If there's any Philippine agribusiness that may seemingly conquered all odds, it is aquaculture. In the last five years, the sector's performance, unlike other agro-industries, has been consistently good. In 2010, the industry managed to post a 2.68% production increase as against last year at five million tonnes despite the effects of drought to agriculture brought about by the El Niño phenomenon. 

 

BAS also reported that the increase was also attributed to more operators investing in milkfish brackishwater pond production due to high demand from new processing plant in Zamboanga City. There was also sufficient supply of natural food for brackishwater tilapia. BAS also cited the prevailing weather conditions which favoured the growth of oysters in Zamboanga City and also opened more areas for seaweed production in Camarines Sur, Palawan and Zamboanga Sibugay. Increased areas for seaweeds were also due to higher demand local and overseas and this also spurred expansion in Maguindanao and Zamboanga City.

 

If the 2010 performance is any indication, this year may bode well for aquaculture too.

 

 

 

Tilapia, milkfish and seaweeds are the three stellar species for aquaculture. With an annual growth at 6.5%, the Philippines is the biggest milkfish producer in the world while tilapia (also known as "aquatic chicken") is the second most important food fish for domestic consumption and plays a crucial role for the country's food security programme. Seaweeds - used for industrial purposes such as stabiliser, binder and emulsifier - are among the biggest greenback earners, generating more than a hundred million dollars yearly. Seaweeds account for 70% of total aquaculture production while milkfish and tilapia contribute 16% and 9%, respectively.

 

Why are these species the perennial top performers for aquaculture? Dr Nelson Lopez of the Bureau of Fisheries and Aquatic Resources says their resources are naturally abundant in the country. "They are readily available. Milkfish and tilapia are the favourite fish of the Filipinos and local demand is always huge so naturally supply is always there. On the other hand, seaweeds are very important non-food commodity because it is among the country's top exports."

 

With the massive local production, there were attempts to export milkfish few years ago with overseas Filipino workers as the main market. However, supply has been very dismal although country was able to export at least 289,200 tonnes of milkfish in 2005 valued at PHP17.6 billion (US$404.46 million) with the US accounting for 43% share, the volume isn't enough to supply the international requirement. For tilapia, some significant volume of fillets was once shipped but this was also halted due to lack of supply for exports. "The local market already consumes it all so there isn't sufficient supply for the export market," tells Lopez.

 

But more than inadequate supply, the country still lacks the criteria needed for the export market. According to the Department of Trade and Industry, many players from the milkfish sector cannot meet the strict quality and safety requirements of importing countries. Heightened environmental concerns and quality and product safety consciousness have increased the pressure on exporting markets while developed countries have demanded for safer and better quality products which has resulted in more stringent guidelines and regulations. Although the country exports milkfish in frozen, canned, dried and marinate forms the country has to expand its production by an additional 5% a year in order to capture the foreign market. The Philippine Council for Marine and Aquaculture Development believes that milkfish exports are possible if culturing 500-600 grams milkfish should be done through the low intensive method and initiate in processing milkfish into value-added products to create good export demand at attractive prices. The government must also continue to allocate funds in form of credit to support the farmers. 

 

The situation for tilapia is no different. According to website PhilAquaculture, the ideal marketable size for tilapia in the international market weighs 450g and will take seven to eight months to culture under local conditions. Local tilapia only weighs 200-300g per piece and takes a shorter period to farm and farmers would prefer this interval rather than extend it to eight months because it will mean more feed consumption and thereby higher risk of stock loss due to typhoons and floods. Prices are also another reason. PhilAquaculture says the average domestic wholesale price of tilapia is PHP60 (US$1.35) for 200-250g size while the average price of imported frozen fillets in 2009 was US$1.81 per pound (lb). At a fillet recovery yield of 30%, this will amount to a liveweight price of US$0.54/lb or PHP23.86 or nearly PHP50 (US$1.15) per kilo. But this price is for the 450g size and still excludes processing and shipping cost and from this computation, PhilAquaculture says the wholesale market price of tilapia is more attractive to local market than the export price. The website also added that even at a wholesale buying of PHP60/kg, (US$1.38) the high cost of domestic production is the problem and unless a lesser cost to produce tilapia is achieved, the Philippines will never be able to compete in the export market. In a comparison with Thailand, the wholesale price of 500g tilapia is THB25 or PHP36 (US$0.83) while the liveweight is at THB37 (PHP53.81; US$1.24) and the 300g is THB20 (PHP29.08; US$0.67) - hence relatively cheaper and can obviously compete in the export arena.

