|Handling, Processing and Marketing of Fish in Bangladesh - Part 1 (NRI)|
|Section 4: The shrimp industry|
4.1.1 Shrimp caught by artisanal methods or by farming
Shrimp caught at sea by trawlers constitutes less than 20% of Bangladesh's total catch. Most shrimp is caught by artisanal methods or is produced by farming, and is landed at a large number of widely scattered landing places and farm sites. The quantities caught by individual fishermen are often very small.
From the landing places, shrimp is transported to collection centres and held there until a sufficient quantity is available. It is then transported by water, road or rail to processing plants which are concentrated in and around Chittagong, Cox's Bazar, Khulna and Satkira. The shrimp is often not iced until it reaches the collection centres, but may be re-iced before reaching the processing plants, depending upon the time required for shipment. This varies greatly, but may be up to 60 hours.
Processing plants clean, process, grade, freeze and pack the shrimp which is then exported via Chittagong or Chalna. Shrimp processed in Khulna has to be shipped down the rivers in small reefer vessels to Chalna to be loaded into cargo vessels Iying offshore. The lack of a deep-water port at Khulna is a disadvantage to processors in that city, but their proximity to the sources of production places them at an advantage to processors in Chittagong. Indeed the increasing number of processing plants at Khulna has deprived Chittagong packers of much raw material which they formerly obtained from the Khulna area.
Plants buy most of their material through agents, who may in turn buy from subagents or traders dealing directly with the fishermen and farmers. Agents may finance sub-agents and may also give credit to the processing plants, receiving payment only after the processor has shipped to his overseas customer. The shrimp is usually decapitated before reaching the plant and grading is likely to be carried out each time the shrimp is sold, with increasing precision at each stage. Industry sources estimate that the fisherman or farmer receives 75-80% of the price paid by the processor. Except in some more remote areas, fishermen and farmers are thought to be well informed about prices the plants are paying (Aquatic Farms Ltd., 1986).
4.1.2 Shrimp from trawls
Almost all shrimp caught at sea is processed on board the trawlers and transferred directly to reefer vessels for export to Japan. Most of the shrimp trawling companies operate joint ventures with their Japanese customers and processing is carried out under Japanese supervision.
In 1983- 1984, there were 44 processing plants operating with a freezing capacity of 308 tonnes per 24 hours and cold storage capacity of 8,670 tonnes (Aquatic Farms Ltd., 1986). Shrimp accounted for most of the product processed, but frogs' legs and fish were also handled. Two of the plants belonged to Government corporations: BFDC and BSIFC.
The degree of capacity utilisation was very low - only 16% according to one source (Marr, 1985). Such overcapacity has not led to a curtailment of the building of new plants and there are now about 70 in existence. It has however caused intense competition for shrimp between packers, forcing up their buying prices, eroding profit margins and making it difficult for them to insist on good quality raw material. To make ends meet some processors lower the quality standards of the finished product by packing short weights, inaccurate counts and defective product. Another consequence of the overcapacity is that processors are trying to export cheaper types of seafood (e.g. hilsa) and in some cases are freezing fish for the domestic market, as discussed in Section 3.4.4.
Most processing plants are well designed, well constructed and adequately laid out. However, some improvements can be made, generally requiring only minor expenditure or a tightening of operating procedures, e.g. screening of doors and windows, wooden slats to ensure adequate air circulation between cartons and walls in cold stores, plastic strips across storage doors, lights recessed into the ceiling to prevent collection of dust, adequate foot baths and washing facilities.
Many plants have special areas set aside for peeling shrimp, but here facilities and practices are worse than in other areas of the plant.
A survey of 17 packers (Rapport Bangladesh Ltd., 1986) found that port facilities and shipping presented some problems. As regards port facilities, the following difficulties were reported: cranes not available in a timely manner, inadequate jetty facilities at Chalna, absence of cold storage and generator in port areas, absence of plug points for refrigerated containers and occasional labour troubles. Shipping presented more serious problems. Sixteen out of the 17 firms interviewed expressed serious concern about the shortage of reefer space and the inadequacy of refrigerated containers.
With shrimp caught by trawlers at sea there are virtually no handling or quality problems, given the speed with which it is processed and the high quality of supervision enforced by the Japanese buyers. This is not the case with farmed shrimp, where there are problems both prior to arrival at processing plants and during processing.
Pre-plant problems are by far the most serious. Ice is often insufficient and there is a general lack of hygiene. Shrimp is decapitated and sometimes peeled in agents' stores or peeling sheds before reaching the processing plants. These sheds are apparently not registered or under any form of control and, in most cases, conditions are quite inadequate: there is no fly screening, ice is rarely used, utensils and water are dirty, shrimp to be peeled is generally piled on a dirty floor and personal hygiene is non-existent.
For transportation, the shrimp is often packed under pressure, causing damage to the product. It is usually packed in bamboo baskets or in wooden boxes covered with jute cloths, all these materials being dirty and not capable of being thoroughly cleaned.
Deficiencies in the processing plants add to quality defects of incoming shrimp. Although processors have recognised the needs for high standards and have invested in high quality plants, standards of hygiene tend to be deficient. Cann (1985) quotes the following examples: incorrect dress of workers and non-use of protective clothing or headgear, lack of handwashing facilities and poor toilets, stacking of uniced shrimp directly on the factory floor and the use of child labour for shrimp
peeling as well as women (both sit bare-footed and dirty clothed amongst the products). Such practices stem from a 'genera! lack of knowledge among supervisory staff, there being few qualified people in these positions. There is clearly a need for training at this level.
Processing is sometimes hindered by external causes such as disruption of power supply and the shortage of imported supplies like bleaching powder and master carton bands.
