In the long term, high prices are not sustainable and production costs need to be competitive to access international markets. During the 7th Philippines Shrimp Congress in March, stakeholders looked at options for the future direction of the vannamei shrimp industry. Reports Zuridah Merican.

After the removal of the ban of vannamei shrimp culture, initial harvests were form farms in Luzon. Today all vannamei shrimp are sold chilled in the local markets. Ex-farm prices range from PHP160 to 220/kg (USD 3.56-4.89/kg) for 10-11g shrimp to PHP 200-280/kg (USD4.48-6.27/kg) for the larger 12 to 15g shrimp sold in Metro Manila markets. Prices are more stable in wet markets in Cebu at PHP180-190 (4-4.22/kg) for 10-12g shrimp and for 13-15g shrimp, the price range is PHP200-220 (USD 4.44-4.89/kg) Demand is limited to only 10 to 20 tonnes/day in Metro Manila, Luzon and 0.5 to 1.2 tonnes/day in Cebu, Visayas (Kramer, W, per. Comm). Profit margins range from PHP 10-30/kg and are much lower for producers in the Visayas as they spend PHP 30/kg for sales commission, harvest costs, packing, freight charges to Metro Manila markets in Luzon. The annual demand is estimated at only 10,000 tonnes.

“At the moment, with such good prices for chilled shrimp, farmers prefer this short term strategy rather than committing themselves to any long term contract with fast food restaurants to supply frozen shrimp which buyers/processors will only pay PHP 80-160/kg. There is also a tendency to restrict supply to keep the prices high. To keep producing for the domestic markets only, we need to expand local consumption, just as what Brazil has done, but at the same time we need to reduce costs”, said Philip Cruz, Chairman of the organizing committee.

“Farmers not only have to face unpredictable price fluctuations but those selling in the main wholesale markets in Metro Manila have to time their shipment during the full moon, low/neap tides and also during festivities. Wholesale market prices are usually but not always better during Fridays and Saturdays evenings. This is a problem when farms are forced to harvest early due to disease outbreaks”, said William Kramer, who runs several farms of Hoc Po Feeds Corp in the Visayas.

Marketing options

In her review on the options for the vannamei shrimp industry, Chingling Tanco, Managing Director, Mida Trade Ventures International, said that the world demand for shrimp is 500,000 tonnes in the US and Europe and 250,000 tonnes in Japan. Demand in the Japanese market is decreasing. Other than the Philippines, most Asian countries, are exporting to the US. Products are mainly IQF, Peeled and EZ peeled shrimp and various value added products. Markets in Europe import vannamei shrimp mainly for Ecuador, Thailand and India. France is the biggest importer of warm water shrimp and her imports are mainly from Ecuador as producers in other countries do not seem to know how to solve the burst hepatopancreas problem, said to be lined to more intensive culture.

“The barrier for producers from the Philippines into export markets is that most of our 25 plants are not ready with accreditation requirements. They lack experience in processing the vannamei, as well as appropriate freezing and packaging expertise. They also have frequent brown outs and higher costs for labor and electricity. Today, like our regional neighbours, we also face a strong currency versus the US dollar”, said Chingling. (Conversion rate to one USD:PHP 44.45)

“We have to learn to produce cheaply, learn how to produce vanname shrimp correctly and take advantage of modern culture technology. Based on the US shrimp import prices, our ex-farm price must be PHP 126.35/kg for 15g shrimp and PHP 212.88/kg for 28g shrimp to be competitive. Prices in Indonesia are IDR 40,000/kg for 28g shrimp which is equivalent to PHP 200/kg. In the last few years, Thailand and Indonesia have also been producing vannamei shrimp, mostly in the 31/40 pcs/kg and 50pcs/kg category but large ones at 28g and 30g shrimp or 16/20 and 21/25 headless are also produced. In CP Indoneisa, 20g shrimp was produced in 90-100 days. If we can, we should do this or else go back to farming the black tiger shrimp”.

Plans for a stronger trading niche are now in place. Some of these are to build up our sourcing capabilities in Malaysia. With their recent self imposed ban on shipments to the USA, many Malaysian companies are looking for new markets in the USA.

• Strengthening our Vietnam Representation with Holmbrook

• A more focused program with our affiliate office in Singapore especially on the Barramundi project

• Assigning the Fish Project exclusively to one trader

• A renewed vigor through strong programs in Fish Fillet, Tuna, Octopus and Tequisa

As always, Mida Trade continues to train and recruit staff to complement and enhance the services we offer clients. Our new staff bring with them the education, experience, training and attitude we seek in all our staff.
We proudly introduce our new staff:

FRANS WINATA Graduated with a Bachelor Degree in Computer Engineering from University of Bina Nusantara, June 1997 and brings him a wealth of experiences as Buying Agent. Marketing Manager, Sales Manager ,Quality Assurance, Marketing staff, and his earlier position as a Trader at Mida Trade Ventures Int’l . As a young man, Frans also worked as a Sales Engineer. Frans has realized that a career at Mida is the best option after all!

