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August 30, 2015 Drying Up Challenges for Burmese Fishermen FIRST RANGOON First Rangoon Corporation 148 A1 Street Rangoon, RGN 11061 Union of Burma FISHERIES IN BURMA

FISHERIES IN BURMA RANGOONIn the north, the Hengduan Shan Mountains form the border with China. Mount Hkakabo Razi, located in the Kachin State, is at an elevation of 5,881m and is

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Page 1: FISHERIES IN BURMA RANGOONIn the north, the Hengduan Shan Mountains form the border with China. Mount Hkakabo Razi, located in the Kachin State, is at an elevation of 5,881m and is

August 30, 2015

Drying Up Challenges for Burmese Fishermen

FIRST

RANGOON

First Rangoon Corporation

148 A1 Street

Rangoon, RGN 11061

Union of Burma

FISHERIES IN BURMA

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Contents

EXECUTIVE SUMMARY ...................................................................................................... 3

COUNTRY PROFILE ............................................................................................................ 4

INDUSTRY INTRODUCTION ............................................................................................... 8

SPECIES TARGETED ........................................................................................................ 11

FISHERY INDUSTRY ......................................................................................................... 16

MARINE PRODUCT EXPORTS.......................................................................................... 30

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Executive Summary

Burma has maritime exclusive economic zone of 486,000km2, and substantial inland water resources. Fishing industry represents one of the most important export earning sector and employs around 3.3 million people. Wages are low, and basic fisherman earns around US$80 to US$120 per month, and those working in fish processing factories in rural areas earns as little as US$50 per month.

Volume of total catches for all sectors (aquaculture, inland and marine capture fisheries) amounted to 4.47 million metric tonnes in 2012, of which 2.3 million metric tonnes come from the marine capture. It should be noted that Burma’s maritime waters can sustain only around 1.8 million metric tonnes of catch annually.

Each year, Burma exports around 300,000 metric tons of fish, crabs, and prawns. In most recent year, these export amounted to $350 million. Most of Burmese exports are to Japan and China, and valued-added industries (canneries, cold chain storages) are in their very early stages of development and non-existent, although local businesses are aware of their need.

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Country Profile

Burma is the largest country in mainland Southeast Asia comprising a land area of over 676,552km2. The country has 51.5 million inhabitants.

Geography

Burma is bordered to the north by Tibet Autonomous Region of China; to the east by China, Laos, and Thailand; to the south by the Andaman Sea and the Bay of Bengal; and to the west by the Bay of Bengal, Bangladesh and India.

As a country, Burma slopes downward in elevation from the north to the south, and is naturally divided into “Upper Burma” and “Lower Burma”. The terrain is made up of central lowlands ringed by steep, rugged highlands; the central lowlands are historically known as “Ministerial Burma”.

In the north, the Hengduan Shan Mountains form the border with China. Mount Hkakabo Razi, located in the Kachin State, is at an elevation of 5,881m and is the highest point in Burma. Three of the mountain ranges, namely the Arakan Yoma, the Pegu Yoma, and the Shan Plateau, all exist within Burma and all of these ranges run south-wards from the Himalayas in the north.

These three mountain chains also divide Burma's three main river systems, which are the Irrawaddy, the Sanlween, and the Sittang rivers (see map). Burma's longest river, the Irrawaddy, is nearly 2,170km long, and it flows through the country and into the Gulf of Martaban. Fertile plains exist in the valleys between the mountain chains.

The Burmese coastline is about 2,280km long, with the continental shelf covering an area of approximately 230,000km2. The coastal zones of Burma can be subdivided into three main areas, namely Arakan Coast, Irrawaddy Delta and Tanintharyi Coast.

Meteorology

The country is located in the monsoon region of Asia. However, its climate is greatly modified by its geographic position and its topography. Most of Burma lies between the Tropic of Cancer and the Equator. The Tropic of Cancer divides the country into two regions: the tropical south that covers two-thirds of the country, and the sub-tropical and temperate north, which is the remaining one-third of Burma.

The climate of Burma is divided into three distinct seasons, namely cold and dry season (November to February), the hot and dry season (March to April) and wet season (May to October).

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The summer extends from March to mid-May. The highest temperatures during March and April in Ministerial Burma may exceed 43.3°C while in Northern Burma it is about 36.1°C and on the Shan Plateau between 29.4°C and 35°C. The rain falls from mid-May to the end of October. Annual average rainfall is less than 1,016mm in central Burma while the coastal regions of Arakan and Tanintharyi receive about 5,080mm of precipitation. The cold season runs from November to the end of February. Temperatures in hilly areas above 3,000 feet can drop below 0°C. Generally, Burma enjoys a tropical monsoon climate. However, climatic conditions differ widely from place to place due to widely differing topography.

Demographics

Population of Burma increased at the rate of 0.89 percent per annum between 2003 and 2014. The country exhibits one of the lowest population growth rates in the region. Thailand, China, and Vietnam also have population growth rates of less than one percent per annum, and population growth rate of Burma can be compared to that of Vietnam.

The country is divided into 15 States and Regions. Accordingly, the census results show that Rangoon Region has the largest population (7.36 million), followed by Irrawaddy (6.18 million), Mandalay (6.16 million), the Shan states (5.82 million), and Sagaing (5.32 million). These five States and Regions account for almost 60 percent of the total population of the country.

The population density of Burma is 76 persons per square kilometre (km2). The population density is lower than most other Asian countries but comparable to Cambodia and Malaysia. Rangoon region has the highest density (716 per km2). For every 100 persons in Burma, 70 persons live in rural areas and 30 persons live in urban areas.

Birth rates started to decline approximately 10 years ago. On the other hand, the size of the young working age population has been steadily increasing. This is evidence of an accelerated demographic transition and provides opportunities for a “demographic dividend” through reduced dependency ratios. The total and child dependency ratios are falling in Burma, while the aged dependency ratio and the ageing index are increasing.

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Economics

Burma is undergoing political and economic transitions. Its first general elections in 25 years are scheduled on November 8, 2015, and they are expected to be followed by the country’s first democratic handover of power since 1960. Negotiations continue with armed ethnic groups to reach a final ceasefire agreement before the elections.

Trade and financial liberalization has moved forward rapidly with the dismantling of trade barriers and the deregulation of previously state-controlled sectors. 2015 marks the entry of nine foreign banks and the operation of the Thilawa Special Economic Zone (SEZ), which should provide an initial platform for Burma’s export-oriented growth.