Shrimp is exported chiefly in raw headless shell-on form. Some raw peeled shrimp, mostly of the smaller sizes, is also exported.
Shrimp is normally packed in 2 kg inner cartons, but some, especially that for the United States market, is packed in 5 lb cartons. The use of different carton sizes for different markets is a good policy, given that users such as retailers and restaurants find it a nuisance to have to handle non-standard packs. Headless shimp is usually finger packed for attractive presentation and, in order to ensure correct weights when thawed, processors put 2-3 oz overweight in each inner carton. For peeled shrimp, 8 oz overweight is normal.
The quality of inner cartons is poor. The board and waxing used are not of good quality and staples are required. Cartons should be designed so that staples are not required.
Inner cartons are packed in master cartons according to market requirements, usually 10 inner cartons per outer carton. Since the import of unprinted cartons has been banned, some problems have also been encountered with the domestically manufactured outer cartons. According to the 1986 survey (Rapport Bangladesh Ltd., 1986), 20-30% of the domestically made cartons were estimated to have been lost due to early breakage, requiring importers to re-pack the product.
It is almost impossible to estimate the financial losses to Bangladesh caused by questionable quality, because there is not a precise and measureable relationship between quality and price in international markets. An exporter who improves his quality will not immediately obtain higher prices. However he will gradually increase the confidence of his customers, reduce the risk of rejections and improve his longterm market opportunities. He may indeed be able to find new customers who would not previously handle his product.
Table 11: Prices of peeled and deveined shrimp IQF, ax-warehouse New York
US$ per lb
Source: Infofish Trade News, 2 March 1987
The price that an individual shipper can obtain for good quality product is also constrained by the reputation of the country and of Asian suppliers in general. At present peeled shrimp from Asia sells at lower prices than Mexican shrimp of this type, as the example in Table 11 shows.
For a country or for an entire region to improve its relative price level may require a sustained effort over a long period of time to improve quality, in order to change buyers' perceptions of particular origins.
In spite of difficulties in appraising Bangladesh's losses there is plenty of evidence of the harm done by poor quality shipments. Bangladesh shrimp was 'blocklisted' in the United States in 1979, i.e. every shipment of shrimp from Bangladesh was automatically detained until the importer could prove that it met United States requirements. Saudi Arabia and Italy have stopped buying from Bangladesh, and United Kingdom buyers rejected six full containers of peeled shrimp during the first 7 months of 1987 (approximate value £300,000).
The method used to overcome United States objections has not been to improve handling and transportation but to wash the shrimp repeatedly. Shrimp is washed during processing at least three times and sometimes five times, with one wash under pressure, using 50 parts per million of chlorine (compared to a recommended maximum of 10 ppm). Although this reduces the bacteria load, it causes a weight loss of at least 2%, makes the product unnaturally white and is believed to adversely affect taste. If it is assumed that 2% of Bangladesh's shrimp exports are lost through this form of processing, the resulting quantitative loss for 1985/86 would be approximately 280 tonnes worth US$ 2 million.
Some indication of qualitative loss incurred can be gained by comparing prices for sea-caught shrimp, sold through Japanese joint-ventures, and other shrimp of the same species sold to Japan. The difference is about US$ I per kg according to an informed source, which if applied over 50% of Bangladesh's entire exports for 1985-86 (this excludes sea-caught shrimp and freshwater shimp) suggests that Bangladesh was then loosing about US$ 7 million. However, for reasons stated above and in view of the special trading channels enjoyed by the joint-venture companies, it is not expected that such gains from quality improvement would arise immediately, but would materialise gradually as a result of the improved reputation of Bangladesh shrimp against competitors.
Qualitative losses of freshwater shrimp are probably less important than for marine shrimp. Bangladesh already has a good reputation compared to other supplying countries and the product is destined to price-conscious, but less quality-conscious, markets.
The record in international markets indicates that Bangladesh is already experiencing heavy losses and runs the risk of further exclusions/blocklisting, etc., in major markets. The risk is greater if an oversupply develops in the 1990s resulting from the development of aquaculture around the world. Under conditions of oversupply, importing countries are likely to apply stricter quality standards. For these reasons Bangladesh urgently needs to introduce improved quality control measures (see next section).
The situation described above has resulted in a series of missions by international experts and exhortations to establish an effective quality inspection and control service. DOF is responsible for this function through the Fish Inspection and Quality Control Service (IQCS) which issues certificates enabling processors to obtain export licences. It has two laboratories in Chittagong and Khulna, of which only the latter is presently operational. Where IQCS laboratories are not available, products are tested at Amin Agencies (in Chittagong), the Bangladesh Council for Scientific and
Industrial Research (BCSIR, in Dhaka,) and in private laboratories. Inspection consists mainly of microbiological analysis of end-products. Plant inspection is not presently carried out and IQCS has no responsibility for landing places, ice plants or peeling/decapitating establishments outside processing plants. There is also a lack of transport to enable inspections and sampling to be undertaken opportunely.
This system is not really effective, and the Service needs to be expanded in facilities, personnel, training and budget. An international programme of technical assistance has been proposed by FAO. It is expected to be operational by January 1988.
Self-regulation by an industrial body has also been proposed as a means of achieving effective quality control in Bangladesh. In support of this proposal it has been noted that companies' attitudes have evolved greatly since United States blocklisting in 1979, and they are now acutely aware of the importance of quality. However, it may be objected that, in Bangladesh as elsewhere, industry will lack the unity of purpose to work a satisfactorily effective system, in view of which the Government must continue to take primary responsibility for this function. However, were self-regulation to be wholeheartedly supported by the private sector, it would be the better system to adopt.