The domestic freshwater fish market in Thailand is complex and comprises many types of markets and involves a large number of parties. Fish, as a commodity, is sold fresh as well as processed. Fresh fish is sold both live and dead. Walking catfish, snakehead fish and sand goby are usually sold live[38]. Live fish are transported by trucks (pick-ups, six- and ten-wheelers) and are kept in water-filled metal boxes. Poor transportation may cause fish to die and reduces their price by as much as 40-50%. The same mode of transportation is used for other species of dead fish. Many kinds of traders are involved when freshwater fish are moved from fish farmers to consumers.
5.1 Market-structure
The market for cultured freshwater fish can be classified into three kinds: primary market, intermediate market and terminal market.
5.1.1 Primary market
Marketing fish starts with the primary market. Fish are collected and sold at the farm-gate and redistributed to other markets. However, fish farmers may choose to sell their own fish, if transportation can be arranged easily and if they stand to realize higher prices after deducting marketing costs such as charges for transportation, labour, etc.
5.1.2 Intermediate market
Fish are transported to the intermediate market, where they are redirected or re-consigned to the terminal market. In Thailand, this market level comprises two types of markets: central assembly markets and wholesale markets.
5.1.2.1 Central assembly market
The central assembly market can be divided into state assembly markets and private assembly markets.
The Fish Marketing Organization (FMO)[39], located in central Bangkok, manages state assembly markets, which handle both marine and freshwater fishes. Fish are sold through registered fish agents[40]. Presently, 14 marine fish agents and two freshwater fish agents operate on this level of the market. Mostly, fish is bought and sold at auctions. However, the auction system is gradually being replaced by price negotiations. Fish are transported to markets primarily by pick-ups, which can carry about 1-2 t of fish. Fish farmers from the central plain and the east sell 90% of the fish brought to the market themselves. The rest of the fish arrives through fish collectors and fish agents, who buy fish directly from farmers and then transport them to the market. Freshwater fish-agents start selling live fish as early as 2.00 am. Agents dealing in marine fish start vending their products at 9.00 am. Marine fish agents trading dead fish start operations at 11.30 am. Cultured freshwater fish that entered this market in 1998 amounted to 47 010 t, and the trend increased during 1984-1998 (Table 16).
Private assembly markets are run by individuals who normally own land in suitable locations. Few private assembly-markets existed in or nearby Bangkok in the past. In these markets, fish traders act as non-registered fish agents. They normally have close relationships with fish farmers as they may extend credit or supply necessary inputs. To date, private assembly-markets have developed significantly to serve increases in supply of and demand for freshwater fish.
There are several new assembly-markets (Figure 1), one of which is Ang-thong. This market is situated in Amphur Muang, in Ang-thong Province, 105 km north of Bangkok. The market started operations in 1994 and business is confined only to freshwater fish. Initially, Ang-thong was divided into two sites that faced each other: One for trading fish from sellers' pick-ups, the other site functioned as a buyers' parking lot. With expanding business, both sites are now reserved for sellers; buyers may park along public roads. The market is an open, concrete area, which is divided into small lots (over 80 lots in both sites) for parking pick-ups that carry fish. Parking fee amounts to 50 Baht per lot. Bigger trucks are charged 100 Baht per lot. There are no fish agents at Ang-thong. Fish are sold directly by those who bring them to the market. Over 90% of the people involved are fish collectors, the rest are fish farmers. After negotiating a price, fish are sorted and transferred from the pick-up to a plastic basket and then carried to the buyer's vehicle by labourers assisting in the market. Buyers pay labourers 10 Baht per trip. Sellers may choose to sort fish themselves, or hire other help at 1 Baht per kg. Fish-selling starts at 3.30 p.m. Estimated volume of fish sold in this market is as high as 60 000-70 000 t a year.
