Fish Marketing in Cambodia

Summary

With an inland catch of more than 400,000 tonnes per year and high domestic rates of fish consumption, freshwater fish are one of Cambodia’s most important traded commodities. Fresh and processed fish are traded widely within Cambodia, with the majority of trade originating at the Tonle Sap (Great Lake). Fish marketing involves a number of steps and challenges including storage, handling, aggregating enough for a shipment, transportation, negotiating sales, and maintaining quality. Marketing inefficiencies raise costs, which can negatively affect the income of fish marketers as well as fishers and others working in the sector.

To assess current conditions under which freshwater fish are marketed, this study examines fish trade from two major landing sites at the Great Lake to retail markets in Phnom Penh – the largest domestic fish trade route. Findings are based on nearly 60 semi-structured interviews conducted with fishers, traders, distributors, a distribution centre owner, retailers, and government officials. In addition, two “follow the fish” trips were made with shipments from the landing site to the distribution centre in order to directly observe trade conditions and crosscheck information gathered in interviews.

Marketing fish from the Great Lake to Phnom Penh involves three main transactions – sales from fishers to traders, from traders to retailers via distributors, and from retailers to customers. Distributors play a dominant role in the market structure as the financiers of fish trade. They lend capital to traders to support fish purchases and trading activities, and traders re-lend some of this capital to fishers for gear purchases and other expenses. Under the terms of these loans, fishers must sell all fish to their trader (creditor), and traders must sell all fish through their distributor (creditor) and pay associated “commission fees” – usually about 6-8 percent of total sales revenue. These tied relations are common for trade from the Great Lake to Phnom Penh, with most fishers in debt to a trader, and most traders in debt to a distributor.

The current market structure supports a stable fish supply for trade, but the problem of credit dependency places fishers and (to a lesser extent) traders at a disadvantage. Fishers are clearly in a weak position for negotiating the sale of their catch. They must sell to the trader to whom they are in debt. Another problem is the lack of transparent financing costs. Because any interest charged on loans is either embedded in the (discounted) price offered to fishers for fish, or part of the “commission fee” that traders pay to distributors on all sales, the true cost of financing remains unclear. It is likely that lenders (distributors and traders) take advantage of this lack of transparency to increase returns on their loans.

Fish trade is affected by a number of other constraints as well. Traders and distributors criticise distribution centre fees as too high given the lack of services. But with only one centre serving Phnom Penh for each major trade route, they have no (legal) alternative place at which to conduct transactions. Some traders also complain about the fees they must pay along the trade route. Spoilage and weight loss represent a substantial cost at 10-15 percent of shipment weight (or about $55 per tonne). These value losses are compounded by the retail marketing practice of displaying fish for sale without ice. Retailers remove ice because it is the common perception of customers that the presence of ice indicates a lack of fish freshness. In total, these constraints result in marketing costs that average about $308 per tonne from the Great Lake to retail markets in Phnom Penh. As a result, marketing margins account for roughly 65-75 percent of fish retail prices; fishers receive 25-35 percent.

To improve the livelihoods of fishers through increased returns on their catch, steps need to be taken to reduce marketing costs and inefficiencies. To this end, the following policy recommendations are offered for consideration.

1) Inject competition into fish distribution services by granting additional licenses for distribution centres.

2) Campaign to change consumer perceptions about ice use and the freshness of freshwater fish at retail markets.

3) Conduct further technical research on spoilage problems in the marketing of fish from fishing grounds to distribution centres.

4) Determine the legality of current fee charges along domestic fish trade routes and eliminate fees that have no clear legal basis.

5) Carry out additional research on the role of the informal financing/credit system in the fisheries sector