PUTRAJAYA is looking at the Japanese method of having fishermen auction their catch at the market themselves as one way of getting rid of middlemen and stabilising the price of fish.

One of the major reasons for the high price of fish is the middlemen and by doing away with them, fishermen can determine the price of their catch according to supply and demand, said Deputy Agriculture and Agro-based Industry Minister Sim Tze Tzin.

Sim said the proposal is being considered because a fisherman’s catch currently goes through three or four layers of middlemen before it reaches the market, resulting in drastically higher prices.

Kuala Lumpur Fish Wholesale Association president Sing Kian Hock, however, disagreed, saying there is only a single layer of middlemen before their catch reaches the market.

Different types of fish fetch different prices and they will only be profitable if sold at a higher price, Ling said.

“Our seafood include products from Tg Sepat, Seremban, Kuala Selangor and Malacca, but we can’t control what prices the products are retailed at after we sell off our stock.

“We wholesalers make less than 10% in profit when buying from fishermen. Ikan tenggiri (king mackerel), for example, sells for RM20 per kg, we only make RM2 from that.

“If someone else buys our stock and resells them to restaurants for a tidy profit, this is beyond our control,” Ling said.

The same applies for soft drink Coca-Cola as well, which retails for about RM2 per can, but hotels sell them at least RM4 per can, with five-star hotels charging even more, he said.

This showed that it is the market that determines prices and the high price of fish is not due to price-gouging from middlemen, he said.

“There’s a market price for seafood but when such food reaches restaurants or luxury hotels, then they can be up by 100% to 150%.

“If the market price for white pomfret (ikan bawal) is RM70 per kg, this goes up to RM200 per kg in restaurants. Customers will still pay for it, because this involves the overhead cost of the restaurant, design, service, etc.”

Ling said an investigation by the Agriculture and Agro-based Industry Ministry would be welcomed as his margins are less than 10% and he has the receipts to prove it.

There are also risks in the seafood wholesale business, such as the limited time they have to sell their stock, failing which the fish will go bad and have to be disposed of, Ling told The Malaysian Insight.

Ling said news of middlemen allegedly taking more than 10% for their cut of the profits circulating on social media is also beyond their control.

“On average, I buy between 800kg and 1,000kg of fish from fishermen a day. Say, if we earn RM15 in profit per kg as alleged, then we can make tens of millions in profit within three or four years. If so, why then do we need to risk our businesses like we do?”

Law of supply and demand

Hutan Melintang Seafood Producers’ Association president Lee Chu Soi said fishermen will usually send their catch to the market to be sold right after they dock their boats or traders would buy their catch straight from their boats, and there’s a minimal exchange of hands.

The price of seafood is determined by how much fishermen can catch and weather conditions, while it’s also a given that seafood sold in tourist destinations are usually more expensive, Lee said.

Sim’s statement could also be referring to small-scale fishermen who go out to sea daily and under such circumstances, it is not impossible for their catch to go through multiple layers of middlemen, he said.

“Generally, the period between March and September is when the most fish will be caught. After September, the catch will be less and when that cannot meet the demand, prices increase.”

Sim also previously told The Malaysian Insight that completely eliminating middlemen from the market is impossible as most fishermen no longer have the energy to sell their catch at the market after returning from the sea nor do they not have the necessary contacts.

So, fishermen often rely on middlemen to sell their catch.

“I can understand why middlemen hike up the prices when it gets to their hands, because they carry the risk of having their stock go bad before they can sell them,” Sim said.

The government’s research found that consumers can enjoy the lowest prices if fishermen sell their catch at the market themselves and anyone can place a bid there, with market supply and demand ultimately determining prices.

“We cannot control the prices of fish, and we cannot stop seafood businesses from making money, but we are considering letting the Fisheries Department play the role of intermediary. Fishermen can send their catch to the local Fisheries Department and any prospective buyer, such as hawkers, restaurants and regular consumers, can place their bids for the items they want there,” Sim said.

However, the proposal needs to be discussed with industry players first.

Ling said the proposal is not viable due to issues with transportation and distance, while both the supply and demand of the local fishery industry are tiny compared with other countries.

The industry is also facing many challenges, especially when it comes to technology, the main reason fishing yield has not increased much in many years, he said.

“The government said it wants to take care of the B40 group, I think the only way to do that is to urge people who can afford to do so to buy higher-end fish, while those who have lots of financial burden can settle for the humble ikan kembung,” Ling said.

Lee is also worried about logistical problems in Sim’s proposal, questioning if the government will deliver seafood all the way from the Melintang harbour to Kuala Lumpur. – November 1, 2019.