New Job 1st of September

Dear all,

As most of you know I have decided to change jobs and to join Solidaridad (www.solidaridad.nl) the 1st of September. My three years with LEI Wageningen UR have been a great experience in which I had the opportunity to work with a very close group of colleagues and deepened my knowledge and understanding of the structure and dynamics in the global seafood industry. However, I realize that it is time for a new adventure and Solidaridad offered me the opportunity to join their ambitious aquaculture team. At Solidaridad I will contribute to the realization of their ambitions to increase the sustainability of the global aquaculture industry and to improve the livelihoods of those employed in the sector.

My job consists of three main components:

1. Business development for the Solidaridad Aquaculture Program. Together with the aquaculture team I will be co-responsible for the further development of the aquaculture farmer support program in South East Asia and potentially also Africa and South America. In this context I will continue my work in Myanmar.

2. Business development for the Seafood Trade Intelligence Portal. Together with Daniel Knoop I will work on the start-up of the Seafood Trade Intelligence Portal. An online trade platform with a buyer and a supplier database and sourcing and market intelligence. As many of you know we have already piloted the concept in Bangladesh and Myanmar and now it is time to scale up activities. The Seafood Trade Intelligence Portal will be a private company.

3. Consultancy. From the Seafood Trade Intelligence Portal I will spend part of my time on consultancy assignments. The assignments will built on my specific experience in aquaculture and fisheries supply chains in Asia, Africa and South America and my knowledge of seafood markets in Europe, North America and Japan.

Bas Bolman will take my position at LEI Wageningen UR and will ensure the continuity of LEI’s activities in the aquaculture sector. Bas previously worked at IMARES Wageningen UR and will join LEI the 1st of November. Please feel free to get in touch with Bas if you like to meet or get in touch (bas.bolman@wur.nl). Until Bas starts at LEI the 1st of November, Wouter Leen Hijweege can be contacted in case any questions arise (wouter.hijweege@wur.nl).

I would like to thank you all for working together in the previous years. It was my pleasure. I am sure that from my new position with Solidaridad and my new activities in the Seafood Trade Intelligence Portal there will be new opportunities to work together. My new email address is willem.vanderpijl@solidaridad.nl it will be in use from the 1st of September. My phone number is +31 6 10642177. After the 1st of September I will not reply to emails send to willem.vanderpijl@wur.nl.

All the best, Warm regards,

Willem van der Pijl

Improving the marketing of Bangladeshi shrimp in the international market

Shrimp farming in Bangladesh consists for more than 95% out of small scale extensive farms that produce volumes of around 250 kg of shrimp per crop. Shrimp ponds are relatively large and consist mainly of converted rice fields that are locally referred to as ghers. The productivity is much lower than in surrounding countries, mainly due to high mortality rates caused by white spot disease, weak quality PL’s, a lack of biosecurity and water quality control. However, production is close to organic. Farmers do not use commercial feeds and rarely use medicines or chemcals to prevent disease and control the water quality. The result at the farm is a beautiful product. A good taste, good smell, strong structure and potentially large size shrimps that are high in demand in high end niche markets around the world. However, the quality of the product is deteriorated as a result of post harvest loses and malpractices between the farm gate and the moment the shrimp is packed as finished product in the container. As a result of these malpractices Bangladesh is internationally not known for the quality of its products but for the cheap price it can offer as a result of its export tax of 10% and the duty free status in the EU market.  This is a missed opportunity because the shrimp produced in Bangladesh could be marketed as a high quality niche product for niche markets around the world. Hopefully this situation will change during the coming years as several international organizations like Solidaridad, Worldfish, Unido and FAO are all working together with the seafood exporters association (BFFEA) and the Department of Fisheries (DoF) to improve the situation in the domestic supply chain.

Processors and exporters in Bangladesh complain that their only issue is that there is a lack of raw material supply. Farms should become more productive and an increased supply of raw  material would strengthen the power of processors in the supply chain wiping out all malpractises that currently deteriorite the quality of the products. These malpractices mainly consist of pushing (inserting water to the shrimp in order to increase the weight) and other methods to manipulate the weight increasing the profit margins for various intermediaries but decreasing the profit margins for exporters and processors. In addition, if customers buy shrimp that is pushed their reputation will be in danger and this in turn impacts the image of the Bangladeshi sector as a whole. Although it is likely true that processors can become more selective in the products they purchase when there is more supply, it is not likely that an increased supply alone will solve all the issues Bangladesh is confronted with.