LEAH B. ARQUIZA Leah graduated with Bachelor Degree in Food Technology from University of the Philippines in Mindanao.
Her work experience is quite impressive: Quality Assurance Supervisor / R&D Officer, Quality Control Supervisor / Research & Development Technical Officer with previous experience in Octopus and Tuna processing.

SIARA JEANNE F. NULADA, Trader Trainee
Siara graduated with Bachelor Degree in Aquaculture from University of the Philippines in the Visayas, and has worked as am Aquaculturists/Researcher .

RICKY B. BINCAL Ricky is our youngest new staff. He has just graduated with a Bachelor degree in Custom’s Brokerage.

We have finalized our partnership with Laitram Machinery and are now exclusive distributors of Laitram Machines in Indonesia.
Laitram Machinery, Inc. is founded on innovation and patented ideas, beginning in 1949 with the introduction of the world’s first automatic shrimp peeler. Today Laitram Machines include equipment for shrimp processing, shellfish cooking, and chilling.
Current plans for this partnership include a seminar and sales presentation in November facilitated by Laitram Territory Managers for Asia Pacific, Fam Kow Mung and Philip Choo. It is also expected that technical division heads form the Laitram head office in the United States will join this project.

IT ALL STARTED WITH AN IDEA, says Lourdes “Chingling” Tanco, Managing Director of MIDA (originally, Management Investment Development Associates), a name closely associated with brother, former Philippine agriculture minister, Bong Tanco, but which now has hardly anything to do with its founding objectives. “It just rings a bell, so I decided to use it (the acronym),” she laughs. MIDA is Chingling’s seafood trading and distribution business that counts around 15 years of servicing many of the country’s top fine and casual dining spots.

Ask the edgy chefs behind Le Soufflé, Cibo and Ilustrado, to name a few; throw in some five-star hotels, like the Shangri-la group, the Mandarin Oriental Hotel and the Peninsula Manila, caterers, like Miascor and Philippine Airlines, resorts, like Tagaytay Highlands and Island Cove, and the more accessible dining places, like Cabalen, Jollibee, Don Henrico’s, TCI Fridays, Fish & Co., Dencio’s and Goldilocks, and you get the picture. Through the years, MIDA has acquired a roster of satisfied customers coming from practically all market sectors, including, as Seafood Product Manager Lynette Jugueta affirms, small cafeterias and even private households.

“Chingling Tanco and Mida Foods are the best seafood purveyors in town,” says J Camboa, executive chef of El Cirkulo. “We’ve been working together since 1995. They have consistently provided quality and unique seafood for El Cirkulo and our other restaurants (Milkyway Café, Tsukiji and Azumaya). Chingling even calls me while she’s on a buying trip in Europe or the States to ask if I am interested in a particular item. Now, that’s service!”

“Chefs are always looking for something new: I wanna have something special that only I have, that you can’t find in any other restaurant. The ideas come from them or from us. That’s why I love attending those monthly chefs’ tables, where we talk about food and new ideas,” explains foodie Chingling, who is no stranger to the trading business.

From college, she joined an American company that traded feed ingredients and fertilizers in the USA and Asia. In 1985, she moved into shrimp trading, her old company being acquired by ConAgra, the second largest food company in the USA and owner of Singleton Seafood Company, the largest shrimp processor in the US. In 1986, she went to Indonesia as country manager for a joint venture trading company between ConAgra and a private banker to capitalize on Indonesia’s promotion of its non-oil! gas exports. In 1990, she was assigned to the Philippines to start a trading office that would source shrimp for Singleton and other ConAgra seafood companies. She left the firm soon after to put up MIIDA Trade Ventures International, Inc. and MIDA Food Distributors, Inc.

“In 1997, seafood was getting scarcer in the Philippines-not much to export. We noticed that the products that we were buying from Indonesia could be brought to the Philippines and sold for profit. We started with tuna pangu and tuna belly, sent them by air from Bali to Manila and sold them directly to restaurants in the Philippines. The cargo sold like hotcakes and we got enthused. We did this for several shipments before we gathered up enough courage to bring in a whole container of stuff.”

The Philippine Government lifted the ban on the import of Broodstock and cultivation of the vannamei in the Philippines with the signing at 11:45 am today 8 January 2007 by Agriculture Secretary Arthur Yap of the Fisheries and Administrative Order (FAO) No 225. This move will revive the aquaculture shrimp industry in the Philippines that had withered to a mere 20,000 mt of black tiger production per annum (vs official government statistics of 38,000 mt) leaving a lot of abandoned ponds or expensive shrimp ponds converting to extensive milkfish or tilapia production.