Burma remains the poorest country in Southeast Asia and its development indicators rank well below its peers in the region. The country’s GDP growth has accelerated since the beginning of market reforms, and in last three years, averaged around 7% to 8%. Growth is driven by manufacturing, construction, tourism, and natural gas sector, while agriculture and fisheries have slowed down.

Inflation reached 8 percent by May, and continued strengthening of US dollar in global market will cause Burmese currency kyat to further depreciate and inflation to further accelerate. Inflation is expected to rise to around 13 percent by 2016.

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Industry Introduction

Burma has a coastline of 2,280km, a marine water area of 486,000km2, and an inland water area of 124,280km2. Burma’s coastline can be divided into three regions:

• Arakan State (~740 km of coastline);

• Irrawaddy and Gulf of Mottama Region (~460 km of coastline); and

• Tanintharyi State (~1,200 km of coastline).

This fishing industry (including aquaculture) represents one of the most important export earning sector and generates (with livestock) 8% of Burma’s Gross Domestic Product (GDP).

The industry employees about 8,000,000 people (approximately 3,300,000 are active fishermen). As with many East, South, and South-east Asian countries, fish and other products are important for diet of the Burmese people. Fish is important in the food budget of households: nearly as much is spent on fish (14% of food expenditure) as on rice (19% of food expenditure). Per capita consumption of fish amounted to 55kg/year and constituted 60 to 70% of the total protein intake for the population.

1 Burma’s Sectoral GDP, 2015

Source: Government of Burma

Burma is reported to possess one of the highest levels of fish and seafood consumption of any country in the world, ranked 10th out of 178 nations, according to FAO. Consumption at 55

Farming21%

Livestocks and Fisheries

8%

Industrical and crafts22%

Electrical Power1%

Construction5%

Transport12%

Communication7%

Social welfare3%

Rent & Other services2%

Trading18%

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kg per capita exceeded that of any other Southeast Asian country other than Malaysia, around 20 kg per capita per year more than Cambodia, Vietnam and Philippines (the countries with the next highest levels of consumption in the region), and nearly three times the global average of 19 kg per capita.

Despite this huge importance, fisheries industry is run in traditional manner, as evident by the labor-intensive nature of Burmese fishery industry. Moreover, despite Burmese fish and marine products being highly demanded abroad, foreign investment into Burmese fisheries is virtually non-existent. The industry attracted less than $100 million in FDI since 2011.

Marine capture catches dominate Burma’s fisheries sector, and the sector is thus largely concentrated in coastal regions. Irrawaddy and Tannitharyi states make up 38% of total livestock and fishery production in 2014-15. Of around 3,500 inland fishing plot licenses issued, nearly 1,800 are in Irrawaddy state.

Aquaculture accounts for only around 20% of domestic fish consumption in Myanmar. This is a long way behind neighbouring Thailand and Bangladesh (about 80% and 55%, respectively); aquaculture already accounted for about 20% of the fish consumed in both these countries by the late 1980’s.

2 Livestock & Fishery Production by State, 2015

Source: Government of Burma

Regulatory Framework

Burmese fisheries are managed by the Ministry of Livestock, Fisheries and Rural Development, and more particularly by the

Irrawaddy

22%

Tannintharyi

16%

Pegu

11%

Rangoon

9%

Sagaing

9%

Magwe

7%

Others

26%

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Department of Fisheries, which has responsibility for both inland and marine fisheries.

The main objective of the Department of Fisheries is to develop and implement policies to promote sustainable fishing practices and ensure the preservation and conservation of living marine resources. The Department of Fisheries develops conservation efforts, promotes research and surveys on the current condition of marine resources in partnership with intergovernmental agencies, maintains statistics on fisheries, and supervises the fishery sector through delivery of licenses to national fishing vessels.

The Department of Fisheries enforces fisheries through a licensing system to limit entry into fisheries. Anybody who wishes to carry out fishing activities is required by law to have a fishery license. Fishing without a valid fishing license is an offence under the Marine Fisheries Act. It is normal for restrictions to be attached to a fishing license including for example, how, when and where a fishing activity can be carried out.

Burma's marine fishing industry consists of three distinct fishing zones namely, onshore, inshore and offshore. From 1994 – 1995, the Department of Fisheries regulated the onshore area as inshore fisheries of marine fisheries according to the Marine Fisheries Law.

The inshore area starts from the low tide mark to 10 nautical miles from shore (9 to 19km offshore) in Irrawaddy Region. Fishing vessels in this category should not be equipped with an engine having more than 12 horsepower and length of the boat is limited to about 9.1m.

For offshore fishing management, the Department of Fisheries had divided the Burmese coast line into 140 fishing grounds of 30 x 30 nautical miles block (55km x 55km) by using latitude and longitude lines and designated four fishing areas, namely Arakan, Irrawaddy, Mon and Tanintharyi. The offshore zone is described as the area from the 15mwater depth out to the limit of the Economic Exclusion Zone (EEZ). Boats operating in this fishery would normally have an engine of more than 12 horsepower, and can use bottom trawl, purse seine, surrounding nets, drift nets and long lines.

The inshore fishing zone operates close to the coast, in waters less than 40m depth. It is small scale and mostly artisanal with limited technology and equipment to process fisheries resources information (such as Global Positioning System (GPS) or satellite devices). In 2011-12, there were approximately 2,050 offshore vessels and 27,751 inshore vessels (this figure decreased from 29,371 in 2010-2011) registered with the Department of Fisheries across Burma, half

2,050 Number of Offshore Fishing

Vessels in Burma

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of which were non-motorised boats, and 1,600 were trawlers, according to Bay of Bengal LME Project (2012). A further, 31,101 fishing nets were registered with the Department of Fisheries.

Burma is member of several inter-governmental organizations specializing in fisheries management at the regional scale. These organizations include the Southeast Asian Fisheries Development Centre, the Asia-Pacific Fisheries Commission, and the Bay of Bengal LME Programme. In order to develop knowledge on the state of marine resources and fisheries, these organisations have conducted several surveys in Burmese waters under the leadership of the Food and Agriculture Organization. Fishing is banned in coastal areas for three months during the rainy season under Government directives. Fishing is these areas in banned for the conservation of species, including and coincides with the spawning season of fish. However, this ban is not enforced and subsistence fishing continues.

