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Assessment of the Commercial Seafood Chain in Lebanon Assessment of the Commercial Seafood Chain in Lebanon

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Assessment of the Commercial Seafood Chain in Lebanon Assessment of the Commercial Seafood Chain in Lebanon Assessment of the Commercial Seafood Chain in Lebanon Assessment of the Commercial Seafood Chain in Lebanon By Dario Pinello and Samir Majdalani 2018 TABLE OF CONTENTS Contents 3 Executive Summary 6 1 INTRODUCTION AND BACKGROUND 8 1.1 Study background 8 1.2 Introduction to seafood value-chain analysis 9 1.3 Structure of this report 9 2 METHODOLOGY 10 Stage 1: Planning 10 Stage 2: Data collection and data entry 14 Stage 3: Data analysis 15 3 OVERVIEW OF THE NATIONAL CONTEXT 16 3.1 National macro-economic context 16 3.2 Legal and institutional context 19 3.3 Fisheries administration 24 3.4 Description of the products 25 3.4.1 Marine capture production 25 Fishing practices/systems 28 Fish Markets 29 3.4.2 Marine aquaculture production 33 3.4.3 Inland aquaculture 33 3.4.4 Imported products 47 3.4.5 Exported products 59 4 RESULTS68 75 4.1 Large-scale value chain 75 4.1.1 Categories 75 4.1.2 Main findings 76 4.1.2.1 Description of activities 76 4.1.2.2 Employment 76 4.1.2.3 Cost structure analysis 78 4.1.2.4 Commercial Seafood Chain 80 4.1.2.5 Analysis of critical factors, challenges and opportunities 85 3 4.2 Medium-scale value chain 87 4.2.1 Categories 87 4.2.2 Main findings 89 4.2.2.1 Description of activities 89 4.2.2.2 Employment 90 4.2.2.3 Cost structure analysis 93 4.2.2.4 Commercial Seafood Chain 95 4.2.2.5 Analysis of critical factors, challenges and opportunities 102 4.3.1 Categories 105 4.3.1.1 Characteristics of the respondents 106 4.3.2 Main findings 107 4.3.2.1 Employment 107 4.3.2.3 Cost structure analysis 114 4.3.2.4 Commercial Seafood Chain 117 4.3.2.5 Analysis of critical factors 129 4.4 Key highlights 132 5 ANALYSIS OF CHALLENGES AND CRITICAL FACTORS IN SEAFOOD CHAIN 137 5.1 Factors and Challenges 137 5.2 Summary of factors and challenges per category 139 6. MAIN RECOMMENDATIONS FOR ACTIONS 140 Recommendations - Products 140 Recommendations – Market (trade) 141 Recommendations - People 142 APPENDICES 144 Appendix 1: References 146 Appendix 2: Study questionnaires 146 Large-scale questionnaire 155 Medium-scale questionnaire 164 Small-scale questionnaire 173 Appendix 3 – List of data collectors 174 Appendix 4 – Main sales period 175 Appendix 5 – Images from the markets 179 4 ACRONYMS DFW: Department of Fisheries & Wildlife-Ministry of Agriculture EEZ: Exclusive Economic Zone FAO: Food and Agriculture Organization of the United Nations MOA: Ministry of Agriculture CAS: Central Administration of Statistics - Lebanon HORECA: Hotel/Restaurant/Café IMF: International Monetary Fund FTE: Full Time Equivalent GDP: Gross Domestic Product USD: United States Dollar LL: Lebanese Pound The conversion factor utilised in the analysis was the following: US$ vs. LBP 1507.5 (Banque du Liban, 2017) http://bdl.gov.lb/tabs/index/6/289/Daily-Exchange-Rates.html All dollar amounts are U.S. Dollars unless otherwise indicated. All the monetary figures are without taxes unless otherwise specified. 5 Executive Summary A first ever mapping and analysis of the commercial seafood chain in Lebanon was conducted in 2017. This study was carried out to better understand the existing fisheries market in Lebanon in order to map the flows of products throughout the different stages of the commercial seafood chain. This allowed for the identification of critical factors, challenges, and opportunities to improve the efficiency of the chain in Lebanon. There was no essential structured information available on the populations of the entities involved in the seafood market in Lebanon. Thus, part of the study required the collection of this data. Field missions were conducted in order to make initial appraisal of the sector and to collect the necessary information to organize a structured survey that allowed for a complete assessment of the sector. The Lebanese seafood market is predominantly import dependant (90%) with around 35,000 tons imported annually. Export quantities are limited at less than 100 tons, and the local production is negligible, about 4 thousand tons from fisheries and 1,200 tons produced by inland aquaculture production. This makes the apparent market total about 40,000 tons and the consumption per capita equal to 8.9 Kg. The targets of the survey were the small-scale (Fishmongers and Street Vendors), medium-scale (Auctioneers, wholesalers, importers, and fishmongers/wholesalers) and the large-scale players (Importers, distributors, Branding-distributors, Chain supermarkets, Grocerant, and Processors). From the survey, the total estimated number of business entities ranged from 460 to 759, with the small-scale making up about 80 % of the total number. However, the small-scale represents only around 20% of the total volume sold. Sale