Implementation Status of the Research Components (March - August 2002)

Component 4 - Analyses of Fish Supply and Demand and Projections

Estimation of supply and demand functions will be done in this research activity. Data collection started in January 2002 and technical reports are due in July 2003.

Methodology (based on the inception report)

Supply function:

Estimation of supply functions will be based on major fish species groups and sources (aquaculture or capture). Analysis will use either primary or secondary sources, whichever is available. For each species group, the specific supply function of the capture fisheries catch should be a function of prices of inputs (including effort), prices of outputs (species), stock conditions, environments (including proxy variables like region), and management options/policies. For aquaculture supply, a profit function approach will be used for estimating species/species group-specific supply functions. It is assumed that fish production from aquaculture is represented by a normalized quadratic profit function. Following the envelop theorem, supply functions for different species groups will be estimated.

Demand function:

Estimation of demand elasticities will be by species group/fish type, income class and location (rural vs. urban). As fish is not a homogenous commodity, demand functions will be estimated by species group/fish type. In terms of methodological framework, a multi-stage budgeting framework will be used that estimates a demand function for food in the first stage, a demand function for fish or animal protein (as a group) in the second stage, and a set of demand functions for fish (or fish and meat products) in the third stage, taking into account the issue of zero consumption. If fish consumption/expenditure data by fish species from national statistical agencies collected through household surveys are available, fish consumption surveys will be conducted as an alternative to generate the necessary data for estimating the demand.

Projection and Simulation:

A 15-year projection of the supply of and demand for various types of fish will be carried out in this component after the finalization of demand/supply elasticities.

While some countries will be using their national government surveys for these exercises, other countries are conducting their own surveys for the same purpose. Table 10 presents the status of each collaborating country for this component.

Data Collection

Indonesia will use the 1999 National Socioeconomic Survey Data from the Central Bureau of Statistics. The survey comprised around 65 000 households. The collaborators in the Philippines are using the Family Income Expenditure Survey (FIES) of 40 000 households that covered the year 2000. China, Malaysia and Sri Lanka will also be using data from their national government surveys. Bangladesh, India, Thailand and Vietnam are presently collecting data covering freshwater and coastal waters. Secondary data are being collected to complement primary information. In Malaysia where prices of food items including fish are not available in national data, the team is currently conducting nationwide appraisal to gather the prices of relevant food items.

Supply and Demand Elasticities

Countries like China, Indonesia, Philippines and Thailand have started estimating demand elasticities (income and price). A series of visits by partners to the WorldFish Center at Penang, Malaysia took place from June to August (Dr Somying Piumsombon and Ms Nartaya Srichantuk of Thailand on 3-8 June; Dr Yolanda T. Garcia, Philippines on 19-24 June and Dr Sonny Koeshendrajana of Indonesia on 7-13 August). During each visit, the corresponding collaborators together with the project team from WorldFish discussed and jointly processed their data. The visits also served as a training workshop for the collaborators.

The classification or groupings of fish varies among countries both for supply and demand. The number of fish groups ranged from 6 to 13 species groups. Appendix 6 showed the country-specific preliminary groupings of fish species.

Preliminary results of fish demand in Bangladesh, Philippines, Indonesia and Thailand show that the response of food expenditure to income changes and the response of consumption of various types of fish to changes in fish expenditure are non-linear. Per capita fish expenditure is higher for urban populations compared to rural populations. Income elasticity of demand for fish falls with an increase in income, suggesting that fish is a luxury commodity for the poor, and a necessity for the rich. In general, income elasticities of different fish types consistently fall with an increase in income level of the household.

Shrimp, considered as a high-value product, has the highest own-price elasticities (in absolute terms) in Bangladesh and Thailand at all income levels. Yellow tail fish and other high-value fish have the highest own-price elasticities (in absolute terms) in Indonesia and the Philippines respectively. In Thailand, the demand for dried fish is least sensitive to changes in the prices of other fish types. Catfish is a complement to almost all types of fish except for tilapia, silver barb and snakehead, for which it is a substitute. Thai silver barb is also a substitute for shrimp, other high-value and other low-value fish.