Niche markets for large size Black Tiger shrimp often have very strict demands on sustainability and food safety aspects. These aspects include e.g. traceability and strict control of hygienic conditions all along the supply chain. In the current supply chain model in Bangladesh both aspects are not controlled. Traceability is often limited to the middleman that is supplying the shrimp to the processor and hygienic conditions are not controlled as many middleman have no incentive to do so. The easiest way to better manage both aspects is to shorten the supply chain by linking farmers or farmer groups directly to exporters which provide farmers with necessary inputs which are otherwise provided by middleman. One example is the provision of ice to farmers. If farmers can put their harvest directly at ice this can greatly reduce post harvest loses and improve the quality of the products. Shorter supply chains do not only improve the quality and quantity of the products but also help exporters that are willing to move outside their factory boundaries to ensure supply of raw material. This is a main incentive for exporters that are now considering to actually engage in direct relationships with farmer groups that are supported by international organizations to improve their yields and farming practices. These initiatives undertaken by a partnership between BFFEA, Solidaridad and Worldfish can be a real breakthrough in improving the market position of Bangladeshi shrimp in the international market.    

In addition to improving the situation in the supply chain and increasing production a big opportunity for Bangladesh would be to market the shrimp from it’s country as a premium product compared to Vannamei and Monodon produced in more intensive production systems. Marketing efforts dont have to be huge but should consist of branding the origin of the products (extensive production systems) and repairing the image of the Bangladeshi export companies. This should start with generating a flow of fact based information and improving the visual representation of Bangladeshi shrimp exporters on international trade shows like e.g. in Brussels or Boston. My organization together with Solidaridad and hopefully some other donors are ready to support the BFFEA and the Bangladeshi exporters in this aspect starting now.

Although at this moment, the exporters do not experience so much trouble with selling their products this situation may change when the global shrimp shortage is solved. Vannamei production is currently hampered by the outbreak of EMS. As a result, shrimp buyers are experiencing heavy competition for raw materials and prices have increased drastically. As a result all shrimp products are sold out. There is no need to put effort on marketing the product. It is expected that production will recover in the coming two years and if this happens buyers will turn to the cheaper raw materials in Vannamei producing countries or Monodon producers that are known for the good quality of the product (Vietnam / India). For Bangladesh the challenge will be to position itself as a premium shrimp supplier not based on the cheap price (which results of GSP status and 10% export subsidy) but on the supreme almost natural characteristic of its Black Tiger shrimp. The value proposition must be finetuned based on the characteristics of primary production and the best matching and most potential market segments in the international market.

If you are interested to know more about my work in Bangladesh or of other organizations like WorldFish, Solidaridad, and FAO, please don’t hesitate to get in touch with me!

 

Reflection on the recent EMS outbreak in India

A reflection on the recent EMS outbreak in India

Between 2009 and 2010 I stayed a couple of longer periods in Chennai and studied the history and current status of the shrimp industry in Tamil Nadu and Andhra Pradesh. One of my major observations with regard to the development of the shrimp farming sector was that it seemed that the Indian government and industry had learned its lessons from a sequence of issues that hampered growth of the shrimp industry since the late 1990’s.

The white spot outbreaks that devastated the shrimp industry since the late 1990’s resulted in an exodus of fortune seekers who entered the shrimp farming and trading industry during the days that production increased rapidly following intensification of production methods. Only the people that were close to the raw material or had such large business imperium remained active in the industries.

In 2003 or 2004 the environmental lobby forced the government to take action against the unregulated growth of the shrimp farming area and the negative effects for the local communities and the environment. The government founded the Coastal Aquaculture Authority (CAA) which became responsible for setting standards for shrimp farms and he registration of all shrimp farms in the country. Later, the Coastal Aquaculture  Authority also become responsible for the controlled introduction of Vannamei into the country.

