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Factors influencing fish prices in Southern Malawi
1Randall E. Brummett
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International Center for LiÕing Aquatic Resources Management ICLARM , P.O. Box 2416, Cairo, Egypt
Accepted 9 December 1999
Abstract
Nine markets in the Southern Region of Malawi were studied. The prices of 79 separate purchases were compared for market type, species, form of preservation, total length, distance of retail market from the capture fishery of origin, and distance of retail market from the main commercial center of Blantyre. Interviews with retailers and consumers were conducted to help interpret price data and better understand marketing procedures. Average prices were significantly higher in urban than in rural markets. Fresh fish were found to fetch higher prices in rural but not in urban markets. In neither type of market, a premium was paid for a particular species group or for larger fish. The implications for aquaculture development in Malawi are discussed.q2000 Elsevier Science B.V. All rights reserved.
Keywords: Malawi; Pricing; Fish markets; Aquaculture policy
1. Introduction
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UNICEFrGOM 1993 and the World Bank 1996 recently reviewed the Malawian economy and published the following statistics:
Ø The inequality of income distribution in Malawi is the worst of any African country for which information is available. The vast majority of wealth resides with small urban populations.
Ø Ninety percent of Malawi’s population is rural.
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Ø Eighty percent of Malawians earn less than MK 241 US$16.00 in 1996 per year. Ninety four percent of these people reside in rural areas.
)Corresponding author. 1
ICLARM contribution number 1556.
0044-8486r00r$ - see front matterq2000 Elsevier Science B.V. All rights reserved.
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Ø A 50-kg bag of diammonium phosphate fertilizer retails for over MK 500.
Ø Seventy five percent of Malawian families cannot feed themselves, producing, on the average, only 64% of their own food requirements. Their meager cash income can make up only a portion of the shortfall.
The pervasive hunger and lack of cash among rural populations constrain both production and marketing of agricultural commodities. For example, with no cash to purchase fertilizers or other inputs, farmers tend to rely on the existing farm resource base, which, of course, diminishes over time as produce is eaten andror sold. In addition, since most consumers are lacking in cash to purchase food, they must rely on traditional or barter systems to get them through the seasons when their own farms Žmost consumers are also smallholding farmers have failed to produce enough for the.
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entire year Brummett, 1995 .
Aquaculture integrated into the smallhold farming system has been shown to improve Ž
both productivity and cash flows with little or no external input Brummett and Noble, .
1995 , and is being promoted by the Malawi Fisheries Department as a means of addressing rural poverty and resource degradation. Existing technology focuses on maximizing individual fish size based on the assumption that larger fish would be more profitable to grow.
The profitability of aquaculture will be largely determined by market conditions and the technology available to fish farmers. The most useful technology will permit farmers to customize their production system to meet market demand. Field workers have noted that little or no premium is paid by African consumers for fish above a minimum market
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size Gilberg, 1966; Mdaihli, 1992 . To determine what types of technology should be developed and promoted, the Malawi Fisheries Department requested the International
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Center for Living Aquatic Resources Management ICLARM to learn how urban and rural markets differ in terms of demand for fish and what type of fish should be grown to determine the size that optimizes crop value.
2. Materials and methods
In Africa, there is normally only one major market per town or city. In small towns,
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this market is typically open only 1 or 2 daysrweek Agnew and Chipeta, 1979 . Markets in larger urban centers normally operate every day. A team of two research support staff from the Malawi National Aquaculture Center was enlisted to purchase fish
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from nine typical markets around the Southern Malawi Region Table 1 . Markets were selected so as to represent a range of populations and distances from fisheries and other markets.
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Table 1
Southern Malawian markets sampled for fish availability and price.
Blantyre, the major urban center in Malawi, was used as a reference point. No significant differences in fish
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price were related to distances from fishery or Blantyre P-0.05 .
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Market Market type Distance from fishery km Distance from Blantyre km L. Chilwa L. Malombe L. Malawi
Blantyre Urban 99 167 191 0
Zomba Urban 35 103 127 64
Liwonde Urban 138 50 73 117
Domasi Rural 25 88 112 79
Songani Rural 20 93 117 74
Sakata Rural 10 103 127 84
Mkuba Rural 0 113 137 104
Namasalima Rural 4 109 133 90
Namwera turn-off Rural 30 81 104 88
distance in kilometers of each market was obtained from the 1992 Malawi Road and
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Tourist Map Ministry of Information and Tourism .
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Fish are sold according to size and family, rather than species e.g., ‘‘kambuzi’’ are .
mixed small cichlids, whereas ‘‘mbuta’’ are mixed medium-sized cichlids . For pur-poses of comparison, fish species were grouped according to their family as cichlids, silurids, cyprinids and others.
Fish preservation was coded according to increasing labor and energy required in
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their preparation 0sfresh, 1ssun dried and 2ssmoked . To compare these three major forms of product in the market, fish weights were converted to dry matter equivalents. As it was impossible to retroactively determine the whole body weights of fishes that had been dressed in various and inconsistent ways, and since the vast majority of fishes are sold whole, only whole fish were purchased for this study.