 

It may be an export winner but the seaweed industry is now facing a string of problems, most notably the tougher competition waged by emerging seaweed producers China and Indonesia. Philippine seaweed was dominating the export markets in the 70s and 80s which prompted China and Indonesia to copy its technology by "pirating" Filipino seaweed producers and teach them the process. Benson Dakay, president of the Seaweed Industry Association of the Philippines, recalled the years 1977 to 1995 as the "golden years" for processed seaweeds as the "whole world was using Philippine seaweed" and global chocolate brands such as Mars and Nestle are getting seaweeds only from the Philippines. However, Dakay laments the government's lack of support and abnormal weather patterns has significantly slashed production - from 150,000 tonnes of raw seaweed a year to only 80,000 tonnes recently, hence, losing some of the country's existing foreign buyers. Last year, the industry has pushed for an export subsidy similar to China's 13.5% to keep the Philippine seaweed competitive over the long term against the increasing production and export of its neighbours. Dakay said China's subsidy can still enable them to buy Philippine seaweed and can still sell cheaper than Philippine processors because of stable currency and export subsidy. Dakay urged the government to maintain the Philippine currency at PHP44 (US$1.01) level against the US dollar to keep investors and processors at bay otherwise a massive relocation to China and Indonesia is inevitable. Be that as it may, Dakay remains optimistic that Philippine seaweed - because of its superior quality, particularly of the variety carageenan - will still prevail.

 

 

 

There was a time that stakeholders are keen on reviving vannamei to reclaim its top spot as the leading producer of shrimp as well as embarking on pangasius, inspired by the success story of Vietnam.  Although endeavours for these species were already on the grind, the government temporarily suspended the undertakings as they no improvement is seen at the moment. "For vannamei, we are hearing reports that it is not a good investment because production cost is too high, if they can get a 60-70% harvest, it might only be break even for them. Since we have revived vannamei for exports, sadly we cannot bring the product out of the country for some reason. For pangasius, there are still issues to be resolved like environmental and ecological issues. Though the recommendation is for them to be confined in hatcheries and ponds, the possibility of escapement concerns us just like the janitor fish two years ago where it sowed chaos on our marine environment. This is restricted in international code of good practices," explains Lopez.

 

Lopez also decries the 600,000-tonne entry of cheaper pangasius imports mostly from Vietnam which prevents the pangasius industry from fully taking off. He said, "How can we encourage farmers to produce if there are imported and cheaper goods coming in? If there are surplus of production locally produced, then that's the time we can compete. But looking at the competition, even Vietnam is being protested by dumping in the US market. So we should really review our existing policies and protect our local trade." 

 

 Nevertheless, as long as there are markets, hatcheries are continually expanding and that more investors are coming in, Lopez thinks that there is no reason to stop producing vannamei and pangasius. On this note, the government is now keen on culturing other species which is touted to be of high value for both local and international markets such as grouper, group snapper and pompanos. This way, Lopez says the sector can have a variety particularly on the food fish and not only dwell on milkfish and tilapia alone.

 

 

 

After a series of trade agreements with Asean and other countries, Lopez is disheartened that their call for a zero-duty for aquaculture feeds and its components has not been granted. "From my understanding, it is an international and regional agreement so I think we have to comply with it. But I still hear stories that some importers are being charged so feedmillers have no choice but to increase their rates. I think a reduction was just done but not a zero tariff so I hope concerned government agencies would sit down and clarify these issues," he stated.

 

As such, feed imports such as fishmeal keep on rising. Of late, fishmeal prices were steady at PHP50 (US$1.15) after reaching a peak of PHP80 (US$1.84) in early last year and hitting the lowest price at PHP30 (US$0.69) in the second quarter of 2010 last year. Nonetheless, Lopez clears out issues that fishmeal is still using trash fish, particularly the local ones. He said, "There's no trash fish anymore because people, particularly in the impoverished areas, consume these trash fish and it is even sold at PHP20 (US$0.46) per kilo. So it is understandable that fishmeal is getting expensive because the quality is getting better. So we're exploring other options of formulated feeds rather than fishmeal."

 

As for mariculture, Lopez says there are already 57 sites nationwide but they are still evaluating the developments. "We are still in the process of building hatcheries, processing plants and other facilities so we really do not know which are operational. We are inviting fisherfolks, rather than going out to seas because our oceans are already depleting, we would like to see them operate in our mariculture parks," he added.

 

But what concerns Lopez is the climate change wherein even forecasters are having a hard time predicting the weather. "Last year, we experienced a severe drought so there were several instances of fish kill. Right now we're experiencing La Nina or intense rain so we do not know how many typhoons will hit us. The weather is getting to be extreme so its hard for us whether we would do advanced harvesting or not. We're bracing for the worst this year but I hope that we can still sustain a good performance," Lopez said.

All rights reserved. No part of the report may be reproduced without permission from eFeedLink.