From Stardew Valley Wiki

Green Creature

“ “The merpeople are curious about your festivities. They become upset when you litter into the ocean.” — Wizard

The merpeople are creatures that live in the Ocean. The Wizard refers to them in his dialogue at the Luau.

It is assumed that the green creature that very rarely appears under the left-most pier at The Beach is a merperson, but this has never been officially confirmed. The mermaid that sings at the Night Market (added with version 1.3) looks very different from this green creature, which was added prior to v1.3, indicating the green creature may be another species. The green creature is purely cosmetic and cannot be caught by fishing. It appears for a short time, then swims south, off-screen.

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