Access to credit

Access to credit is limited in fisheries industry in Burma. Although a bank dedicated to fisheries exist, its impact is minimal. The Myanmar Livestock and Fisheries Development Bank (MLFDB) – currently renamed as Global Treasure Bank -- provides credit at low rates of interest (13% per annum) to the sector, but its loans are limited to farmers with more than 50 acres of ponds.

Aquaculture farmers ranked Burmese banks as the least important source of credit after fish traders, informal moneylenders, relatives, and feed traders. Large fish traders based at San Pya wholesale market provide loans informally and are a major source of credit in the sector.

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Species Targeted

Surveys have provided data that allows for some estimates to be developed on the levels of fish biomass in Burma although the estimates vary significantly.

According to the Institute of Marine Resources, fish stocks range between 1.3 and 1.8 million metric tonnes per year, this being an upper limit of one million metric tonnes of pelagic fish, and 0.8 million metric tonnes for demersal fish.

However, other studies suggest that the maximum sustainable yield of Burma’s fisheries is ~1.05 million metric tonnes per year (0.5 million metric tonnes of pelagic fish and 0.55 million metric tonnes of demersal fish). There are significant differences in these stock assessments.

Neither local Department of Fisheries nor international regulatory and academic institutions has recent and reliable data on the extent of marine resource stocks, and the current size and composition of marine catches.

Offshore Species

Fisheries resources beyond the immediate coastal areas, in the EEZ are the only remaining fisheries not just in Burma but in the region that are not heavily exploited. No recent and reliable assessment exists of these resources and the understanding of the potential that exists is inadequate.

The Department of Fisheries identifies three main tuna fishing grounds. Fishing grounds for other species have not been officially identified by the department.

Studies have identified a number of commercially important species as having a high potential for the development of offshore fisheries. These species are mainly pelagic fishes, including Swordfish (Xiphias gladius), Yellowfin Tuna (Thunnus albacares), Striped Marlin (Tetrapturus audax) and Sailfish (Istiophorus platypus). A number of by-catch species caught included Bigeye Thresher (Alopias pelagicus), White-tipped Shark (Carcharhinus longimanus), Escolar (Lepidocybium flavobrunneum), Pelagic Stingray (Dasyatis spp.), Common Dolphinfish (Coryphaena bipinnulata) and Snake Mackerel (Gympylus surpens).

Targeted shark fishing is illegal in Burma and two shark protected areas were established in 2004 by Department of Fisheries (Order no. 2/2004) and they are in the southern waters of Burma. An experimental fishery for Deep Sea Lobster was conducted in 200m in southern Burmese waters ten years ago, although full scale commercial activities for this species have not been developed.

1.8 M Upper Limit of Fish Stocks

Production in Burma

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Swordfish is an oceanic species, but sometimes found in coastal waters. For the Indian Ocean, an ASPIC (A Stock Production Model Incorporating Covariates) model showed a decline in total biomass of 57.8% over the last three generation lengths (20 years). The model’s results indicate that overfishing is not presently occurring and that the stock is considered to be under adequate management.

Yellowfin Tuna is a fast-growing, widely distributed and highly productive species. The species is important in commercial fisheries around the world. The Yellowfin Tuna stock assessment work in the Indian Ocean is an extremely difficult task because of the conflicting trends in the basic data, total yearly catches and abundance indices used based on the longline catch per unit effort. The catches of Yellowfin Tuna show a strong seasonality with high catches during the northern winter months and usually low catches from May–June to September–October. A recent assessment indicated that fishing mortality are at an historical high level and the stock has experienced a period of overfishing at least during 2003–2006.

Onshore and Inshore Species

The commercially important inshore pelagic species include 28 species of Carangidae; 15 species of Clupeidae; twelve species of Scombridae; and twelve species of Engraulidae.

First Rangoon has taken various surveys to identify the main species targeted and caught by inshore fishers. The following table lists species targeted by artisanal and commercial fishers in the delta region:

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Common Name Burmese Name Scientific Name

Hilsa Shad Nge Tha Laught Tenvalosa elisha

Goldstripe Sardinella Nga Kon Nyo Sardinella melanura

Giant Trevally Nga Ohn Caranx ignobilis

Indian Anchovy Nga Ni Tu Stolephoros indicus

Giant Sea Catfish

Nga Yaung Arius thalassinus

Indo -Pacific King Mackerel

Nga Kon Shat Scomberomorus guttatus

Orange -Spotted Grouper

Kyauk Nga Epinephelus coioides

Silver Pomfret Nga Mole Pyu Pampus argenteus

Kuria Labeo Nga Dain Labeo gonius

Dwarf Conch Mga Mouna Ma Bagarius spp.

Story Emperor Nga Wet Set Lethrinus spp.

John’s Snapper Nga Pa Ni Lutjanus johnii

Giant Seabass Ka Tha Paung Lates calcarifer

Hilsa Shad is a species of fish in the herring family Clupeidae. It is an anadromous fish and can live in freshwater; brackish; marine systems up to a depth of 200m. It is commonly found in rivers and estuaries in South and South-east Asia. The species filter feeds on plankton and benthic material. The fish schools in coastal waters and ascends up rivers to spawn during the South-west Monsoon (June to September) and also in January to March.

Goldstripe Sardinella is native to shallow tropical waters of the western Indo-Pacific. It is an important commercial fish, and is eaten dried, salted, boiled, or made into fish balls. Dried Sardinella gibbosa is a favourite in Korean markets. These fish are advertised as dried herring in Korea, England, Sweden and Canada. Goldstripe Sardinella is an extremely important species to the local artisanal fishers, who also washed, steamed, sun dried, and packed the fish. It is one of two main target species fished in the inshore zone during January through to April each year.

Giant Trevally is a species of large marine fish classified in the jack family, Carangidae. The Giant Trevally is distributed

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throughout the tropical waters of the Indo-Pacific region, with a range stretching from South Africa in the west to Hawaii in the east, including Japan in the north and Australia in the south. It is the largest fish in the genus Caranx.

Indian Anchovy is a schooling species of fish occurring in coastal and estuarine waters. It grows up to 15cm in length and forms large schools. It is an important commercial fish, and is eaten dried, salted. The Indian Anchovy, like the Goldstripe Sardinella, is an extremely important species to the local artisanal fishers. It is the second of two main target species fished inshore during October through to February each year.