Figure 1: Production by region and main assembly markets
Another new assembly market is Bang-lane. This market is situated in Amphur Bang-lane, in Nakhonpathom province, 56 km west of Bangkok. It started operations a few years ago with 12 registered fish agents selling fish on behalf of fish farmers. Business is confined only to freshwater fish. The success of the market is reflected in the increased numbers of fish agents, about 25 at present. Fish farmers supply 90% of the fish in the market, while fish agents bring in the rest. Fish is transferred from fish farmers' vehicles to the concrete area, which is separated into lots. Each individual fish agent is responsible for his own lot, for which he pays 1 200 Baht rent per month (size of the lot is 4 × 4 m). Fish farmers pay 1-3 Baht per kg as a commission fee for sorting and selling services. The market starts at 6 am. An estimated 50 000-60 000 t of freshwater fish enter this market every year.
Additional new private assembly-markets include the Thai market and Mae-klong market. The Thai market is situated in Patumthanee Province, 46 km north of Bangkok. It opened in May 1999, serves a large area, and is known as the central market for all agricultural and miscellaneous products. It used to be only a small wholesale fish market where the wholesalers would meet retailers and consumers. Expansion of both supply of and demand for freshwater fish has created opportunities to expand the assembly market beyond the wholesale market. The Thai market starts at 5.00 am.
Mae-klong assembly-market is located in Samut-songkram Province, 72 km west of Bangkok. Opened in 1998, this market is managed by a fisheries cooperative, which, in the past, sold only marine fish. Volumes are not big and the market starts at 6 am.
5.1.2.2 Wholesale market
Wholesale markets are mostly located in big cities and in good locations. Many of them incorporated a retail, final consumer market. Usually, wholesale markets include other consumer products, and selling fish is one of many activities in this market. Here, fish are transported from fish farms or from assembly-markets to the wholesale market by wholesalers and distributed to retailers very early in the morning. However, in some markets, fish may be sold in the afternoon. Many wholesale markets have been in existence for a long time, and thus, wholesalers have very good relationships with retailers. Retailers confine their business permanently to dealing with selected wholesalers. Rarely will a retailer buy fish from any wholesaler who may be selling fish in the wholesale market.
5.1.3 Terminal market
The terminal market is the final consumer market. Fish is distributed to consumers through retail outlets, including retail markets, supermarkets, restaurants and hotels.
Retail markets are scattered in urban and peri urban areas to which consumers have easy access. These are not speciality markets selling only fish; instead all kinds of food items are for sale. Normally, a number of retail-stalls with no separating walls give the market the appearance of a traditional open hall with one big roof above a concrete floor. Retailers pay rent and other expenses, usually electricity and clean water. Fish are placed on slabs, but live fish are displayed in crates.
Big retail markets often incorporate wholesale markets as well. All kinds of freshwater fish are found, live, dead, whole fish or pieces of fish, processed, i.e. salted and dried, minced fish, fish balls, fermented fish, etc. Usually, retailers post prices on the board above their stalls. Markets are open every day. To date, 16 big retail/wholesale markets exist in Greater Bangkok.
Customers rarely find processed fish in small retail markets, and the choice of species is limited. Fish price are not communicated openly. Owners of some local retail markets display fish in public areas, but the vendors are not present on a daily basis.
Nowadays, it is common to find freshwater fish in supermarkets, which are emerging throughout Greater Bangkok. Freshwater fish is packed in small portions on foam trays wrapped with plastic foil. The packing date and expiration date are specified, as is the retail price. Fish may be sold whole, gutted, or in pieces. A variety of processed fish is sold in small portions. Open freezers are used for storage and display. On average, prices in supermarkets are about 40-50% higher than in traditional retail markets. Hotels and restaurants increasingly offer cooked freshwater fish, but the choice of species is limited.
Another retail outlet that is developing rapidly is the shed built in front of the fish processors' houses along main roads from Bangkok to other provinces. Freshwater fish sold from these locations are earmarked to serve travellers and consist mostly of salted and dried fish.
Franchises are becoming increasingly popular. Fish is promoted as fast food and delivery becomes another service that changes consumers' habits from eating out to staying at home, particularly in a big city like Bangkok.
5.2 Participants
Various fish traders are involved in marketing and trading fish.
