Market incentives for shark fisheries

Abstract

Fishers tend to prioritize landings of the most valuable product to better utilize vessel capacity. This may lead to discards of catches that are economically undesirable or legally prohibited. The high-value of shark fins and the low-value of shark carcasses has traditionally led to an example of that practice, known as finning. Brazil is an important player in the trade for non-fin shark products. The recent increase in shark meat trade is associated with increased imports of shark meat in Brazil. This increase may be a consequence of stricter finning regulations that has created incentives for full utilization of sharks and exposed the resource to a new source of demand. Thus, sharks overexploitation may increase, even if demand for fins weakens over time. This paper investigates the shark meat market development in Brazil over the last decades using demand and cointegration analysis, with a focus on before and after implementation of finning restrictions in 1998. Results indicate that shark meat is not a new market in Brazil, but an old one driven by a particular interest from local consumers. The decline in domestic shark meat landings, increasing demand for seafood, and the commoditization of shark meat have facilitated import growth. Additionally, domestic prices seem to influence imports most likely because Brazil is an important player as a shark meat consumer. This means that even with the global shark fin market weakening, the Brazilian demand for shark meat is likely to contribute to the overexploitation of sharks in poorly managed fisheries.