Giant Sea Catfish is a saltwater fish species in the sea catfish family (family Ariidae) of the order Siluriformes (catfish). The species is a native to coastal and brackish waters of Thailand and Burma but can occasionally ascend into fresh water where water temperatures range between from 26-29°C. The species mainly feeds on crabs, prawns, mantis shrimps (Squilla species) but also on fishes and molluscs. It is a commercially important for food consumption and is mostly marketed fresh but sometimes dried.

Indo-Pacific King Mackerel is a pelagic migratory fish inhabiting coastal waters at depths between 15-200m; sometimes entering turbid estuarine waters. It is often found in small schools targeting small schooling fishes (especially sardines and anchovies), squids and crustaceans. The fishing peaks in the months of November through March. The species is usually caught with midwater trawls, gillnet, purse seines, bamboo stake traps, and by trolling. This species is widespread, and is targeted in commercial and artisanal fisheries throughout its range. Reported catch landings in the Indian Ocean have increased over the past 50 years to an average of 31,000 tonnes in 2003–2007. The species is marketed mainly fresh; also dried-salted, smoked and frozen.

Orange-spotted Grouper , also known as the Estuary Cod, is a species of fish in the Serranidae family. It is found in the western Pacific, the Indian Ocean, and the Red Sea. For such a significant commercial species, little is known of its biology or catch rates. The species is currently listed as Near Threatened but it is unlikely to become extinct as hatcheries in a number of countries are now able to produce fry from captive brood stock.

Silver Pomfret often called either the Silver or White Pomfret, is a species of butterfish that lives in inshore coastal waters off the Middle East, South Asia, and Southeast Asia. Due to overfishing, specimens weighing less than 1kg are more commonly seen. This fish is prized in the Indo-Pacific region for its taste. As an example, it is called zubaidi in Arabic, which is derived from the word zubdah, which means butter, due to its tender flesh.

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Kuria labeo is a species of fish in the carp family, Cyprinidae. It is native to the Bay of Bengal and surrounding waters and rivers including in Pakistan and Nepal. It is a freshwater fish usually found in rivers and it is sometimes seen in paddy fields. It spawns during the monsoon around July and August. The fish is often used in aquaculture since it is relatively easy to breed and grow out.

John’s Snapper , a member of the Lutjanid family, is widely distributed throughout the Indo-West Pacific, inhabiting tropical inshore waters from East Africa to Fiji and northern Australia to just south of Japan. This species is known by a number of common names such as Fingermark, John’s Snapper or Spotted-scale Sea Perch.

Giant Sea Bass is a diadromous fish, inhabiting rivers before returning to the estuaries to spawn. The species is found in coastal waters, estuaries and lagoons. Their bodies can reach up over 1.2m long, with a maximum weight is about 60kg. At the start of the monsoon, males migrate downriver to meet females, which lay very large numbers of eggs (several millions each).

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Fishery Industry

Burma is an important contributor to the regional fishery sector. In terms of volume, total catches for all sectors (aquaculture, inland and marine capture fisheries) amounted to 4.47 million metric tonnes in 2012.

Among these, inland waters fisheries accounted for 1.2 million metric tonnes and aquaculture for 0.89 million metric tonnes. Area dedicated to aquaculture in Burma is 450,000 acres, half of which are fish ponds and the remaining half shrimp ponds. They together produce 0.85 million metric tons of fish and 56,000 metric tons of shrimps and prawns.

According to the government, area dedicated to aquaculture has barely changed in last five years. However, pond inventory censuses taken using satellite data from the past ten years showed rapid expansion - approximately a doubling of area - in clusters of pond farms all around the Delta. For example, in the largest cluster, on “Nyaungdon Island”, pond area grew from 9,700 acres to 34,000 acres (a 3.5 times increase) in last decade.

The marine capture fisheries (inshore and onshore) represented half of the total production, with 2.3 million metric tonnes of catch in 2012, an increase of 7.5% from the previous year, and from 121% between 2003 and 2012.

3 Total Aquaculture Acreage, 2011-15

Source: Government of Burma

-

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

500,000

2011-12 2012-13 2013-14 2014-15

Ac

res

Fish Breeding Ponds Shrimp Breeding Ponds Crab Breeding Ponds

4.5 m Tonnage of total catches in

Burma in 2012

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4 Quantity and Share of Burmese fisheries production by source

In ‘000 tons 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Freshwater capture (fish) 454 504 631 718 815 899 1002 1163 1247 1303

Marine capture (fish) 1110 1206 1345 1486 1644 1828 2017 2123 2283 2431

Marine capture (shrimp) 21 20 28 30 33 37 41 43 47 49

Marine capture (total) 1131 1227 1374 1516 1677 1865 2058 2166 2329 2480

Aquaculture (fish) 371 437 526 556 626 705 777 764 831 874

Aquaculture (shrimp) 30 49 49 48 48 46 46 51 53 52

Aquaculture (total) 400 485 575 605 675 751 823 815 883 926

Total fisheries production 1985 2216 2580 2838 3166 3515 3883 4145 4459 4709

Share of production (%)

Freshwater capture 22.9 22.7 24.5 25.3 25.7 25.6 25.8 28.1 28 27.7

Marine capture 57 55.4 53.2 53.4 53 53.1 53 52.3 52.2 52.7

Aquaculture 20.2 21.9 22.3 21.3 21.3 21.4 21.2 19.7 19.8 19.7

Shrimp (marine capture) 1.9 1.7 2.1 2 2 2 2 2 2 2

Shrimp (aquaculture) 7.4 10 8.5 8 7.2 6.1 5.6 6.3 6 5.6

Source: FAO; First Rangoon

The government of Burma is hoping to increase total catches for all sectors to 5 million metric tonnes by 2015 and 5.5 million metric tonnes by 2016. However, the government doesn’t specify from which segments these increases will come, and the general composition of the marine catches landed in the country is also not recorded precisely.

The main wholesale fish markets are located in Rangoon, namely the Sanpya Fish Market, Pazuntaung Naungdan Fish Market and Annawa Fish Market, with a number of local markets being located in the states and regions. Other major landing sites are found along the coast.