5.2.1 Fish farmers
Fish farmers participate in both primary and intermediate markets. Farmers, who have high catch volumes, prefer to bring their catches to assembly-markets, where most of them are regular customers of the specific fish agents. This practice, however, is confined especially to culture-areas located in the vicinity of assembly-markets. In areas far from these markets, fish farmers may bring their fish to local retailers to sell or to retailers in other provinces nearby. Fish farmers may also function as fish collectors and fish agents. In Samutprakarn province, situated in the east of Bangkok, where sepat siam is the main species raised, fish farmers are also engaged in processing this fish, which is not commonly marketed fresh.
5.2.2 Fish collectors and fish assemblers
Fish collectors supply fish assembly-markets with fish. They may be liaison intermediaries between fish farmers and fish agents, or they themselves may sell fish in assembly-markets. Before gathering fish from several farms, they contact fish farmers who are ready to harvest, in advance. Prices are negotiated based on species and size. On some farms, sizes of certain species may vary and thus, price is based on the current average price. In such a case, fish collectors benefit from price differentiations after fish are graded by size in the assembly-market. It is common practice for fish collectors to buy species of fish they specialize in, particularly agents who trade in live fish, such as snakehead and walking catfish. These fish must be handled properly to command an appropriate price.
5.2.3 Fish agents
Fish agents conduct business in assembly-markets and are divided into FMO fish agents and private fish agents. The fish agents' function is to sell fish on behalf of fish farmers and collectors. Unlike fish collectors, fish agents do not own the fish they sell. Their earnings are derived from commission fees. According to the Royal Decree on fish agents, commission fees charged at FMO assembly-markets by fish agents must not exceed 6% of gross sale value. At private assembly markets in Banglane, fish agents deduct 1 Baht/kg of fish for all species of fish sold, except for snakehead, for which they charge 2-3 Baht/kg. Fish agents must have good relationships with sellers and buyers in the assembly-market if they want to perform their business successfully. It is common for fish agents to grant fish farmers/collectors short-term cash credit without charging interest.
5.2.4 Fish wholesalers
Fish wholesalers usually procure fish from the assembly markets or buy directly from fish farmers. Volume of business varies from one wholesaler to another. Fish wholesalers can be divided into a) first wholesalers and b) second wholesalers. Since first wholesalers distribute fish to second wholesalers in other provinces, to retailers, processors, and bulk consumers, the volume of fish traded may be very high. For example, a first wholesalers from the east may deliver various freshwater fish species in many ten-wheel-trucks to the northern part of the country, stopping off at wholesale markets (mostly in big cities) along the way. The second wholesaler buys fish only from the first wholesaler and sells directly to retailers.
5.2.5 Fish processors
Fish processors are becoming increasingly important, as demand for processed fish increases. Traditionally, processed freshwater fishes, supplied in simple, various forms, have added to consumers' choice of products. Fish processors procure fresh fish from several sources. They may buy directly from fish farmers, assembly markets and wholesalers, and also from other processors. For example, to process fish into minced/ground fish, processors can buy fish fillet from other processors, who are engaged in filleting. Normally, small processors sell their products directly to consumers. In many provinces, processed fish, mostly in dried and salted form, are sold along highways to serve domestic travellers. Processors, who carry large volumes of fish, usually sell their products the wholesale market for processed fish in Bangkok, and to retailers. Sometimes, processed fish, i.e. fish balls and minced fish, is re-sold in assembly-markets.
In addition to processors who handle traditional products, several other processors operate cold storage facilities, which they either own or rent, for the purpose of exporting frozen fish. Fish-processors may be commissioned by a broker to process fish on demand, or they may export fish on their own. These kinds of processors tend to trade large volumes and buy fish directly from fish farmers and assembly markets. Two of them are freshwater fish agents in the FMO assembly market.
5.3 Marketing channels
Figure 2 illustrates marketing channels and shows trading routes for cultured freshwater fish. Product volumes traded by different kinds of traders are approximated, based on observations during field-visits to fish farms, main assembly markets, wholesale markets and retail markets, including personal interviews (some with formal questionnaires) of traders, who participated in the freshwater fish markets. The Department of Fisheries' 'Annual statistics of freshwater fish production' is also considered in this calculation.