We expect that production nationwide will increase rapidly. Initial output will be first aborbed by the domestic market as local ex pond prices drop from a current Php350-430 ($7.00-$8.60) per kg for 20 gram animals and Php280-350 ($5.60 to $7.00) per kg for 15 gram animals. The numbers needed for exports to kick will be at Php175 ($3.50) and Php145 ($2.90) respectively. This production for the domestic market should be increasingly available from May onwards and exports for sure will commence by the end of the 3rd quarter 2007.

Initially mainly block frozen product will be produced as the approximately 21 shrimp exporting plants have not modernized and have survived on a mere 2 tons a day of primarily HO Japan production. Four plants claim to have IQF equipment either installed or coming or mothballed from way back when most of these plants have been supplying 90% to either the Japanese or Korean Head On markets and know very little about other product forms, markets, recoveries, yields, packaging and costings. So they will start slowly but surely.

Mida has been in this market since 1990 when it was first started incorporated as a buyer in the region for ConAgra/Singleton Seafood. Mida Trade since expanded its client base across the United States, Europe, Australia and North Asia though we serviced these buyer needs more from Indonesia than the Philippines, In 1997 Mida established its local distribution company buying imported and local frozen seafood to sell directly to over 1000 hotels and restaurants in the Philippines through its own fleet of reefer trucks and its own cold storage facilities. Because of this Mida offers Philippine plants access to both the local and international markets. It has over 100 employees is well placed and connected in the local seafood industry to effectively represent buyers who want to capitalize on the soon-to-be active buying opportunity from a new non-tariff shrimp source.

Mida Trade’s and Mida Food’s Managing Director Chingling Tanco has served for the last 2 years as chair of the local Philippine Fisheries and Aquaculture Board and headed their advocacy for the lifting of this ban on the vannamei for the last two years. Today we celebrate the success of the lifting of the ban for many many many reasons – especially the rewards of her efforts and time spent battling local politics and misguided policies. It also has established Miss Tanco and Mida one of the key players and movers in the industry – from Hatchery operators to Pond owners to Processing plants.

I think I speak for and represent the market for lots of aquaculture products. I’ve been buying frozen seafood products, mostly shrimp and fish here in the region for almost 20 years and supply it to the largest shrimp processing plant and to the second largest food company in the US, and lately, as buyer for over 40 importers, distributors, shrimp processors, and end‐users in the US, in Europe and in some of the regional markets.

My own MIDA Trade industry has been operating a shrimp processing plant for five years now. Nine years ago, we also set up MIDA Foods Distributors in the Philippines, responding really to the shortage of seafood, and we are now selling frozen seafood directly to over a thousand hotels and restaurants in the country. So, I have this vision, pulse and feel to promote these products for the local and international markets, and the procedures in seafood trade as it is associated with the requirements for those markets. We have been buying from processors and exporters in the ASEAN Regio n for almost 20 years.

We also doubled our exports in these countries within two decades and have been stimulating aquaculture so that we may have enough volume of agri‐aqua products for export. However, we have to cope with the changing demands of the international markets because I see demarcation and how slow our export goes. For almost 20 yrs, I’ve seen how the rest of our neighboring countries have capitalized on the prawn market in the US and Europe, and we are so happy exporting the Philippine shrimp, bangus, sea cucumber. Our total export is about 10,000 MT a year and the prawn market is about two million tons and Thailand almost half a million ton. There are many problems involved in the aquaculture industry.

Production related problems include decreasing aquaculture area, individual farm zoning, culture problems, inappropriate farm management, inadequate quality species, low survival rate, diseased shrimps, environmental impact, low production/yield and high production cost. Market‐related problems include the presence of chemical and anti‐biotic residues that fall out or above the standards specified for particular products because markets have different standards, uncertain market prices, poor product quality, including raw material processing under the halo of food safety.

For the Philippines, perhaps we don’t have market problems, and I’m sure for aquaculture products because we export so little of our produce and most of our export goes to Japan market, but I’m not sure in the seaweed industry. So, I volunteer to discuss later about best aquaculture practices. The first time I get involved in the issues on Philippine aquaculture was when I asked by Secretary Lorenzo to chair the Fisheries and Aquaculture Board (FAB), with Mr. Enriquez who is involved in the various sectors of the industry, with Philip Cruz, and the Bangus Association in Pangasinan, as members of the Board.