Since the EU imposed several bans on the exports of shrimp to Europe from India, the government also had to take action there. Eventually, in 2010 the government and the Seafood Exporters Association of India (SEAI) decided to sign an MoU in which they agreed that for exports to the EU, the exporters would only purchase shrimp from registered farms. This was a motivation for an increasing number of farmers to get registered. In the end, for me as an outsider, it seemed that the government gradually succeeded to move the shrimp sector from a largely unregulated to a largely regulated sector.

This was especially the case when I carefully followed the introduction of Vannamei into the country. Although pilots already started in the early 2000’s, the commercial introduction lasted till 3 years ago. At that moment the CAA had imposed very strict standards on the hatcheries that could import broodstock from a limited number of international suppliers. Farms had to be registered according to a standard that was much more complicated to comply with than for normal shrimp farms. The goal was to guarantee biosecurity and limit the risks of the introduction of an exotic species. For a long time it seemed to be very successful. I was happy to see that for example maximum stocking densities were 60 PL/m2 which resulted in a unique niche for the Indian exporters with relatively large size vannamei.

Although from my perspective the future looked bright, I got slightly nervous when I saw the increase of vannamei production rising to more than 100,000 tonnes in 2012-2013. To me, if you look at the farm and the hatchery registration lists at the website of the CAA which shows exactly how many farms and farming area are allowed to grow vannamei, this was worrisome. My worries were confirmed by the fact that there were only around 23,000 hectares approved for vannamei production by CAA , while exporters estimated that only in Andhra Pradesh more than 50,000 hectares was dedicated to Vannamei production (Shrimp news June 11^th 2013). Although till last week everything seemed to go well, now it turns out that indeed the government let control slip out of its hands and that now the government has to deal with the consequences.

The response of MPEDA (the Marine Product Export Development Authority which is part of the DoF) is strong, and considering the past success of government interventions in the shrimp sector, I am hopeful that India will be able to limit the impact of EMS and hopefully can restart production somewhere early next year and continue its position as frontrunning shrimp supplier.

The situation in India also makes me realize that Vannamei should only be allowed in countries and regions where production is strictly regulated and farmers educated. Vannamei is a product that is grown highly intensive and should not be promoted or allowed to farmers that are not capable of implementing best aquaculture practices. Shrimp exporters in countries like Bangladesh should reconsider their ambition to introduce vannamei and rather built its own unique position in the market with the beautiful monodon products that are raised by their farmers.

The Seafood Trade Portal

Well, it was my intention to write a post on my blog every month. However, as you have probably noted, since my last post a couple of months ago I did not get back to you. The main reason is that I have been too busy with new projects in Indonesia, Bangladesh, Myanmar and in the EU. Finally, I found some space to reflect on my activities the previous months as I am currently enjoying a three week holiday. I think it is interesting for you if I provide some updates about what has kept me busy! I will start today with an update about my activities with regard to the Seafood Trade Portal (STP).

The Seafood Trade Portal (STP)

About two years ago I was approached by a number of Dutch shrimp importers with the request to provide recommendations about where they can find the best (trustworthy) suppliers of tropical shrimp. As I have been working in Tamil Nadu and Andhra Pradesh, and have had the opportunity to meet many of the exporters there, I have a good knowledge about the characteristics of the companies there and would have been able to provide recommendations about which companies to do business with. The same accounts for Bangladesh, Vietnam, Myanmar and Indonesia. However, from my position as a researcher of Wageningen University I could not just provide each importer with the same list of companies. Nevertheless I was surprised by the fact that many importers did not seem to have a good overview of the exporters in many of the Asian countries and therefore I started to discuss this issue with a number of Dutch public and private stakeholders in the shrimp industry. After thorough discussions we decided that it would be an opportunity to do something with this lack of knowledge. We came up with the idea to develop a Seafood Trade Portal (STP) that would provide seafood buyers around the world with a supplier database that provides detailed company information of all EU approved seafood exporters in a number of Asian and potentially African and South American countries.