Each type of fish commodity available in each market was purchased. As different Ž
sizes of fish are sold in different forms larger fish by the piece, smaller fish by the
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‘‘pile’’ or ‘‘plate’’ , the cost in Malawi Kwacha US$1sMK 15 in 1996 of 1 kg of dry fish weight was calculated and used in making comparisons. In Malawi, fish ‘‘size’’
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is subjectively assessed, both by retailers and purchasers Gilberg, 1966 . For purposes of study, average total length in centimeters of the individual fish in each purchase was used as an indicator of fish ‘‘size.’’
Virtually all fish currently in the markets are derived from the three major capture
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fisheries Lakes Malawi, Chilwa and Malombe . Each fishery produces its own group of
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fish species Gilberg, 1966 . To determine if distance from point of capture to point of retailing was affecting prices, the distance of each market from the source of each type of fish was determined.
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Each market was visited at least twice. Altogether, 79 33 in rural markets and 46 in .
After making their purchases, the sampling team conducted simple interviews to help
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explain price data. Questions asked of fish buyers and retailers were the following:
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Ø What size of fish do you normally buy sell ? Ž .
Ø What size of fish do you prefer to buy sell ? Ž .
Ø What species of fish do you normally buy sell ? Ž .
Ø What species of fish do you prefer to buy sell ?
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Ø Conditional Why buy sell fish you do not prefer?
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Multiple regression was used to relate fish price P to market type M , fish species
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group S , state of preservation F , total length L , distance of the market from the
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fishery D and distance of the market from Blantyre B according to the following relationship:
Psf M,S,F,L,D,B .
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.
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Dummy variables were assigned to nominal data state of preservation, fish species .
group and market type . To confirm results for nominal data, differences between market type, fish species group, and state of preservation were also compared with ANOVA, followed by either Duncan’s New Multiple Range Test or Student’s t-test. ŽZar, 1974 . All statistical methods produced similar results..
3. Results
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Multiple regression Table 2 of fish price against market type M , fish species
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group S , form of preservation F , total length L , distance of market from the fishery ŽD and distance of the market from Blantyre B yielded the following:. Ž .
Ps163.80y0.23My0.17Sy0.28Fq0.08 Lq0.17Dy0.10 B
r2s0.444; SEs37.94; P-0.0001 .
Ž
.
Average prices for different species groups and preserved forms in different markets Ž
are presented in Table 3. Overall, prices disregarding species group and state of
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preservation were significantly higher P-0.05 in urban than rural markets. In urban markets, the average price for fish regardless of preservation state or species group was MK 138.77 per kg dry matter. In rural markets, the average price was MK 88.05.
Apparent differences in price of the various species groups were found to be
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statistically insignificant P-0.05 . Over the course of data analysis, it was realized that the type of fish is confounded with size and preservation state. Smaller fish tended to be sun-dried. Silurids and larger fish, if processed, tended to be smoked. This
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observation is consistent with those of other observers Gilberg, 1966; Mdaihli, 1992 . Cyprinids in Southern Malawi are either riverine or, if lacustrine, make annual
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spawning migrations up rivers during the rainy season these data were collected just .
Table 2
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Summary of the regression of market price per unit dry matter against type of market urbanrrural, M ,
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species group S , state of preservation F , the fish’s total length L , distance of the market from the capture
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fishery D , and distance of the market from Blantyre B
Variable Regression coefficient Standard error Significance
Y-intercept 163.80 37.94 0.000
Over all species groups, average price for fresh fish in rural markets MK 126.16
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was significantly P-0.05 higher than for preserved forms MK 59.97 . Fresh fish Ž
were, however, relatively rare in rural markets 55% of purchases were for either dried . or smoked fish, whereas 87% of purchases in urban markets were for fresh fish . Fresh fish in rural markets tended to be from a near-by fishery, while species from farther away were preserved. In urban markets, most fish were being sold fresh, regardless of
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origin, and there was no significant difference P-0.05 among preservation forms. There were no differences between prices of dried or smoked fish within markets or species group.
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On a dry weight basis, there was no statistically significant P-0.05 premium paid
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for larger fish in any market Fig. 1 . Fish were sold strictly by weight with a 100-g fish
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being of equal value to four 25-g fish within a species and preservation category . Minimum market size of all species was found to be very small, about 10 cm.
Multiple regression of price against the distance of the market from the fishery and distance of the market from Blantyre identified neither of these parameters as
statisti-Ž .
cally significant P-0.05 .
Table 3
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Average prices MK per kg dry matter for different species groups and preserved forms in urban and rural markets in Southern Malawi.
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Fsfresh, DrSsdried or smoked lumped as no significant differences were identified between smoked and
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dried forms . There were no significant P-0.05 differences between species groups. Average price in urban
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markets MK 138.77 was significantly P-0.05 higher than in rural markets MK 88.05 . In rural markets,
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average price for fresh fish MK 126.16 was significantly P-0.05 higher than for preserved forms MK
. Ž .
59.97 . There were no significant differences between preservation states in urban markets P-0.05 .
