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| In most markets, the present structure is a result of organic growth and dynamic structural adjustments over time, rather than the result of a specifically designed development strategy. Where the supply chain is found to be well operating there is little need for direct involvement of the government. However, in many countries, the prerequisites for well operating markets are missing and corrective interventions by policymakers are needed.Transaction systems |
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| The possibility for successful auction sales of agricultural commodities or product groups such as seafood is determined by market structure and product specifics. The more perishable the product, the stronger is the necessity to clear the market at the end of the day. Therefore, fresh produce such as fresh fish is well suited for auction sales especially if the suppliers are plentiful.e-commerceWith the availability of new means of communications such as the Internet, electronic trading of seafood is becoming a reality. Although volumes at present are not significant, the potential of electronic trading is large, including that of electronic auctions. In particular, networks based on business to business trading are increasing its share of the total transaction volume. |
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| The development of business to business sites can be explained by three main factors: lower transaction costs, improved efficiency, and greater market reach. Whereas some sites sell any type of fresh food: seafood, meat, dairy, fruit and vegetables, others specialise in seafood. |
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| Many sites aim at creating an online platform for trading with daily auctions. Combined with improved logistics, the marketplace has effectively widened and reduced the importance of country of origin. This is especially the case for frozen products where global sourcing is becoming increasingly the norm.The business-to-business sites also provide vastly improved access to information and many of the sites operate as information platforms with market and price information linked to the on-line trading capabilities. |
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| There are numerous different ways in which a transaction of fish or fishery products can take place, ranging from sales though auctions or direct sales to barter where no money changes hands. In some markets, it is possible to buy sophisticated future contracts for certain products whereas other countries permit the lease or purchase of the fish resources in the form of quotas on the catch. |
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| In many markets, especially in developing countries, a large informal network of small economic operators performs important activities as traders, wholesalers and retailers. In many cases, there is also some degree of vertical integration with the traders also being involved in catch operations as boat owners. In addition, they often play an important role in financing the operations of the fishers.Wholesale markets |
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| Wholesale markets play an important role in the distribution of fish and fishery products. They are generally divided into two categories; first hand wholesale markets that act as distribution centres for locally produced fish, and second hand wholesale markets that distribute products imported from other regions or from abroad. The latter play an important role particularly in urban areas. |
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| Wholesale markets offer economic efficiency gains as the clients, usually retailers and caterers, but also smaller local wholesalers can confront a large variety of products from different sources all located in one area. The large number of wholesalers present in the market guarantees a high level of competition with prices that immediately reflect changes in supply and demand. In many cities, the fish wholesale market is also integrated in a larger structure of food wholesale markets. |
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| In recent years, thanks to improved logistics and reduced barriers to trade many large retailers can buy directly from aboard. This has in some cases diminished the role of the urban wholesale market. However, they continue to play an important role in the distribution of fish and fishery products in most large cities as well as in coastal areas for the sale of locally produced fish. |
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| Auctions |
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| In any market, the price formation mechanism is of fundamental importance. In order to guarantee economic efficiency and efficient allocation of scarce economic resources, available prices must reflect the actual costs of products and services but also the propensity of buyers to demand and of producers to produce and offer for sale. In order to achieve this, prices must be formed in a mechanism that gives voice to both the supply and the demand side.In principle, a product can be sold in two ways; through private or direct sale or through public selling such as auctions. An auction is a regulated public sale in which goods are sold to the highest bidder. The seller will auction a product when he is expecting a higher price through public sale than through private sale. |
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| A large number of countries use auctions for the sale of locally produced fish on the first hand. In recent years, the introduction of modern telecommunications and computer technology permit electronic auctions with remote participation from buyers and where the catch is delivered directly to the buyer's 's plant and does not go through a physical auction at all. In other cases, the auctions are operated electronically but the product is physically present and previously checked by the buyers. |
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