DFM Sri Lanka literature review - Dried fish trade

The largest share of dried fish produced in Sri Lanka is traded within the island. Small proportions are used for subsistence by producers and a very small quantity is exported. Around 65% of the national demand is produced locally, while the remainder is imported mainly from South and Southeast Asian neighbours [1]. The main trading partners for dried fish imports included Pakistan, India, Indonesia, Thailand, United Arab Emirates, and the Maldives in 2004 [2] and in 2011 [3] but China appears to have also become a source of imported dried fish in the last decade [4]. Dried fish trading occurs at domestic (internal) and international (external) levels.

Internal trade

Statistics and studies which would provide a macro-level analysis of the internal trade of dried fish in Sri Lanka are conspicuous by their absence. What little can be gleaned is from passing references to dried fish in research centred on marketing of fresh fish, as in the work of Murray et al. [5]. Local dried fish value chains encompass producers, processors and traders connected to local, regional, and national markets. Dried fish purchased from producers and processors are mainly sold by the processors themselves or traders in local fairs (polas) [6] or small general stores (kades) scattered throughout villages and towns on the island [7]. On certain occasions, collectors connect producers/processors to wholesalers or to retail markets. Specialized wholesale traders move between processors in coastal communities, local markets, and the central market in Colombo, moving the bulk of the marine dried fish supply within the country [8]. The small-scale traders, who operate at the local level, many of whom are women, sell small, low-cost varieties of dried fish (Siason et al. 2012). There is a seasonal variation in these local markets with increases in marine dried fish trading during the dry season and in inland dried fish trading in the rainy season [9]. The extent to which marketing has changed in the last two decades, especially the role of wholesalers and expansion of supermarket chains within the country and potential trends towards concentration within the trading segment of the value chain, needs to be assessed.

External trade

In contrast to internal trade, external trade in dried fish is well-documented, and longitudinal data available from several sources (MFARD; HARTI, Customs Department). Thirty-five percent of dried fish (excluding maldive fish) consumed in Sri Lanka, amounting to 32,176 Mt in 2018, was imported to meet domestic demand [10]. This was a significant decline from 1995, when 78.9% of dried fish (excluding maldive fish) consumed in Sri Lanka was imported (ibid.).  Of all dried fish (including sprats and maldive fish) imported, 50% came from Pakistan, 18% from Indonesia, 16% from India, 9% from the United Arab Emirates and 7% from the Maldives in 2004 [11].

Canned fish, dried fish, and maldive fish are the main processed fish products imported to Sri Lanka (Figure 6.1). Canned fish imports increased gradually from 2009 to 2014 and then showed an exponential rise from 2014 to 2015. Since 2015 canned fish has overtaken dried fish as the main imported processed fish product.

Figure 6.1 Different types of imported processed fish and fisheries products (Source: MFARD 2019)

Sprats (anchovies) account for 70 percent of total imports of dried fish [12]. Thailand is the major supplier of dried sprats, which accounted for 78 percent of imported sprats in 2004 [13]. Pakistan supplied 43% of other imported fish in 2004 [14]. In spite of the declining trend in dried fish imports from 2011 (Figure 6.2), sprat imports remained unchanged at around 25,000 Mt during 2012-2018 [15]. Compared to sprats, other dried fish imports reached a peak of 50,000 Mt in 2000 and have since declined by around 35% in 2018.

Figure 6.2. Imports: Quantity of sprats and other dried fish (Source: MFARD 2019)

Although the quantities are far lower than other imported dried fish items, maldive fish shows a declining trend from 2008 to 2018 (Figure 6.1). Yet, it is used widely as a condiment in vegetable curries. It has also become popular as a preparation of 'maldive fish sambol', which is consumed at celebrations and as a bottled 'ready-to-eat' commodity. Maldive fish accounts for 8% of the total processed fish imports [16].

Exports of dried fish in relatively smaller quantities in comparison to imports, go to countries such as Canada, Singapore, Middle-East, and Australia, where there is a demand for this commodity among Sri Lankan diaspora communities. Sri Lankan anchovy, Spanish mackerel, and queen fish (katta) are popular exported dried fish varieties [17].