Cichlids Silurids Cyprinids Others
F DrS F DrS F DrS F DrS
Urban 173 160 nra 96 71 148 102 100
Fig. 1. Scatter plot of fish price against fish length in Southern Malawian markets.
Responses to the informal questionnaire revealed that most consumers preferred
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larger fish but normally purchased smaller fish because of lack of cash 74 % . Of
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interviewed consumers, 15% actually preferred smaller fish or smaller species . Only 11% were purchasing the fish they actually preferred. Consumer responses were similar in urban and rural markets. Retailers were mixed with different strategies being employed for urban and rural markets. In urban markets, 41% of retailers claimed they were selling fish they did not prefer because of lack of availability of other species and sizes at the fish landing sites or at local wholesale outlets. The balance was focused on dried or smoked forms because of ease of transport and storage. In rural markets, 78% of retailers were purposely bringing smaller and smoked or dried fish to market because
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they were easier to transport, store and sell to poor consumers . Some retailers, 15%, were purchasing and reselling fish they did not prefer due to cash-flow problems, while a small number of retailers, 7% said they were selling what was available from the fishery.
4. Discussion
The data collected in Southern Malawian fish markets indicate that aquaculture development strategies, which focus exclusively on producing larger individual fish, are unlikely to result in increased profit to the farmers, at least in the short term. As has
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been noted by other observers Gilberg, 1966; Mdaihli, 1992 , minimum market size of fish of all species is very small and, while market demand is high, most consumers are
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very poor and are either willing to sacrifice quality as measured by individual fish size for quantity, or do not associate fish size with quality. Rather, freshness seems to be the
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a more important characteristic in determining price. Ladd and Suvannunt 1976 and
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Unnevehr 1986 demonstrated the importance of the consumer’s notions and personal
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working in Kuwait, and Sevilleja and McCoy 1979 in the Philippines also noted significant interplay between freshness, species and size in these very different markets. Although this study did not deal with overall market size, the need for fish in rural
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areas is high UNICEFrGOM, 1993 . Anecdotal evidence from on-farm research Ž
indicates that pond production can be rapidly sold on the pond bank Brummett and .
Chikafumbwa, 1995 . In fact, there is sometimes a premium price paid for these fish, since they are fresh and sold in small quantities without competition from the capture
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fishery Chimatiro, 1998 . Rural consumers remain poor, however, and any significant increase in production will have to be sold in progressively more open, more
competi-Ž .
tive and more lucrative urban markets Gilberg, 1966 .
However, the lack of proper refrigeration facilities even in urban markets, means that
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all fresh fish must be sold by the end of each day Chowe, 1995 . Fish sellers are consequently not able to negotiate higher prices for fear of losing their investment ŽChimatiro, 1998 ..
The ability to store fresh fish or get them to urban centers, where they can be sold for more, could play the largest role in determining how much money a fish farmer will make. Without proper transport or storage facilities in rural areas, the opportunity to
Ž compete for the urban fresh fish market is restricted to the wealthiest of retailers Agnew
.
and Chipeta, 1979; Popham, 1980 . Considering the increasing cost of transportation, it might not be economically feasible under current conditions to increase the volume of fresh fish going into urban markets. Any substantial increase in volume, without the ability of retailers to store fresh fish, is bound to drive prices downward. On the other
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hand, Street and Sullivan 1985 found that pricing mistakes and consequent temporary surpluses due to inadequate marketing infrastructure can make more fish, albeit of somewhat lower quality, available for poorer consumers.
4.1. Recommendations to the Malawian Aquaculture Industry
Producers should focus on species for which pond carrying capacity is the highest. These will be species that feed low on the food chain and can tolerate crowding and poor water quality. Another important characteristic of the fish population will be the ability to rapidly expand to reach carrying capacity in the shortest amount of time. Likely species will be able to reproduce in the pond. Such species as the tilapias are good candidates. Ponds can produce a higher weight of small fish than of larger fish, ŽHepher, 1988 so farmers should focus their attention on maximizing the total biomass. of fish produced in their ponds more or less without regard to individual size of fish at harvest.
Production research should focus on maximizing the number of cycles per year. More production cycles per year of minimum market-sized fish would yield higher returns than one cycle producing larger fish. Low-cost input strategies will help keep prices
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production on maximizing pond output in terms of biomass rather than individual fish size.
Low-cost storage and preservation techniques, which result in less loss of quality, would be useful to retailers. The critical factor in fish preservation appears to be maintaining a minimal quality level. The best approach might differ with species and climatic factors, but any improvement in quality will probably result in higher prices in both rural and urban markets. However, policy makers should be aware that increases in
Ž quality and price could reduce the availability of fish to the poorest consumers Street
. and Sullivan, 1985 .
Acknowledgements
Several people more knowledgeable in the fields of economics and pricing than I am helped substantially by reading and commenting upon drafts of this paper. In alphabeti-cal order, I would like to thank Dr. Madan Dey, Dr. Terry Hanson, Mr. Henrik Nilsson and Ms. Sevally Sen for their input.
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