There are buying centres near most fishing villages, which are linked to big local cities, which then send fish to Rangoon by road. It was reported that highly valuable species such as lobster are sometimes transported to Rangoon by air from Arakan or Tannitharyi states. In addition, some large vessels send catches to Rangoon via boat; however this was reported to be more costly.

Depending upon the quality of the fish, it is either processed for animal feed (lowest quality), salted, iced (best quality) or dried. The lack of access to ice in certain areas was reported to be primary reason for drying of the fish. Some fisherman apparently dry their fish whilst at sea on the vessel itself.

Drying of fish is reserved for certain species like anchovies and squid or as a fall back option, if the market price for fish is too low or the catch could not be sold. The demand for the fresh and

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most valuable fish comes primarily from village buying centres. Dried fish is stored for longer periods and some is sent to Rangoon depending upon the price. Some of the fish sellers also reported that they store large quantities of dried fish and then sell it, when the prices are high. With increased mobile connectivity, access to market rates in different parts of the country has become easier.

Different forms of income sharing arrangements were reported in the villages, with boat owner taking a 40 – 50 percent of share (excluding or including the trip cost), while the rest is divided among the boat workers. It was also suggested during the consultations in the villages that the income sharing mechanism depends on a variety of factors including but not limited to, type and quantity of the catch and the fishing season, and the availability of capital with the boat owners. Generally monthly payment for the boat workers was reported to range from 80 USD to 120 USD with payment usually made at the end of the month.

However, discussion around such income sharing mechanisms and income levels generally were limited and there is insufficient information to draw a general picture.

There is clear division of labour along gender lines for fishing. Men are responsible for fishing, whilst women are involved in the processing, and marketing of the fish. Women are mostly engaged in processing (salting, cleaning), drying and selling of fish in local markets. They usually earn 50 USD per month; this amount may, however, vary depending upon the fish catch, and sharing of profits based on fish catch also happens in some cases. Sometimes wives of boat workers are engaged in net repair (paid or otherwise considered to be part of monthly wages for the boat workers) although major boat repair and net repair work is usually done by men.

A total of 116 fishery processing factories with cold storage are registered in Burma and most of them export fish to the Chinese and Japanese market. Only around 20 or so factories are accredited to export to the European market. There are only two factories that process soft-shell crabs. A recent project from the United Nations Industrial Development Organization will help upgrade eight other factories, increasing their standards to allow exports to these high profitability markets.

Exports to non-Asian markets remain limited, but with the easing of sanctions, exports to Australia, Britain, and the United States have resumed. To these countries, the main exports are frozen prawns, crabs, and other crustaceans.

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5 Total Catches, 2012

Source: Government of Burma

Artisanal Fishers

Artisanal fishermen use active fishing techniques during the dry season. When weather conditions are good enough to allow fishing far away from the coast, they can venture out to the offshore area. They target grouper, sea bass and mackerel, and their fishing trips can last more than one week.

During the rainy season, the offshore area is less accessible because it is more dangerous, limiting the fishing grounds to the inshore fishery zone. Fishermen tend to use more passive fishing gear during the rainy season, such as stow nets, drift nets and gill nets, targeting shrimps, mud crabs or fish such as mullets or Giant Sea Bass.

The most important and intensive fishing activity is from October through to early April each year. The highest income months are from December through to March. During the monsoon season of June through to August, there is almost no fishing activity.

The use of wooden, motorised fishing boats is dominant. All boats are crewed by three or more people, generally including the boat owner and family members, with less reliance on employees. Fishing trips generally do not extend for more than one day or night, with an average of six catches per week.

Various types of fishing gear are used to exploit the large diversity of marine species found in Burma waters. Ocean purse seine and gill nets are the most common inshore fishing methods.

Aquaculture

19%

Aquaculture,

Prawns

1%

Onshore

Fishing Plots

6%

Freshwater

Catches

22%Inshore

19%

Offshore

33%

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In coastal villages, most households are either fully or partially dependent on fishing. Fishing forms part of multiple livelihoods adopted by local communities that include agriculture, casual labour and trade. The level of dependency on fishing varies by village and household, but a recent survey of 6,700 households in coastal Irrawaddy found that 38 percent are dependent on fisheries for both income and subsistence.

Aquaculture

Myanmar’s inland water bodies consist of 8.2 million hectares of lakes, rivers and reservoirs. Aquaculture currently employs around 130,000 people, and the European Union has pledged 20 million euros to support Burmese aquaculture production, and raising hygiene standards.

Inland (freshwater) fish farming is responsible for 95% of Myanmar’s reported aquaculture, and 90% of Myanmar’s aquaculture takes place at inland fish ponds in the Delta. Fish farming also generates a lot of employment – about twice as much per acre as paddy farming.

During the monsoon season from May to September, inundated flooded plain are breeding and nursery grounds for freshwater fishes. At this time of year, Department of Fisheries stock fish seed and brood-stock in natural and man-made water bodies to enhance and sustain commercially important species.

The country is not using the best approaches to aquaculture and could learn from the experiences of other nations, and this puts Burmese aquaculture in a good position for rapid improvement. Fish feed needs to be better and more varied, such as a solid high quality protein base (such as US SBM), which can improve aquaculture production.

Improvements to aquaculture are crucial because studies have found that on average, as household income climbs, farmed-fish consumption grows as a share of fish consumption, and consumption of capture-fish from rivers, lakes and the sea decline.

A single type of fish - the indigenous carp, rohu - constitutes roughly 70% of all farmed fish. Rohu (nga myit chin; Labeo rohita) also used for export markets, but has a small international market and low margins. Three potentially lucrative species to farm are tilapia, sea bass, and pangasius catfish, but they are only produced in small quantities. These three species have a lot of potential due to the relative ease that these species can be produced and marketed.

Fish farmers are beginning switch to freshwater tilapia to boost farm yields. Rohu takes two years to grow, but tilapia takes less

70% of all farmed fish is rohu

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time (six months) to reach maturity. Transitioning to tilapia will require new technologies and methods, as locals have limited success so far in tilapia culture.

However, transitioning to tilapia species is also expensive as it will require importing young fish and raising them locally. Young rohu fish can be bought locally at a cheaper cost.