(i) Fish farmers distribute fish to all kinds of traders. Most of the fish, about 35% of total production, are sold to fish collectors. Most small-scale fish farmers rely on fish collectors who are experienced at selling fish and who have more information about fish-market outlets. It may also not be worthwhile for small-volume fish farmers to transport small quantities of fish to market themselves. Fish that is not sold to collectors - about 23.5% of fish farmers' output - is sold in private assembly-markets through private fish agents, except in Ang-thong assembly market, where farmers sell their own fish. Wholesalers, processors, operators of cold-storage facilities and retailers receive quantities of fish amounting to 15.4%, 6.8% and 3.5% of total quantity, respectively.(ii) After buying fish at farms, fish collectors will transport their products to assembly-markets to sell. Out of 35% (see a) of total fish production, 1.8% of fish are sold through fish agents in FMO markets and 33.2% are sold in private assembly markets, 21.1% are sold by fish farmers themselves, and 12.1% of fish are sold through private fish agents. Therefore, freshwater fish traded in assembly-markets accounted for about 74.3% of total production.
(iii) Fish agents, both FMO agents and private agents, as well as fish collectors in assembly markets, distribute most of the fish to wholesalers (43.9% of total volume), then to retailers, fish processors/cold-storage operators, accounting for 16.1% and 14.3% of total volume, respectively.
(iv) Wholesalers distribute most fish directly to retailers (about 54.7% of total fish volume), while 3.9% of fish are sold to processors/cold storage operators and 0.7% is exported. Fish exported by wholesalers are mostly catfish (Pangasius sutchi), which are sold to neighbouring countries, for example, Burma.
(v) Processors/cold storage operators have another route for distributing processed fish. Wholesalers buy 13.4% of total fish production, whereas 5.7% of fish are sold directly to retailers[41] and 5.9% is exported. Most exported fish are chilled and frozen. Volumes of many species marked for export have been fluctuating in recent years. Walking catfish and snakehead fish are exported to the United States, Japan and Europe. Thai silver barb, tilapia, rohu, mrigal etc. are mostly exported to the Near East. Catfish (Pangasius) is sold primarily to Europe and Asia.
(vi) Retailers are the last link in chain before the fish reach consumers. When we follow marketing channels and look at percentage rates of freshwater fish distributed, it is obvious that 93.4% of total production of cultured freshwater fish are consumed domestically, of which 74.3% are bought fresh/live, and 19.1% are purchased in several processed forms.
(vii) Export accounted for 6.6% of total freshwater fish production, mostly in chilled/frozen form.
The marketing channel in rural areas reveals that small-scale wholesalers and retailers buy fish directly from fish farms nearby. Species of fish traded in rural areas are low-priced species in small sizes, which consumers can afford.
5.4 Access to credit
Traders require capital and the amounts needed depend on the type of their business. The Government does not provide special financial assistance due to the fact that the trade is left in the hands of the private sector. Fish agents, who deal in large quantities of fish and fishery products, may need large amounts of ready cash. Since agents must focus on establishing relationships both with suppliers and buyers for continued business, they may offer interest-free credit and loans to fish farmers or fish suppliers and may sell fish on credit. Large-scale processors/cold storage operators and most fish agents are company-oriented and may have access to institutional sources of credit without encountering any difficulties. Other fish traders may conduct business on their own. Today, most fish collectors and wholesalers operate on a cash basis and may even be self-financed, especially when they are selling products rather than buying them. Retailers, on the other hand, may not need credit as they deal in small volumes and sell directly to consumers, who pay them cash.
5.5 Marketing margins
The marketing margin is the difference between the price paid by the consumer and the price received by the producer. Therefore, the margin in this study is the difference between retail prices and farm-gate prices. Marketing channels indicate that many traders are involved in moving fish from farms to final consumers. Hence, marketing margin occur each time fish passes from one hand to another. Prices vary among species at the producers' level, from one fish trader to another, and from one market to the next at the retail level. Normally, prices can be cost-oriented, demand-oriented or competition-oriented. Other factors influencing prices are quality, size and freshness of the fish. To simplify the process of setting prices and to gain some idea about the relative scale of traders involved at each level, we selected one marketing route from the field survey and field observations. Marketing margins are considered in two parts: marketing costs and marketing profits.
