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Small fish, big business: Asia's billion dollar live reef fish trade

By Dean Irvine, CNN
  • Trade in live reef fish for restaurants in Hong Kong and mainland China worth around $1 billion
  • Rare fish like leopard coral grouper are increasingly popular and expensive
  • Fished from waters around southeast Asia's Coral Triangle; many areas fished out
  • Issues of sustainability are not high on the agenda for most suppliers, restaurants and diners

(CNN) -- In Hong Kong, where factory space is stacked in skyscrapers, the 15th floor of an industrial block houses vast tanks in which thousands of rare fish swim under the eerie, purple glow of UV lights.

Normally found thousands of miles away on the reefs of the tropics, the coral grouper are being bred on land in one of the world's most densely populated metropolises to feed a local population that consumes 3.6 times the global average in seafood.

Sold live, fish like leopard coral grouper are highly valued in China, where ostentatious dining calls for expensive and attractive centerpieces for celebratory or business banquets -- last week during the Lunar new Year a single fish could cost around $130.

But even the tons of fish swimming in the tanks of OceanEthix incongruous high rise facility can't sate a growing market for live reef fish in Hong Kong and mainland China that is worth around $1 billion each year.

"No one quite knows the size of the market here," says Lloyd Moskalik, OceanEthix managing director, who suggests the black market for live reef fish could be as large as the actual recorded figure.

Gallery: Main routes of live fish trade in Asia
The demand for live coral grouper completely exceeds supply. If demand keeps up, you won't see this species in the wild in three to five years.
--Lloyd Moskalik, OceanEthix

"We've got five wholesalers and each could take 2 to 3 tons of red leopard coral grouper a week -- that's around 2,000 fish each. There have to be around 30 to 50 wholesalers in Hong Kong who could do the same, so that gives you get an idea of the size (of the market)."

The turquoise waters of the Coral Triangle in southeast Asia, home to the highest diversity of sealife in the world, is where the majority of the fish found swimming in Hong Kong and mainland China's restaurant aquariums originate.

But unsound fishing practices, fueled by increasingly high demand and high prices, are pushing species like the leopard coral grouper and the reefs themselves to the brink.

"The demand for live coral grouper completely exceeds supply. If demand keeps up, you won't see this species in the wild in three to five years," says Moskalik.

The town of Taytay on the Philippine island of Palawan is a microcosm of a trade that takes place across the region. The waters around the bay currently account for 70 percent of the country's live fish exports, but the World Wildlife Fund has warned that stocks of grouper there are close to collapse.

Working with the Palawan Council for Sustainable Development and the Philippine government's Coral Triangle strategy, attempts have been made to turn the area's 3,700 fisherfolk into stakeholders, making them more aware of the consequences of over-fishing.

Standing in the shadow of an enormous sign that bears the town's name (similar to the one in the Hollywood hills), Taytay's former mayor Roberto "Tito" Rodriguez says illegal fishing has fallen dramatically.

He's an environmental convert who realizes the value of fishing to the area's economy and says that over the last few years 90% of local fisherfolk have switched to legal fishing means.

Yet many believe that if illegal fishing is falling it's more likely because the fish are no longer there.

Merleen Gabuco, a resident of a fishing village in Taytay bay says a fishing trip now takes three days compared to just hours years ago. She might earn around $40 for a grouper that takes many months to grow to market size, the same cost as a fishing expedition.

Palawan's recorded live reef fish catch reached a high of 700 tons in 2007 and fell to 400 tons in 2009, according to the World Wildlife Fund (WWF). Mavic Matillano, a researcher for WWF in Palawan, estimates that 140 tons is the maximum of what could be sustainably caught each year and that only 31% of the area's reefs are in good shape.

As well as experiencing coral bleaching from higher than normal temperatures in recent years, Taytay has had to face up to destructive and illegal fishing techniques, like blast fishing and cyanide, which also kills coral reefs across the Coral Triangle.

Sustainability is not an issue for the majority in Hong Kong.
--Melinada Ng, Worldwide Seafood

The boom of blast fishing is rarely heard these days, says Hernan Fenix, a local government fisheries official, but the amount of cyanide used (to catch fish by stunning them) is hard to gauge; there are no outwards signs of poisoning to the fish, but coral is often bleached to death.

Making sure that sustainable fishing techniques are used is also hard to enforce.

While marine protection zones have been set up, covering around 10 percent of fishing grounds around Taytay bay, a lack of adequate protection has previously led to clandestine plundering of spawning grounds.

Over three nights, one man was suspected of fishing two tons of young grouper, says Matillano. He couldn't be prosecuted as there was no evidence except for him to be seen driving a new car weeks later.

Back in Hong Kong, concepts of sustainable fishing are slowing catching on, but with so much demand for live fish there remains a general indifference to the issue among the majority of suppliers, restaurateurs and diners.

Despite the best efforts of groups like the WWF to provide sustainable seafood guides, "sustainability is not an issue for the majority in Hong Kong," says Melinda Ng, Director of Sales and Marketing for Worldwide Seafood.

Pressure from conservation groups and their clients led to Worldwide Seafood putting an end to selling grouper from southeast Asia two years ago, but it is not easy to find out if seafood is sustainably caught.

Around 40 percent of the fish coming into Hong Kong's bustling Aberdeen wholesale market is wild caught, yet no certificates are needed by the Fish Marketing Organization concerning how or where they are caught.

Wai Kit Chen, the deputy manager of the market, where 35 tons of seafood are landed each day, said he had never heard of fishing with cyanide.

Innovative aquaculture like OceanEthix's may be part of the solution to keeping the fish like coral grouper on the menu, but some restaurateurs are trying to go fully sustainable and avoid the live fish trade altogether.

It took Colin Gouldsbury four years to research and source fully-sustainable fish supplies for his Hong Kong seafood restaurant, DotCod.

"I don't particularly like farmed fish -- they cause a whole load of other problems," he says.

"I can guarantee that (our seafood) is sustainably sourced. If I can do that in Hong Kong, not an easy task, then I'll keep doing it."

But with the price of red coral grouper estimated to rise by around 10 percent each year, it seems a sea-change in a cultural attitudes to dining may be needed to preserve the wild reef fish in places like Taytay and across the Coral Triangle.