Seafood consumption soars, but where are the profits?

Australia’s love of seafood is tipped to continue, with overall seafood consumption tipped to rise by 3.7% over the next 5 years, according to recent industry reports released by IBISWorld. However, this demand is not forecast to fully translate into growth in our fishing and aquaculture sectors, with industry challenges expected to dampen revenue expectations.

Fishing challenges

The IBISWorld report on fishing in Australia cites ongoing fish stock depletion, increasing competition from imports and seafood farming, rising operating costs, and stricter regulation of catch quotas as key factors that will restrict industry revenue, which is forecast to grow by just 0.9%, from $1.46 billion in 2015–16 to $1.52 billion in 2020–21.

Rock lobsters are the largest contributor to revenue, accounting for 32.6%, followed by fish at 32.4%, crustaceans including prawns, crabs and crayfish at 20.1%, and molluscs including abalone, octopus, scallops and squid at 14.9%.

Fish caught by industry operators accounts for the largest share of production at more than 70% by tonnage. However, increasing competition from Australia’s aquaculture industry, particularly in providing popular fish products such as salmon and trout, has resulted in the fish segment decreasing as a share of revenue over the past five years. Sardines are the largest contributor to the industry’s fish production volumes, followed by tuna, shark and flathead.

Aquaculture outlook

In the face of ongoing declines in national and global fishing stocks, aquaculture is emerging as one of Australia’s most lucrative primary industries, accounting for just under 35% of all fishery production in Australia but approximately 45% of total fishery value, with production increasing at an annualised 4.1% over the past five years. The industry benefits from maintaining a more consistent supply of popular species, such as salmon, due to controlled farming environments. Salmon and trout account for nearly 50% of industry revenue, followed by tuna, edible oysters, pearl oysters, crustaceans, and other fish and molluscs.

However, the IBISWorld aquaculture report highlights rising industry operation costs, such as fuel and wage expenses, as key factors that are negatively affecting profit margins.