Market relations in dried fish value chains

Trading is a core component of dried fish value chains, linking producers/processors with consumers. Trading of dried fish occurs at the levels of collecting, wholesaling, and retailing. The engagement of women in micro/small-scale dried fish trading at the local level is well documented [18] . Apart from selling dried fish that they themselves have processed, women traders in fishing communities purchase dried fish from relatives, friends and neighbours and sell these door-to-door or at local markets in neighbouring villages and towns. Siason et al. [19] elaborates this as follows:

Substantial numbers of vendors are involved in retailing dried fish at the weekly markets known as “Pola” in Sinhala...vendors in Galgamuwa and Anamaduwa of the North-western province... come from nearby coastal areas to inland areas to sell the smallest dried 'trash' component of their husband's catch, which they process themselves. An alternate strategy adopted by many women vendors involved the purchasing of some or all of their stocks from wholesale traders. For most of the women vendors, this is a part-time occupation, which is highly seasonal” (page 33).

Women traders in a fishing community in Puttalam district, on the west coast, organized to travel together in hired vehicles or public transport to fishing communities on the east/northeast coast to purchase dried fish from processors there, and bring stocks back to sell in west coast villages and towns [20]. In analyzing the monthly earnings of dried fish traders, it was found that there was no difference in earnings between male and female traders in two fishing communities in the Puttalam district, indicating gender equity within this activity at the local level. However, in two fishing villages in Trincomalee district, male traders received around 88% of earnings and female traders merely 24% of earnings of dried fish traders (women and men) in the two Puttalam fishing villages [21]. This reveals the prevailing inequalities based on gender and region within micro dried fish trading in the country.

Despite women's extensive participation in dried fish processing [22] and micro-small trading activities, men predominate in large-scale marketing of processed fish [23]. As indicated by Murray et al. [24], wholesalers travel between dried fish processing communities, local markets, regional and national markets, moving the bulk of the dried fish stock within the island. Dried fish processors in fishing villages in Matara and Puttalam districts sell their products to door-to-door vendors, collectors, and wholesalers who visit their villages [25]. In Trincomalee district, male wholesalers are predominant in purchasing from processors [26], while small quantities are also sold within communities by women traders [27]. Similar observations are reported in Jaffna, where the most prevalent dried fish value chain is, selling through producer, collector, wholesaler, and retailer. Selling dried fish at any of these nodes is differentiated mainly by quantity. However, women's participation is predominant at the processing level, rather than wholesaling and retailing in Jaffna town [28]. De Silva et al. [29] explains men's dominant roles at the higher end of value chains, such as commercial fish processing, wholesale business and markets, as due to the necessity for high levels of investment, which in turn bring in higher returns. In contrast, women's participation at the lower levels of value chains, as well as value chains with fewer nodes, is attributed to cultural practices and poor literacy [30]. Siason et al. [31] maintain that the scale of dried fish marketing is dependent on volume, species composition, gender, spatial and temporal aspects.

Constraints encountered by women dried fish traders are discussed by Koralagama and Bandara [32]. Women are restricted from buying fresh fish and selling dried fish due to cultural taboos - for example, they are not permitted to go to the beach. This is more evident in Sinhala Buddhist, Tamil Hindu and Muslim, than in Sinhala/Tamil Christian fishing communities [33]. For example, in two Tamil Hindu fishing communities in Puttalam and Trincomalee districts respectively, women's access to the beach was constrained not only by taboos preventing women from touching the boats and fishing gear, but by male ideological notions that it was their role to earn money for women [34]. Moreover, women traders demonstrated less bargaining power in negotiating with male dried fish buyers [35].

Although institutions and access to credit facilities are relatively well-established for fishers [36], there is a lack of data on institutions that support or provide services to the dried fish industry. However, in the absence of formal financial institutions, some dried fish processors and traders obtain credit from informal sources, such as boat owners, large-scale traders, money lenders and wholesalers, often leading to indebtedness [37]. The extent of the role played by formal vs. informal sources of credit in the dried fish industry needs to be explored in the study.

In contrast to that of the dried fish production segment, the literature on the internal dried fish trade is sketchy at best. The quantities that are traded internally in comparison to subsistence use, the numbers employed in dried fish trading, the major regional market hubs, exchange relations among collectors, wholesalers and retailers, gender relations, as well as the structure and dynamics of governance within this sector, are little known.