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Myanmar

Impact of COVID-19 on the Mud Crab Value Chain in Rakhine State, Myanmar, May 2021

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Executive Summary

Mercy Corps, under the Rakhine Market Analysis Unit (MAU), conducted a study across Rakhine State in September 2020, two to five weeks after lockdowns and restrictions were imposed in the region. The objective of the study was to better understand the impact of COVID-19 (COVID) on the live mud crab 1 (or mud crab) value chain in the State.

A total of 359 respondents were interviewed from coastal communities (and those living along rivers and streams close to the sea), across four townships in Central and Northern Rakhine (Sittwe, Pauktaw, Myebon and Rathedaung), areas which are heavily reliant on the mud crab industry. Key market actors were surveyed, from mud crab fishers, to collectors, traders and transport organisers. These 359 mud crab fishers were interviewed using a combination of telephone and online surveys. Key Informant Interviews (KIIs) were conducted with 36 other market actors, using phone calls and Skype.

As the Rakhine, and more broadly Myanmar, mud crab industry is essentially completely reliant on the product’s final export to China, COVID-imposed restrictions, including border closures, transportation and mobility constraints, significantly affected the sector. These challenges were exacerbated by declining demand and subsequent diminishing market price of mud crab, significantly impacting all market actors and the entire market system.

This report outlines key findings and proposed recommendations resulting from the study, to further guide humanitarian, development and market-oriented organisations, as well as donors and policy makers in the design and implementation of COVID response and relief programs to revitalize the mud crab industry.

Findings

KEY FINDING #1: COVID has shifted market conditions as a result of the border closure with China, decreasing the demand for export while increasing mobility restrictions. This has resulted in decreased household income for mud crab fishers, causing them to adapt their capturing and distribution practices – leading to sub-optimal coping strategies.

  • Prior to COVID, 72% of respondents stated that the activity of capturing mud crab was significant to their livelihoods, contributing to more than half of their total household (HH) income. However, post-COVID, their income has significantly decreased;
  • Main factors affecting mud capture activity post-COVID are: i) low prices (79%); ii) decreased demand (64%) and the home lockdown (58%);
  • 94% of fishers have reduced the volume of mud crab captured;
  • Frequently practiced coping strategies utilised by fishers can be categorized into: a) credit and loans and b) reducing food intake;
  • Debt has increased among fishers, as 95% requested a loan over the period July-September.

KEY FINDING #2: Collectors are experiencing knock-on effects from market system and distribution disruptions due to COVID and the dependency on exports to China – however are leveraging existing resources including social capital and ponds.

  • Prices paid to collectors have decreased by approximately 50-70% since January 2020;
  • Collectors are maximizing the social capital they have established with traders in order to sustain their businesses;
  • Collectors with ponds are leveraging this resource; by storing both crabs and crablets 2 until they can maximize size and price if possible – a resilient characteristic to facing external shocks and stresses such as COVID.

KEY FINDING #3: Aligned with other market actors, traders are also experiencing significant losses after the pandemic due to the diminishing export market, border closures and the increased cost of transportation.

  • Overall, traders did not change their commercial ties/selling channels in response to the pandemic, despite the fact that they reduced the average volume traded by 72% 3 post-Rakhine lockdown (as compared to 2019);
  • Traders significantly lost profit during the closure of the Chinese border, as they stopped operations for several days or a month. Additionally, the Rakhine lockdown and curfew resulted in longer transport times (from 24hours to 36hours to Muse), resulting in higher costs and losses for traders;
  • Traders reduced the number of pre-financing loans provided to collectors and fishers by approximately 30-60%, in some cases by 83%, while others stopped altogether. Established social capital and trust between value chain actors were key factors in determining cash advance recipients.

KEY FINDING #4: Transportation channels have been severely affected by COVID-19 restrictions and armed conflict, increasing the time and cost of transporting live mud crab - significantly impacting the sector and market systems.

  • Transport Organisers (TOs) are responsible for hiring trucks (with drivers), offering a service of sending the final product to Muse or China, always via Mandalay;
  • TOs have been significantly affected by COVID due to decreasing product demand and volume required for transport;
  • In addition, the Rakhine lockdown and curfew restrictions meant TOs were required to issue travel authorisations, leading to difficulties at checkpoints.

KEY FINDING #5: The complete dependency of the live mud crab sector on the Chinese export market has affected all market actors due to a drastic reduction in demand and transportation challenges via Northern Shan.

  • Market price for live mud crab is directly correlated to the size of crab, predominantly in line with Chinese gradient systems. Interviewed traders stated that pre-COVID, prices ranged between 2,500-12,000 MMK/Kg, decreasing post-COVID ranging between 2,000-8,500 MMK/Kg;
  • When comparing average prices pre and post-COVID, traders paid collectors and fishers approximately 30% less for larger sized mud crab;
  • Post-Rakhine lockdown, market operations and activity essentially ceased.