Out of the various issues, we identified and pursued the one with the most potential impact the Vannamei. So, for the last two years since we focused on the issue, as we all know, lifting of the ban has been held indefinitely…it could be next week, next month, next year… and hopefully, the simple lifting of the ban would revive two lines of the aquaculture sector and hopefully could equal or undertake a great strike to catch up with the market.

The most important gain I think that has been achieved is the pursuit of the decision war to be one and put together various stakeholders - the hatchery operators, growers, processors, traders, brokers, consignacion owners, and other allied industries, chemicals and other input industries and the NGOs in tackling the issues, to fight for common cause – to review the vannamei industry. This Conference aims to further capitalize on the unification of the industry – thus the co‐hosting of the FAB with Tambuyog today. The issues and problems earlier mentioned, I think, ill be solved by long-term drive of doing it right, and must include sustainability, environmental protection and social responsibility. Now we share this with other aquaculture sectors today… doing the drive - best practices, food safety, and traceability for long‐term trade.

Only through these can we even solve the problems mentioned earlier. The internationally accepted standards will be presented later and the program is voluntary, successful and is now being used by other countries because consumers demand for it. It may be achievable but it requires lots of spending to put together the systems that will allow that but we would be paying for the premium. The two buyers base in the US – Darden Restaurants, the biggest chain which owns over 2000 restaurants in the US and Wal Mart – the biggest supermarket chain in the US‐ these two examples of companies that said – “they will buy only from companies that could supply us shrimp from ACC‐certified plants, farms and hatcheries that practice and are certified for BAP”. For the last six months, there has been a rush to certify farms in Thailand, South America, Malaysia, Bangladesh, and India and all their farms have been certified in June this year. They put a deadline to get these plants certified until July next year.

There has been a rush to get these plants certified and comply with the requirements in order to qualify as supplier in this biggest supermarket chain. So it is an incentive needed by the market. While we are trying to consider today what should be put into law, I think personally, that should be achieved. Thailand has come up with its own program to set up GAP standards, regulated and put it into law, and also have a Code of Conduct which replicates what ACC set up as Best Aquaculture Practices. In Thailand, they have dairy farms that has put together into cooperatives to be certified for BAP.

Our objective is to set up standards, learn and extend that information to as many people and realize eventually that standards allow long term success in their farm nd be sustainable. What is BAP is something we should aim for, should know and should comply with. So with this course, starting with FAB, Tambuyog and the rest of the industries represented today, let’s continue this dialogue for if we are together, along with the community, we have force and we try to improve.

So we join together and set the standards. Tambuyog has its own concerns – to protect the environment for the fishermen, the industry has something to accept as well and together, we recommended to government what we did, put the BAP into law because it’s achievable and I think we could go for the best‐ we know best exist. So, with this cooperation, we can do it and certainly we can do it right because we all know, “Right is might”.
Thank you.

Chingling R. Tanco Chairperson,
Fisheries and Aquaculture Board of the Philippines President,
MIDA Trade

NFI - The National Fisheries Institute based in Washington DC in the USA
SIPA - The Seafood Importers and Producers’ Alliance - based in Brussels, Belgium
APCI - The Indonesian Cold Storage Association
GAA - The Global Aquaculture Alliance
WAS - World Aquaculture Society
Mida Trade subscribes to numerous Seafood Publications in order to keep it abreast of current affairs in the Seafood Industry - among them - Seafood International, Intrafish International, Seafood Business, World Fishing. Mida Trade probably the best seafood library in the Philippines. Mida Trade’s senior staffs attend the Boston Seafood Show, the European Seafood Show, and the Global Shrimp Outlook meetings every year.

Mida has hired new staff over the last 12 months who will eventually be the new traders of the company. 6 of the new staff are from the Philippines - 1 Food Technologist, 4 Fisheries graduates, and 1 Boston college graduate with extensive international experience. We have hired 2 new staff in Jakarta - one for quality control and the other, a traffic/logistics expert. In Surabaya we hired 3 more - one Administrative Assistant , one Logistics Officer and one more for Quality Control. People are the key to our business and we spend good time and money training them locally and internationally so they can perform their functions well. Our new staffs come with an impressive portfolio, while our veteran staffs have been trained locally and internationally.
Our total count now is as follows:
Trading Staff: 9; Logistics Staff: 8; QC Staff: 9; Administration Staff: 11. This is the biggest headcount that Mida Trade has ever had but we believe we are investing in the future and that a trained staff will better be able to service our growing accounts now and in the next 5-10 years.
The next months of March to June will be spent with on the job training for many of the new staff, and International travel for training of the more senior executive staff. Mida Trade is proud of its training programs and efforts. The quality of the Mida staff will reflect this.

Mida Trade started its canned division in 2004 and is slowly but surely growing this business of brokering also for canned foods.