Fish prices still at subsidised rate, 25 million needed monthly: MIFCO

Despite the price of fish which Maldives Industrial Fisheries Company (MIFCO) buys from local fishermen now being lowered to MVR 16 per kilogram to meet global market prices, the company will only be able to move forward with that price if the government provides MVR 20 to 25 million as monthly supplements, said the company's Chief Financial Officer (CFO) Ilyas Haneef today.

Haneef, who is currently in charge of managing MIFCO said that the entire revenue generated by the company from exporting frozen tuna goes towards paying fishermen, and that the state owned enterprise's other expenses are managed via short term loans.

He also noted the significant loss incurred by the company due to changes in fuel prices.

"[We] have cashflow difficulties as well. [We're] moving forward with challenges. The biggest overhead cost for us is fuel expenses. Changes in fuel prices change [our] cost," he explained.

Ilyas also highlighted that the fish weighed by the company this year has been 40 percent less than that of last year, adding that the company's situation can only be improved by increasing and diversifying revenue generation options and cutting costs.

Based on the current global rates, the price at which fish is bought by the company without a loss has to be MVR 12. The excess is paid by the government.

The government has spent MVR 353 million on subsidies for MIFCO so far this year, while MVR 415 has been allocated as budget subsidies. If MVR 25 million is given as a subsidy per month for the remainder of the year, an additional MVR 150 million will have to be given as subsidies this year.

In total the government's expenditure towards MIFCO this year has reached MVR 1.2 billion.

Since the company started paying MVR 20 per kilogram of fish they buy, the government has spent MVR 560 million as subsidies on MIFCO.