World Aquacluture Magazine - September 2020

WWW.WA S.ORG • WORLD AQUACULTURE • SEP TEMBER 2020 29 the Kadoorie Research Centre of the University of the Hong Kong in water recirculation design. The Burst of Sabah Grouper in the Hong Kong Live Marine Fish Market Researchers of the University of Eastern Malaysia, Sabah, under artificial conditions, have bred a hybrid between the tiger grouper Epinephelus fuscoguttatus and the giant grouper E. lanceolatus called the Sabah grouper that is a substitute for captured wild coral reef fish. The Sabah grouper R&D is Schumpeterian as it is, in Schumpeter’s words, a “bombardment” of the pre- existing live marine fish market as documented by Lai and Yu (2002) and Lai et al . (2005). In general, the Sabah grouper grows faster, is stronger and has a higher survival rate than most other cultured marine fish. Generally, only eight months are needed to raise a Sabah grouper to 1 kg. Supply from fish culture zones in Hong Kong and China has rapidly flooded live seafood markets. In addition to the huge volume of sales, the price of Sabah grouper has stayed steady at around US$10/fish. It is no wonder that the Sabah grouper monopolizes the fresh fish market and seafood restaurants. In the past, Hong Kong restaurants offered a large variety of live coral reef fish. There were as many as 35 species in a 1995 survey of 12 restaurants (Lai and Yu 1995) and 51 in a 1998 survey (Lai and Yu 2002). Now, a typical restaurant generally stocks only the leopard coral grouper and the Sabah grouper (Fig. 1). This is especially surprising when the leopard coral grouper sells at around US$40/fish or five times the price of the Sabah grouper. Because its supply is not stable, the price of the leopard coral grouper has high price volatility. Figure 2 shows the average weekly prices (based on daily data) of the Sabah grouper and the leopard coral grouper sold live in a store inWanchai Market over 23 months from 29 May 2018 to 29 February 2020. The price of Sabah grouper was basically constant (US$10 per fish; Fig. 3) and the supply steady, while that of the leopard coral grouper was volatile and erratic. We may conclude that the product has perfect price elasticity and the market is perfectly competitive (Anderson 1988). Although price differentials between live coral fish under common and private property have been discovered using official statistics of the Agriculture and Fisheries Department by Lai (1993) and studied by Lai and Yu (1995), the performance of the Sabah grouper as observed by the authors in this study is exemplary. There were two jumps in prices for both leopard coral grouper and Sabah grouper that coincided with the Chinese NewYear (3 to 5 February 2019) and the Mid-Autumn Festival (13 September 2019). Prices of the leopard coral grouper actually fell over the period of observations, suggesting that it was being replaced by the much cheaper Sabah grouper. This has strong sustainability implications. We also collected all the publicly available monthly wholesale prices of both the leopard coral grouper and Sabah grouper from the website of the Fish Marketing Organization (FMO) of the Agricultural, Fisheries and Conservation Department (AFCD) from January 2010 and January 2014, respectively, to December 2019 (Fig. 4). Wholesale price data shows a clear declining trend of the prices of both fish in normal and real terms (deflated by CPI) as well as in relative terms (leopard coral grouper compared to Sabah grouper). This remains true even after correcting for first-order autocorrelation, which suggests that the demand for leopard coral grouper, both in ab- solute terms and relative terms (compared to Sabah grouper) has been declining. This secular fall in price level should have a depressing effect on the incentive for catching leopard coral grouper. The trend and pattern of prices illustrate well that the far cheaper cultured Sabah grouper is a good substitute for the more expensive captured leopard coral grouper. There is little doubt, certris paribus , that culturing Sa- bah grouper is an innovative sustainable property rights response to the risk of wild leopard coral grouper extinction due to overfishing. Wholesale price is a better indicator of the incentive for catching wild fish as it is free from other costs such as retailing rent, labor and festival effects related to the bright red color of the leopard coral FIGURE 3. The retail price of Sabah grouper, 88 Hong Kong dollars per fish, in a wet market (Photo: L.W.C. Lai). FIGURE 2. Average weekly retail prices of Sabah grouper and leopard coral grouper (HK$/kg), May 2018 to February 2020. ( C O N T I N U E D O N P A G E 3 0 )