Different than other supplier databases

Other than traditional supplier databases, such as alibaba, the ambition of the STP is to include all EU approved exporters and provide details not only about their factories but also about the way in which the export companies sources their products. This entails information about the percentage of supply of the export companies that is sourced through middleman, contract farms, spot markets and integrated farms. In my view, the best way to say something about the level of quality control and sustainability by indicating the extent of control that an exporter has over its supply chain. The more control you have over the supply chain by eg providing quality inputs to contract farms or by having your own farms the better you know the quality of the product that you sell to your buyers. Other information such as the farm and factory level certificates, processing capacities, value addition, etc. are crucial for buyers to determine whether an exporter can meet their buyer requirements. The information that we include in the database will be updated on a yearly basis through company visits by researchers and consultants hired and trained by Wageningen UR. In this way we are able to guarantee the quality of data which has proven to be very difficult in other initiatives. The portal will be a commercial service providing one screen overviews of companies and sectors. It will be developed user friendly and enable you to quickly increase your knowledge about eg shrimp exporters and the shrimp sector in Bangladesh, India or Myanmar.

Improved visibility and increased transparency

The database offers buyers a way to search for potential suppliers that meet their buyer requirements and at the same time offers exporters the opportunity to increase their visibility in the international market and distinguish themselves by providing detailed company information. Although the largest exporters (let’s say the A category) that are already certified by initiatives such as ASC, BAP or organic have their marketing well arranged, the B category of exporters that is close to becoming A category often lack the means or knowledge about how to increase their visibility in the international market. As a result of the increased competition for shrimp, these companies will benefit strongly if they are able to improve their visibility in the international market. The Seafood Trade Portal will be a means to do so. In my view, increasing the availability of data about company characteristics (both on the buyer and supplier side) is a win-win that will benefit the entire sector. I strongly believe that transparency will be crucial for the future of the sector and that this initiative can contribute to a more transparent sector. The success of the STP will depend on the willingness of exporters and exporters associations in Asia to cooperate. My challenge therefore will be to convince exporters that transparency is a unique selling point and not a threat in the extremely competitive seafood market.

In a later stage the STP will also include a buyer database with detailed buyer information and market intelligence for important markets such as the EU, the US, China and eg Brazil.

Although I cannot yet provide all the details about what we are gonna do and with who, I am extremely excited. The outcome of the first phase of the project (that will start in September) will be an operational dummy of the supplier database with which we can show what the Seafood Trade Portal can offer. If you are interested to know more about the Seafood Trade Portal, please do not hesitate to contact me directly!

Ok, so far this first update. I will come back to you soon with some more updates about our activities in Bangladesh, Myanmar, Indonesia and with some thoughts about upcoming changes in GSP, dumping duties, and EU common fisheries policy!

Willem

Download Myanmar Report

Hi all,

I don’t want to spam you but because of my enthousiasm about Myanmar I would like to provide you with the link to the full report!!!

https://www.wageningenur.nl/en/Expertise-Services/Research-Institutes/lei/show/Huge-potential-for-Myanmar-seafood-sector.htm

Enjoy!

Cheers,
Willem

Myanmar as a new competitor in the international seafood market

Everyone will have noticed that things are changing in Myanmar. The country is transforming towards a more democratic state. The reforms that are taking place have been encouraged by the EU, the US and other countries. Among others with the withdrawal of trade embargos, the provision of financial support, and promises for additional trade support in the near future. Although until present only neighbouring countries where significantly active in Myanmar, soon the EU, the US and others like Australia, Japan and New Zealand will be positioning themselves as trustworthy trade partners. Myanmar is by many regarded as one of the last unexplored countries in the world. The country has a large population and vast natural resources. Also the Dutch Centre for the Promotion of Imports from Developing Countries (CBI) sees the potential of Myanmar. Therefore, CBI requested me to make an analysis of the local seafood sector. Together with the CBI program manager, I made a trip to Myanmar and wrote a report on the export potential of Myanmar seafood products. Below you find a summary of the report and my conclusion:

Huge potential for Myanmar seafood sector

The seafood sector in Myanmar has a large potential to contribute to food security, employment and economic development. Natural resources are widely available and fisheries is an important source of income and animal protein for the domestic population. Many products, like shrimp, mud crab and sea bass have a large commercial potential in high value markets in the EU and other overseas markets. To reach its full potential many constraints at the production and export level need to be overcome. This concludes LEI Wageningen UR in collaboration with The Dutch Centre for the Promotion of Import from Developing Countries (CBI) based on a quick scan to analyse the EU market potential of the seafood sector in Myanmar.