6 Inland aquaculture production by quantity, area and yield

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Production ('000 t) 485.2 574.9 616.4 687.7 775.3 858.8 830.5 899 929.4 964.3

Production growth

rate (%)

21% 19% 7% 12% 13% 11% -3% 8% 3% 4%

Pond area ('000

acres)

182.5 197.2 212.2 215.4 215.9 217.8 218.7 220.1 221.4 222

Area growth rate

(%)

17% 8% 8% 2% 0% 1% 0% 1% 1% 0%

Yield (t/ha) 6.6 7.2 7.2 7.9 8.9 9.7 9.4 10.1 10.4 10.7

Yield growth rate

(%)

3% 10% 0% 10% 12% 10% -4% 8% 3% 4%

Source: FAO; First Rangoon

Myanmar’s farmed fish exports are dominated by rohu, along with two other ‘Indian major carp’ species; mrigal (nga gyin; Cirrhinus cirrhosis) and catla (nga gaung pwa; Catla catla). Although widely consumed throughout their native range in South Asia and Myanmar, these fish are of limited popularity in other regions. Myanmar’s main trading partners for these fish are thus countries in which there are large expatriate populations of people of South Asian origin, most importantly in the Middle East.

Yields are low, and average around 3.7 tonnes per hectare. In Andhra Pradesh, India – a place which most closely resembles Burma in terms of fish species, and farming techniques deployed -- average yields are 9 tonnes per hectare. This is partly due to inefficient techniques and partly due to low stocking density (the number of fish stocked per unit area).

Hatcheries

The first hatcheries in Myanmar were established by the Department of Fisheries (DOF) during the mid-1970s. The technical knowledge required to do so originated with trainings received by DOF staff in India. The earliest fish farmers in Kayan, to the east of Yangon (who were already raising wild fish in enclosed deep water rice fields) began to purchase seed

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produced at DOF stations close to Yangon. The first private hatchery was established in Kayan around 1985, through collaboration between a fish farmer from the area and a DOF officer. Members of the extended family of the first hatchery operator subsequently established hatcheries of their own in the area, leading to the development of Myanmar’s first hatchery cluster in Kayan.

Myanmar’s second hatchery cluster developed in Twantay after 1990, when the owner of a large farm began to produce seed on an experimental basis, also using knowledge acquired from staff at a local DOF station. In 1995, another large pond farmer in Twantay successfully established a hatchery with the support of a senior DOF official. Similar informal consultancies and partnerships, facilitating the transfer of technical knowledge between government technicians and entrepreneurial farmers, have also been an important feature of the early stages of development of commercial hatchery sectors in Vietnam, Thailand and India.

The number of commercial hatcheries has grown steadily. Many were established by, in partnership with, or with support from, technicians who learned their trade in early hatcheries in Kayan and elsewhere. At present, there are five hatcheries in Kayan, along with similar numbers in Twantay, and in Latkyargyi village tract in Maubin (a hatchery cluster that emerged after 2000). Individual hatcheries are also found in almost all locations with large concentrations of ponds in Yangon, Ayeyarwady and Bago regions.

Some hatcheries operate as standalone businesses, while others have been established by the operators of large growout farms primarily for the purpose of providing seed for own use, with the excess sold commercially. Some large farms operate hatcheries exclusively for their own use. This may explain what appears to be a rather low total number of commercial hatcheries (i.e. those producing primarily for sale) relative to the size of the farm sector.

DOF operates a total of 27 fish hatcheries nationally, with at least one facility located in most states and regions. Their total combined fingerlings production amounted to 575 million in 2014-15 – down from the peak of around 790 million achieved annually in 2010-13 period. DOF’s production is focused on only two species: mrigal (ngagyin) and common carp (shwewa ngagyin), with mrigal making up 90% of total production.

3.7 Tonnes per hectare of yield

in aquaculture farms

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Most of DOF’s production is used for stocking natural waterbodies to enhance open water fisheries. Government hatcheries thus make a limited contribution to seed supply for aquaculture in the delta area, which is well served by private seed producers. This pattern is similar that found in other countries in the region, where the private sector overwhelmingly dominates fish seed supply for aquaculture.

Main species produced by hatcheries in Myanmar are Indian major carps (rohu, catla and mrigal), pangasius catfish (nga dan; Pangasianodon hypophthalmus), and pacu (nga mote; Colossoma brachypomum). Hatcheries experience difficulty in producing mrigal seed, and it is estimated that 80% of the mrigal juveniles used in aquaculture are of wild origin, captured from the Ayeyarwady river system several days after hatching.

Fish hatchery production runs for approximately four months from May to August, during early and mid-monsoon. There are two main hatchery technologies used in Myanmar. The most widespread is the traditional ‘hapa-based’ system, in which brood (parent fish) that have been primed for reproduction by hormone injection are placed in hapas (fine mesh enclosures)

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in ponds at a ratio of two males to one female. The fish spawn in the hapas, and fertilized eggs are removed and placed in other hapas in the pond until they hatch.

In the more advanced system, which is adopted by only a small number of hatcheries, brood fish are manually stripped of eggs and milt following hormone injection, and these are mixed by hand, before placing in funnel shaped incubator nets suspended in concrete tanks for hatching. Designs similar to the latter are the norm in carp and pangasius hatcheries throughout much of Asia.

Both types of hatchery are effective in producing seed, but the former appears more land and labor intensive, while the latter is more capital intensive, and can produce a greater number of hatchlings (newly hatched fish) per unit area.

Most hatcheries employ four to eight permanent staff (usually paid around $100/month). Depending on the size of the hatchery, as many as 30 part-time workers are hired on a daily basis during peak production season, mainly for harvesting and packing hatchlings.

Hatcheries produce anywhere between 30 million and 700 million hatchlings per year depending on the size of the hatchery and Rohu fingerlings sold for approximately $3 per 100,000 during middle of the 2015 production season.

Nurseries

Most hatchlings produced in commercial hatcheries, are sold directly to nurseries in the surrounding area, or to large grow-out farms with the capacity to complete the entire nursery cycle. Commercial nurseries (aquaculture enterprises specialized in rearing hatchery produced seed to ‘fingerling’ size, for sale to grow-out farms) are universally present around hatcheries.

Most sales of hatchlings do not involve an intermediary: buyers collect them from the hatchery and transport them to the point of use in oxygenated water-filled plastic bags. By contrast, sales of fingerlings are usually mediated through traders.