volumes were dominated by the medium scale at 45% and the large-scale players at 35%. The figures for the total value of the sales, which ranged from LL182 Billion to LL268 Billion ($300 Million – $430 Million) while the employment, estimated in terms of Full Time Equivalent (FTE), ranged between 3.7 and 5.7 thousand people. The contribution to employment from the small-scale players was about 40% while for the medium it ranged between 25% and was 35% for the large scale. This indicates that all the three categories of players were important for the employment in the sector. The apparent distribution of the import and local production (fisheries and aquaculture) are matched to their main destinations within the Lebanese value chain. Large-scale players mainly receive imported products while, overall, very few exports are produced in Lebanon. Furthermore, the import market is controlled by a limited number of players, while, on the other hand, the local production was scattered with many individuals locally marketing the production. It is important to note that, for imports, the majority of the fish and fishery products come from aquaculture and demersal fisheries, particularly from Turkey (20%), Thailand (20%), Vietnam (14%), and Egypt (8%). For the imported species, seabream/seabass, tilapia, red mullet, and shrimps were the most important chilled species. Hake, Pangasius, shrimps, and tuna were the most prevalent imported frozen species. Aside from the local production of pelagic species, the remaining locally produced species are niche products with higher prices than the imported species. On the other hand, the starting 6 price for the imported species is low, but then the mark-up along the value-chain is generally higher. Between the importer-fishmonger the mark-up was about 15-20% and then about 30-0% between the fishmonger and the final purchase. For the price transmission in the value-chain, for the local production (about 10% of the total), the starting price would be higher, but then the mark-up is lower both between the auctioneer – wholesaler and the wholesaler- final purchaser. Eight critical factors were identified as the primary concerns. These were: (1) High prices; (2) Limited local production; (3) Product spoilage; (4) High energy costs; (5) Political, bureaucratic and logistical barriers; (6) Employment low levels of attractiveness; (7) Unregulated Street vendors ”Hungare”; and (8) Inadequate skills and facilities. Relative to the cost of living and with respect to the value of landings, in general, the average price per kilogram of local production was found to be relatively high compared to the European prices and this was a natural result of the highly unbalanced context of demand and supply, in which most of the demand is met by imports. The reasonable price and the resulting market domination of seabass and seabream would suggest that there might be room for some competition in the market from other species that would also be so well accepted by the consumers. Imports in the country are mostly controlled by a few players with very little competition. Improving the access and availability of import pathways for the medium-scale players through government initiatives would help to increase the number of players in the import pool and break-up the control currently held by a few large importers. A more consistent supply of local products, while retaining the good prices currently charged, would decrease the reliance on imported seafood and bring more diversity to the market. In the South, aquaculture products are perceived to be of lower quality; and thus, working with consumers on their perceptions could improve the market demand for aquaculture products The small-scale actors accounted for a key role in terms of provision of occupation and, in particular, the provision of work for the lowest skilled and lowest paid workers in the seafood chain. The main issues for the small-scale players appeared to be the informal nature of the work, the lack of training on proper handling and availability of processing facilities for the workers. A particular focus on formalizing workers in this category while providing training on hygiene and product handling would meet some of the outstanding training requirements for this category. All three categories had a similar trend in age structure for all workers with an average of 70% of the employees being over the age of 25. Women’s employment was generally limited and the reason stated in the interviews for this was; “the profession is not suitable for women since it is physically demanding”. Nevertheless, women were found in some of these operations, particularly in administrative, marketing and accounting departments although their salaries might be lower than men by 10 – 20 %. This report includes s a number of recommendations on action to be taken for better understanding of and support to the commercial seafood chain in Lebanon.
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