Price Behavior

of Hilsa Fish at Kawran Bazar

COURSE CODEF-505 |MANAGERIAL ECONOMICS | 22/08/2020
Price Behavior of Hilsa fish at Kawran Bazar

Submitted to
Professor Dr. M. Masud Rahman

Department of Finance

University of Dhaka

Submitted by: -

Name ID
Mehady Islam 44033
Sarjia Rahman 44024
Md Shahibul Islam 44027

Date of Submission,22th August, 2020

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Price Behavior of Hilsa fish at Kawran Bazar

Abstract
A study was undertaken to examine the marketing system and price behavior of
Hilsha fish at Karwan Bazar, Dhaka, Bangladesh during the month of August 2020.
The objectives of the study were to estimate costs and margins, seasonal price
variation and to test market integration of Hilsha fish. Primary and secondary data
were used for this study. The higher marketing cost was incurred by aratdars and the
lowest by retailer. On the other hand, retailers earned the highest net marketing
margins. Analysis of market integration shows that Hilsha fish market in Bangladesh
was well integrated. The findings of the study revealed that the marketing of Hilsha
was a profitable business and some recommendations were provided for the
improvement of Hilsha marketing in the country

Introduction
The ilish (Tenualosailisha) also known as the ilisha, hilsa, hilsa herring or hilsa shad,
is a species of fish related to the herring, in the family Clupeidae. It is a very popular
and sought-after food fish in the Indian Subcontinent. It is the national fish of
Bangladesh and state symbol in the Indian states of West Bengal and Tripura. The
fish contributes about 12% of the total fish production and about 1.15% of GDP in
Bangladesh. On 6 August 2017, Department of Patents, Designs and Trademarks
(DPDT) under the Ministry of Industries of Bangladesh has declared the recognition
of ilish as the product of Bangladesh. 70-75 percent of total produced ilish in the
world is produced in Bangladesh which applied for Geographical Indication (GI) in
2004. About 450,000 people are directly involved in the catching of the fish as a large
part of their livelihood; around four to five million people are indirectly involved with
the trade.

Kawran Bazar is a business district and is one the biggest commodity marketplaces in
Dhaka city, the capital of Bangladesh. It is a designated commercial area of the Dhaka
North City Corporation.

In Central Dhaka City, Kawran bazar act as the main whole seller of fish to local
market, hence Hilsa fish is also sold from there. A whole section of the fish market in
Kawran bazar is allocated for the sale of Hilsa fish. It is a highly popular item inlocal
market and restaurants. Usually all the hilsa fish sold out every day before 11am in
this market.

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Price Behavior of Hilsa fish at Kawran Bazar

We visited Kawran Bazar in 19th of August ,2020 and talked with several vendors to
get an idea of the average data. Though the sellers were busy, but they were happy to
give us information regarding the average selling price per kg and the quantity of
daily sell.

Also, we got some data from online to see if the current pandemic (Corona Virus)
impact on the market.

Methodology
Primary Data
We gathered the primary data by talking with several vendor in the market and
staying there patiently till 11 am so we can talk to most of them and have an average
data

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Price Behavior of Hilsa fish at Kawran Bazar

Secondary Data
From the internet we gathered the data for month of May and June,from various
newspaper websites.

Objectives:
• To identify the Equilibrium price

• To determine the reason of price changes

• To examine the marketing cost and marketing margin of hilsa fish

• To analyze the market integration of hilsa fish and

• To examine seasonal price variation of hilsa fish

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Price Behavior of Hilsa fish at Kawran Bazar

Literature review
While searching online we found several studies done on Hilsa fish, as it is a highly
exportable and profitable item. And fortunately, we found a detail study of Hilsa Fish
at Kawran bazar regarding Marketing System, Seasonal Price Variation and Market
Integration.

Discussion and Result

Marketing system of Hilsha fish:
From the result of the study, a complete Hilsha marketing system was found-
Major Value chains of hilsha in the study areas are as follows:
Domestic market:
Value chain – I Fishermen – Aratdar – Paiker – Aratdar – Retailer – Consumer
Distant market:
Value chain - II Fishermen – Aratdar – Paiker – Retailer – Consumer
Local market:
Value chain - III Fishermen – Aratdar – Retailer – Consumer (Local market)
Overseas market:
Value chain - IV Fishermen – Aratdar – LC Paiker – Consumer

Hilsha fish farmers sell 16% of fish to farias; 24% to beparis via aratdars, 16% to
paikers via aratdars and 12% to LC (Letter of Credit) paikers via aratdar and 32% to
retailers. Farias sell 100% to retailers via aratdar. Bepari sells 80% to retailers and
20% to paikers via aratdar. Paikers sell 100% of their fishes to retailers via aratdar.
LC paikers sell 100% of their fishes to India. Retailers sell the entire fish to ultimate
consumers. Hilsha fish farias purchase 100% fish from fishermen. Paiker, bepari, LC
paiker and retailer purchase 100% fish from fishermen through aratdar. Consumers
purchase 100% of hilsha fish from the retailers.