Rapid growth has been observed in the number of nurseries in Burma. There are several reasons for this growth: 1) Nurseries are potentially more profitable than alternative forms of agriculture, generating an estimated 5-10 times more income than mangoes or paddy; 2) nurseries have a more rapid production cycle and revenue turnover than alternative types of agriculture or aquaculture, and it is possible to make a return within as little as two months; 3) production is less risky than for alternative types of agriculture/aquaculture: it was reportedly rare to ever lose money when nursing; 4) there has been an

27 hatcheries are operated by

the government

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increase in demand for fingerlings due to growth in the area of grow-out ponds, and the market price of fingerlings is currently high; 5) there has been an increase in fingerling demand due to changing production technologies, and grow-out farmers now have a preference for stocking larger fingerlings. Although most commercial grow-out farms incorporate nursery ponds for nursing seed to larger sizes, they require small fingerlings as inputs, in addition to which, most large farms cannot produce sufficient numbers of large fingerlings to meet their own needs; 6) the investment requirement to establish and operate a nursery is much lower than that for grow-out ponds, making it relatively easy to enter production; 7) many banana and mango orchards destroyed during Cyclone Nargis in 2008 were replaced with nurseries rather than by replanting.

Most commercial nurseries range from 1-5 acres in size (although nurseries in Kayan tend to be somewhat larger). Having lower investment costs and much more rapid rates of turnover than growout farms, nurseries serve as an entry point into aquaculture for rural households who lack the capacity to invest in food fish production.

Commercial grow-out farms buy fingerlings from nurseries, typically sized between 1-6 inches, and nurse them for several months before stocking in grow-out ponds at large sizes (6-12 inches). The typical areal ratio of nursery ponds to growout ponds on farm was reported to be 1:5.

Fish Feed Production

Feed accounts for the majority of variable costs in inland fisheries. The main feeds used in aquaculture in Myanmar are by-products from agro-processing, such as rice-bran (a by-product of rice milling, obtained by polishing grains to produce white rice), and peanut oilcake (a residue derived from milling peanuts to produce edible oil). Other by-products are used in smaller quantities include: sesame, sunflower and other oilcakes, wheat bran, broken rice, processing wastes from pulses and cassava, and waste from breweries and noodle factories.

Paddy production in Myanmar is around 20 million tons – creating around 1.5 to 2 million tons of rice bran. Figures from the Ministry of Livestock and Fisheries cited in 2009 indicate that aquaculture accounts for 73% of national annual demand for rice bran (1.4 million tonnes) and 47% of national demand for oilcakes (600,000 tonnes).

Use of agro-processing byproducts as feed create efficiencies, but in the future, commercially manufactured pelleted feeds will be better choice for fishery businesses in Burma, as pellets are

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formulated to provide a nutritionally complete diet for the fish being farmed. The degree of penetration of manufactured feeds in Burma is considerably lower than in other Asian countries, including Bangladesh and India. Burmese pelleted aqua-feed production is thought be around 1000 tonnes per day.

Pelleted feed industry is dominated by a single local firm, Htoo Thit. Three other local private companies were confirmed as producing and distributing pelleted feeds, but their market shares appear rather small. Seventy percent of the feed produced by Htoo Thit is floating feed, and it is the only producer of floating feed in Burma. Feed that floats in water is used so that fish can be observed while they are feeding, making it impossible to overfeed the fish. However, floating feeds are more expensive.

Htoo Thit operates a quasi-contract farming system: farmers receive feed on credit, and are in turn required to sell their fish through the company’s wholesalers. Land use certificates are required as collateral for these loans.

Another two feed mills were identified as producing feeds exclusively for the use of the large vertically integrated farming operations. The Ministry of Livestock and Fisheries has three feed mills, but all were inactive.

Small size of feed industry can be compared with a more competitive poultry/livestock feed industry, where seven major companies, including foreign joint ventures, compete. Lack of co-development in fish and livestock feed manufacturing is unusual when compared to other regional peers.

Rice bran costs around cost $0.15-0.18/kg and peanut oilcake costs around $0.60-0.80/kg. Peanut oilcake has a much higher protein content than rice bran. The feed conversion ratio (FCR) of rice bran is 3.4, whereas the FCR of peanut oilcake is 2; floating feed, which cost approximately $0.62-0.64/kg, have an FCR of 1.6. [FCR is a ratio of the quantity of feed used during production to the quantity of fish harvested. For example, an FCR of 2 implies that 2kg of feed is required to produce 1kg of fish.]

Manufactured pelleted fish feeds in Myanmar are expensive. Prices for commercially manufactured floating feeds are between 10% and 30% higher in Myanmar than in other countries in the region.

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Fish Markets

The main wholesale fish markets are located in Rangoon, namely the Sanpya Fish Market, Pazuntaung Naungdan Fish Market and Annawa Fish Market, with a number of local markets being located in the states and regions.

San Pya, the largest fish wholesale market in Burma, is located on the Rangoon River. The market was established in 1991, and is administered by the Markets Department of the Yangon City Development Committee (YCDC). The market operates daily, from late night until mid-morning.

A second fish wholesale market, Shwe Padauk, opened in October 2014, further north than San Pya, also on the river. Shwe Padauk was privately constructed on land belonging to YCDC to partially replace San Pya market, which is located in a congested residential area. However, currently only a small fraction of the fish traded in Rangoon passes through Shwe Padauk.

Fishermen and farmers can sell fish in one of two ways: 1) through local collectors; and 2) directly to traders at main fish markets. There are buying centres near most fishing villages, which are linked to big local cities, which then send fish to Rangoon by road. Large traders in Rangoon will only arrange collection of fish from fishermen and farms only if the quantity harvested exceeds 10,000 viss (16 tonnes or approximately the capacity of a small collecting boat).

It was reported that highly valuable species such as lobster are sometimes transported to Rangoon by air from Arakan or Tannitharyi states. In addition, some large vessels send catches to Rangoon via boat; however this was reported to be more costly.

Most of the fish traded through Yangon markets is sold through traders who pool fish from multiple sellers and arrange for collection by large traders from cities. Fish is packed in crushed ice in the hulls of collecting boats or in unrefrigerated trucks. Boats are the main form of transport account for as much as 80% of the volume of fish deliveries to San Pya.

Traders supply ice, deducting the costs from the sales price. Ice is sourced from ice plants located in Hlaing Tharyar industrial zone, or from plants in towns close to major aquaculture clusters. There are a total of 106 ice plants in Rangoon region and 15 businesses at San Pya that specialize in crushing ice blocks.