As a result of years of isolation the seafood sector is currently focused on regional markets and not comparable with seafood sectors in Vietnam, India and Indonesia. Export markets for Myanmar seafood products will change drastically as a result of the withdrawal of sanctions that limited exports to especially the EU and US. Exports of high value raw material like shrimp, barramundi and sea bass, to e.g. Bangladesh, China and Thailand may decrease while exports to the EU, US and e.g. Australia increase. Exports to the US are already increasing steadily and exports to the EU are likely to increase as soon the EU grants Myanmar the GSP status. GSP status will increase the competitiveness in the EU drastically. Although at first this will only benefit capture seafood products, as soon as the residue monitoring plan is implemented it will also benefit the export potential of cultured seafood products.

Cultured shrimp
The shrimp farming sector in Myanmar has collapsed and needs to be revitalised. To provide the sector with an incentive to invest in production, market access to high value markets in the EU, US and Japan is essential. This includes achieving GSP status in the EU, the removal of trade barriers in the US and at the same time the development and implementation of the EU residue monitoring plan to get approval for the exports of aquaculture products. The latter will help lift the 100% checks in the EU and make the Myanmar products even more competitive. Myanmar requires assistance to build capacity to carry out all these tasks.

Capture fisheries
Myanmar could produce more from capture fisheries if it would restrict fishing activities of foreign vessels or require them to land the captured fish in Myanmar instead of in Thailand. To achieve this, policy must be reconsidered and law enforcement by the Myanmar Navy or coast guard should be strengthened. Although there are no figures available, it is likely that if all the fish is landed in Myanmar, considerable volumes of high value fish like tuna would become available and could contribute to export earnings. However, the government and private sector should then also invest in fishing technologies and fishing vessels to develop more deep-sea fishing capacity.

International support needed
In general, international support of governments and NGO’s as well as the private sector is needed to level the playing field between the seafood sector in Myanmar and other front-running seafood producing and exporting countries in the Asian region. There are many opportunities for the private sector to invest in. Input supplies, processing and service provision can contribute to the sustainable development and modernisation of the seafood sector in Myanmar.

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My Conclusion

Although we will need some patience, I really believe that Myanmar seafood exporters are awaiting a great future. The business mindset is fantastic and it is obvious is that the businessman are longing for new business opportunities. Everyone speaks proper English and soon Myanmar will be reconnected to the global banking system. I am absolutely convinced that with some patience and support there will soon be a new serious competitor in the international seafood market! If you would like to have a discussion with me about the potential of Myanmar or if you are interested in the full report, please don’t hesitate to contact me!

Warm regards, from a rainy the Hague,

Willem

Sharing thoughts about the international seafood market

Since a couple of years I have had the opportunity to deepen my understanding about the structure and dynamics of the international seafood market. I have a passion for the people who produce and trade tropical seafood products. And I conceive it as a privilege and challenge to be able to invest time to understand why and how exporters in developing countries choose their strategy to deal with the everchanging competitive environment in which they operate their business. I strongly believe that the production and trade of seafood products can contribute to food security and social and economic wealthfare and development for millions of people around the world. It is essential however, that we work together on a sustainable pathway of development.

With this blog I will start to make my thoughts about interesting developments in the international seafood market publicly available. I plan to write shorter and longer posts about topics like the new US shrimp dumping case, the opening up of Myanmar as an important seafood supplier for the international market and the implications of strict EU regulations for suppliers from developing countries. I will also post about topics that are brought forward by my colleagues at LEI wageningen UR. Although I am still a relative newcomer, by sharing my thoughts I hope to trigger colleagues and friends around the world to engage in discussions and exhange thoughts which in the end will motivate all of us to keep on working towards a flourishing sustainable seafood industry.

I hope to amuse you a bit with the forthcoming blogs. I will try to come up with a new blog at least once a month!