. Costs and Earnings of Grouper Cage Culture in Phangnga. Fishery Policy
     and Planning Division, Department of Fisheries. (in Thai).

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