1 POTENTIAL FOR OPEN-AIR FISH MARKETS OUTLETS FOR TILAPIA IN HONDURAS AQUACULTURE CRSP RESEARCH REPORT 03-193 AUGUST 2003 RESEARCH REPORTS AQUACULTURE COLLABORATIVE RESEARCH SUPPORT PROGRAM Sustainable aquaculture for a Secure future Potential for Open-Air Fish Markets Outlets for Tilapia in Honduras Omar Fúnez, Ivano Neira, and Carole Engle Aquaculture/Fisheries Center University of Arkansas at Pine Bluff Pine Bluff, Arkansas, USA Abstract Honduran tilapia farmers face several problems regarding product size and export-quota requirements. One major obstacle is the significant production of undersized fish not suitable for the export market. Domestic markets would provide stability by offering additional market alternatives, thereby reducing risks associated with having only one target market. The goal of this project is to assess the domestic market as an alternative tilapia outlet. While the overall study includes analyses of open-air fish market, supermarket, and restaurant market outlets, this document will focus on open-air fish markets. A random sample of all open-air fish market vendors in the major urban areas and census of the fish market vendors in the small towns in the country resulted in 66 completed fish market questionnaires. The survey showed that tilapia is a well-known product in Honduran open-air markets. Overall, 70% of open-air market vendors sold tilapia, and over half of the open-air market vendors not currently selling tilapia responded that they were very likely to sell tilapia the next year. Approximately 25% of tilapia sold was from Lake Nicaragua. However, lack of demand, high wholesale prices, and off-flavor were mentioned as primary reasons for not selling or not continuing to sell the product. Results indicated relatively stable tilapia sales in recent years; however, inconsistency in supply was a major obstacle for further market growth. The survey results appeared to indicate potential to increase tilapia sales if a consistent supply can be maintained. Nevertheless, careful attention needs to be paid to the costs of production of farm-raised fish versus wholesale prices of wild-caught tilapia. Wholesale prices of tilapia ranged from US$0.20 to $0.61 lb -1 and averaged $0.51 lb -1 . It is unlikely that many tilapia farms would be able to produce and transport tilapia to open-air markets at these wholesale prices. Open-air markets do not appear to represent a profitable market outlet for farm-raised tilapia. Introduction Tilapia culture began in Honduras in the late 1970s (Teichert-Coddington and Green, 1997). In the early years, tilapia production was primarily charac- terized by small-scale, family operations with the objective of supplementing high-quality protein, and tilapia ponds were managed either extensively or semi-extensively as a supplemental agricultural activity. However, in the last decade tilapia produc- tion in Honduras has grown rapidly because of expansion of the market for fresh tilapia fillets in the United States and fiscal reforms that made Honduras more attractive to foreign investors (Humphrey, 1997). Additionally, uncertain prices and disease problems that struck shrimp farmers in the 1990s encouraged many to raise tilapia (Engle, 1997a). Export-oriented production of tilapia targeting the US market began in 1990 and has developed rapidly (Teichert-Coddington and Green, 1997). In 1997 fifteen tilapia farms with a total water surface area of 185 ha produced tilapia on a commercial scale for export and for domestic markets. These farms produced tilapia exclusively and are owned by individuals, local investors, and international inves- tors (Green and Engle, 2000). Tilapia exports from Honduras increased 56% (792 Mt) in 1999 compared with 1998 levels (Green and Engle, 2000). Neverthe- less, exporting tilapia fillets to the US is a risky practice due to the lack of adequate infrastructure needed to export the product and the small number of brokers handling tilapia. Most successful export