There are six riverside landing jetties at San Pya, five of which are owned by the five largest fish trading business at the market. The sixth is owned the son of a senior military figure and leased out to other operators. There is a single jetty for receiving

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aquaculture fish located at the newly established Shwe Padauk market, which is owned by the fish trading wing of the Htoo Thit fish feed company.

Marine capture fish primarily land at a cluster of seven jetties located slightly further north of San Pya and Shwe Padauk markets. This group of jetties is reported to serve 2000 marine fishing boats, and they are operated by companies established by groups of fishing boat owners. At least one jetty is owned by a fish exporting company. More than half the fish landed at these jetties is reported to be exported, particularly to China.

Unlike at San Pya, these marine capture market operate on a monthly tender basis, under which the buyer offering the highest price for a particular species at auction gains the right to buy an agreed quantity of that species over the course of the following month.

Three market buildings are San Pya house 142 licensed stalls and 310 licensed wholesalers. Of these, 152 specialized in trading aquaculture fish. Of these businesses approximately 60 are deemed “large” traders and 90 are considered “medium-sized” traders.

San Pya market trades between 100,000-200,000 tonnes of fish per annum. Shwe Padauk trades only a fraction of this – at around 63,000 tonnes during its first year of operation in 2014. Analysis of Shwe Padauk trades reveals that on average, 2.2 tonnes of marine capture fish, and 4.3 tonnes of aquaculture fish are traded through the market daily.

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Marine Product Exports

Each year, Burma exports around 300,000 metric tons of fish, crabs, and prawns. In most recent year, these export amounted to $350 million – significantly down from $570 million Burma received in 2012-13 from exporting roughly the same quantity of marine products.

Fisheries associations noted that fall in exports are caused by lack of fishing equipment, lack of capital, poor transportation and logistics, electricity supply, and inadequate financing.

7 Burma’s Marine Exports

Source: Central Statistical Organization

In 2015, strong dollar and falling kyat has made Burmese fish more attractive to international buyers, leading to a shortage in the domestic market and causing local prices for Rohu (a type of carp regularly exported) and tilapia to rise by around 10%.

0

100

200

300

400

500

600

2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15

in m

illio

n U

SD

0

50

100

150

200

250

300

350

2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15

in '0

00

to

ns

Fish Prawns Crab

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Burma trades her marine products with a diverse group of buyers across the world.

Border trades occur mainly for fresh or chilled products. Fresh or chilled crabs and crusteceans are exported to China, while fresh or chilled fish is exported to Thailand.

Japan and Hong Kong primarily imports frozen shrimps and prawns from Burma; Saudi Arabia imports both frozen and fresh fish, mainly species of Salmonidae, hilsa, tilapias, catfish, and carp.

Frozen fish is exported to Malaysia, United Kingdom, and United States; United States and Australia are important markets for frozen crabs.

Recently, it has been noted that dried shrimp producers in Kyauk-Phyu in the Arakan are exporting directly to neighboring Bangladesh as shipments to Rangoon has failed to earn enough money. As US dollar appreciated against the kyat, exports to Bangladesh have become more attractive.

Of the dried shrimp shipped to Rangoon, the “Cho Chauk” or “large and sweet” variety fetches only 20,000 kyats per viss (1.6 kilograms) compared to 30,000 kyats previously.

8 Marine Products Trading Partners, 2013

Source: First Rangoon Research

Japan

22%

China

16%

Saudi Arabia

11%

Malaysia

11%

Thailand

9%

United

Kingdom

7%

United States

5%

Hong Kong

5%

Australia

4%

Singapore

2%

Viet Nam

2%

Others

6%

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Cold Storage

There are numerous cold storage facilities located around Yangon, particularly in its industrial zones, where large wholesale traders and exporters rent space to store stock.

There is one cold storage facility located at San Pya, operated by a military-linked business group, which sources and freezes fish for processors and exporters. Many processors and some exporters have cold storage facilities integrated into their operations, and some businesses combine all three functions.

There were 77 seafood processing factories in Rangoon region in 2014 of which 57 were reported to process fish for human consumption (the remainder specializing mainly in processing shrimp or producing fish meal). Most fish exported undergo little, if any, value addition in these factories, with processing activities limited mainly to freezing and packing whole fish. A minor exception is the production of pangasius fillets, but only 333 tonnes of these were exported in 2012.

Two hundred and eighty nine companies are recorded as having exported fish and seafood products from Myanmar by sea in 2012, and 211 as having exported fish by overland border trade. The majority of these businesses were small, exporting less than 500 tonnes a year, with only four reported to have exported above 10,000 tonnes.

9 Seafood Factories by State, 2014

Source: First Rangoon Research

Yangon

68%

Tanintharyi

16%

Ayeyarwady

5% Mon

6%

Rakhine

4%

Shan

1%

114 seafood processing

factories in Burma

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Disclaimers While this study is conducted via quantitative and qualitative assessment of the industry, the industry players, fishing villages, and fishermen, we cannot guarantee that information gathered is representative of the general industry patterns. Various data gaps remain:

Fishing patterns cannot be extrapolated to give an exact description and quantitative indication of fishing activity. Data on fishing activity has been collected through qualitative approaches and in some cases information collected from one source was not corroborated by the data gathered in another;

Not all the information provided by community members could be verified and may be inaccurate (such as the depth or distance from shore); and there is a lack of consistent data around income derived from fishing and food security, and how these are affected by seasonal changes. While indications of income were provided by some of those consulted there was a reluctance to discuss income and it has not been possible to derive adequately robust estimates to provide a general picture of the income levels of those engaged in fishing.

This report is for information only and not intended to be and should not replace or be construed or be relied upon as investment, legal, tax or accounting advice or recommendation. Information on investment (if any) are purely factual and intended solely to provide an awareness of the business and economic environment in Burma, including to highlight any new market entrants and companies that directly or indirectly engage in business activities in Burma. The material is not intended to entice, solicit or act as a recommendation, and no investment, divestment or other financial decisions or actions should be based on the material. No representations or warranties are made as to the accuracy, correctness, reliability or completeness of the material or its contents. Neither First Rangoon, nor any of its affiliates, directors and employees, accept any liability relating to or resulting from the reliance upon or the use of all or parts of the materials.