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Price Behavior of Hilsa fish at Kawran Bazar

Pricing of Hilsa Fish at Kawran Bazar:

Price is dependent on the interaction between demand and supply components of a
market. Demand and supply represent the willingness of consumers and producers to
engage in buying and selling. An exchange of a product takes place when buyers and
sellers can agree upon a price. When a product exchange occurs, the agreed upon
price is called an equilibrium price, or a market clearing price. When either demand or
supply shifts, the equilibrium price will change.

By studying the market, we get the price data and Equilibrium price of Hilsha Fish
from different months. They are given below:

Price on April 2020

Size Price
Below 500 grams taka 400

Below 1kg (700-800 gram) taka 600

Above 1 kg taka 1000

Above 1200 gram taka 1500

Price on July 2020

Size Price
Below 500 grams taka 480

Below 1kg (700-800 gram) taka 900

Above 1 kg taka 1200

Above 1200 gram taka 2000

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Price Behavior of Hilsa fish at Kawran Bazar

Price on August 2020

Price Size
Below 500 gram taka 450

Below 1kg (700-800 gram) taka 1100

Above 1 kg taka 1250

Equilibrium

Equilibrium

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Price Behavior of Hilsa fish at Kawran Bazar

Price changing behavior of Hilsha Fish at market: -

Wholesaler fish market is the most unpredictable market in informal sector of
economy. It is directly connected to the supply demand and also price.

As we know about the demand of Hilsha fish, it is always high but in market situation
it depends. Price can be changed in different way and it effects on the market and also
demand of the market. From the river to the consumer there are minimum 3 party
works for distribution. The first one who capture the fish from the river, boat, labor
work and some equipment along with fishing net. From this point they sell it the
riverside market or from where it distributed to other side of the country. On this point
one buys it from the fisherman and sell it to the wholesaler in the riversides market.
Their capital is land, labor and money. And their main cost is buying price for the
quantity. Sometimes they directly sell to the consumer but it is a very smaller
quantity. After that one who sell this to the countryside market like kawranbazar, they
buy from the riverside market and sell to the last point of wholesaler. Their capital is
also land, labor and money. Their cost depends on buying price, transportation cost,
labor cost, and money cost. They sell it to the local seller who sell this to the
consumer. And also, their capital is land, labor and money, their cost is buying price
and land cost.

So, there are 4 kinds of distributor works from the beginning to the end. Each and
every point if one point is affected by any kind of matters, distribution can hamper
and also it directly hit to the price.

If the price of fishing net is increasing the fisherman will want more price than before.
And same to every point. And each and every point price can be lower and higher in
the amount of 100-500 tk per kg.

Now we can talk about the market behavior. Like every government holiday market
took the highest price rate position. Cause market have more demand, More, supply
and it led to the higher price.

If the market has less supply from the demand it usually takes higher price. If market
demand is high (Like holiday, Special day etc.) but less or more supply, it led to the
higher price.

If supply hampers by any kind of matter. The price will higher or it will be hampered.
Sometimes it not necessary to lower price if the supply is more than the demand. Like
the day before govt holiday or weekly holiday.

On the other hand, Price can be higher or lower between 100-200 tk per kg, depends
on the market equilibrium.

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Price Behavior of Hilsa fish at Kawran Bazar

Now our government officially banned catch Hilsha fish on the occasion of
production times of Hilsha fish. On this time, there are no supply, Higher demand, but
the price is lower. Because of awareness and also, on this time people don’t like to eat
this kind fish for taste purpose. Cause on this time, Hilsha catch from the sea side area
and it taste salty with no smell of river fish. So that price is lower from the market.

Conclusion:
There is always a high demand for Hilsha fish. But from the price data we can say that
the price of Hilsha fish doesn’t vary largely. Even in this Covid-19 pandemic the price
of Hilsha fish doesn’t vary that much. With the government regulatory there is now
more supply than before. The country’s Ilish fish production has increased by around
150% in last 15 years.

Government has taken different types of initiative from time to time to increase the
production of Ilish. We are getting the result now. As the both supply and demand for
the Ilish is high, the equilibrium price doesn’t shift largely or other factor of market
can’t affect the price widely.

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