The selected marketing channel starts with the fish collector, who buys selected freshwater species (Nile tilapia, silver barb, walking catfish, snakehead and catfish) from fish farmers in the central plain and sells his fish in a private assembly-market (Ang-thong, 105 km north of Bangkok). The wholesaler buys fish in an assembly-market and delivers them to retailers in a wholesale/retail market (at Sapanmai market, in Patumthanee province, which is located about 70 km from the assembly-market and 35 km from Bangkok). The marketing margin is illustrated in Table 17 and Figure 3, and is summarized as follows:
The model in this study indicates that retailers earn the highest profit margins among all traders. Their marketing costs are also relatively high. Cost for labour is the main component of their expenses, since fish is cleaned, gutted, chopped, etc. at this level. Percentage of costs incurred also depends on the quantity of fish that traders handle. The high profit margin may be diminished if fish have to be kept and sold the next day, which is normal practice that reduces the asking price for the fish by at least 1-2 Baht/kg.(i) Considering a fish farmer's share as percentage of the retail price, a fish farmer of snakeheads received 75%, which was the highest amount for all selected species. The marketing margin was 25% of the retail price, of which 5.4% accounted for marketing cost, and the remaining 19.6% constituted the trader's profit margin. Of total profit margin, retailers received the highest share of 9.9%. Fish collectors and fish wholesalers obtained 5.2% and 4.5% of the retail price, respectively.
(ii) The fish farmers' share of the total profit margin for tilapia was 59.9%, the marketing margin was 40.1% of the retail price, of which 15.7% was spent on marketing costs; the remaining 24.4% reflect traders' profit margins. Of the total profit margin, retailers received the highest share amounting to 9.7%. Fish collectors and fish wholesalers received 5.4% and 9.3% of the retail price, respectively.
(iii) Marketing margins for the remaining three species, silver barb, walking catfish and striped catfish as percentages of retail price are the same for all three, amounting to 48.6%, and hence, the fish farmers' share was 51.4% of total profit margin. Total marketing cost and profit margin accounted for about 13% and 35% of retail price, respectively. Retailers' profit, collectors' profit and wholesalers' profit were about 14%, 11-13% and 7-10%, of the retail price, respectively.
Figure 2: Marketing channels of cultured freshwater fish in Thailand (from survey, 1999)
Figure 3: Illustration of percentages of marketing margins by species
5.6 Obstacles to market access
Distribution and marketing of freshwater fish in Thailand has been marked by dramatic changes in recent years. The most outstanding feature is the advent of several new assembly markets located in areas where fish farms are concentrated. The assembly market is the supportive mechanism in developing a market, since distances between supply sources (central, west and east) and points of delivery are great, and a large quantity of fish must be moved regularly to major markets in the north and the northeast. Assembly markets are advantageous for bulk deliveries of fish, enabling farmers to minimize marketing costs. Generally, existing markets (FMO, Ang-thong and Banglane) are firmly established with marketing facilities provided at all levels. A large number of sellers and buyers participate in these markets, and pricing is highly competitive.
Most of the traders involved at wholesale and retail market levels function as a link between sellers and buyers so that buyers can be assured of regular supply of fish and sellers can conduct business with minimal risk. Nevertheless, quite a number of retailers operate small businesses independently. They buy from whoever at their convenience to secure a desired price.
At present, no collusion seems to exist among various groups of traders to influence the market. Some traders may perform many functions; they may be fish agents as well as wholesalers and exporters of fish. Some large-scale fish farmers expand their businesses to cover marketing costs. Whether these practices will adversely impact small-scale fish farmers and small traders in the future remains to be seen, but it is an issue that the government should pay attention to and monitor closely.
Generally speaking, no apparent obstacles exist limiting access to markets. However, some types of traders, who handle large volumes of fish, require connections and financial support in the form of credit to conduct their businesses successfully. The goal of the survey on fish traders at all levels of the market was to assess their problems[42]. About 21% of traders were satisfied with current circumstances, others specified the following problems:
Moreover, fish traders need the government to help:
