Forecast to 2022-23
David Mobsby, Andrea Bath, Robert Curtotti
From 2018–19 to 2022–23 the value of Australia’s fisheries and aquaculture production is projected to rise by 4 per cent in real terms to reach $3.1 billion (in 2017–18 dollars).
- Salmonid aquaculture production, primarily for domestic consumption, is projected to contribute most to gross value of production, averaging $858 million annually (in 2017–18 dollars) from 2018–19 to 2022–23.
- Between 2018–19 and 2022–23 the value of Australia’s fishery product exports is projected to decline marginally in real terms to around $1.5 billion (in 2017–18 dollars).
- Rock lobster, abalone, tuna and prawns are projected to contribute most to fisheries product export value across the medium term (2018–19 to 2022–23). Between 2018–19 and 2022–23 these commodities will account for around 80 per cent of export value.
Over the outlook period to 2022–23, the value of Australia’s fisheries and aquaculture production is projected to increase by 4 per cent in real terms to $3.1 billion (in 2017–18 dollars). This increase will be supported by growth in Australia’s aquaculture sector, particularly for salmonids.
Rock lobster, the most valuable wild-caught species produced in Australia, is projected to increase in production value and remain the second most valuable fisheries and aquaculture species, after salmonids.
Over the medium term, the value of Australia’s fisheries product exports is projected to decline marginally to around $1.5 billion in real terms (in 2017–18 dollars). Rock lobster, abalone, tuna and prawns will remain the most valuable fisheries product exports, accounting for around 80 per cent of export value over the outlook period.
Over the medium term, prices received for fish species caught in Australian fisheries are projected to remain more stable compared with price movements between 2004–05 and 2016–17. This reflects an assumed stability in the Australian dollar exchange rate over the medium term. Over the medium term, the assumed exchange rate is expected to support prices in export markets and limit competition in the local market from fish product imports. These factors are likely to result in low levels of price volatility for products sold on the international and domestic market.
Seafood consumption to 2022–23
The OECD-FAO (2017) agricultural outlook projects that global seafood consumption will rise by 13.0 million tonnes over the medium term to 189.8 million tonnes by 2023. Growth in seafood consumption is projected to be met largely by increased aquaculture production, which will grow to 96.2 million tonnes by 2023. Income and population growth will drive increased seafood consumption in key seafood-consuming regions in Asia, particularly China (with 7.6 million tonnes growth between 2017 and 2023), Indonesia (1.2 million tonnes) and India (1 million tonnes). However, the pattern of growth in seafood consumption in these regions is likely to be influenced by some key trends. Rising numbers of urbanised and high-income communities in Asia’s larger cities will increase the pressure on supply chains to deliver fresh seafood using more convenient selling platforms. Increased online selling of seafood and selling through supermarkets is expected as consumers in urban areas opt for convenience. Consumers are also likely to become more discerning about the provenance of seafood. Sellers may respond by adopting technologies and processes that prove their supply chains are ethical and sustainable.
Australia’s export seafood supply chains are well positioned to adapt to changes in seafood markets. Recent tariff reductions under Australia’s free trade agreements with China, the Republic of Korea and Japan are expected to support export demand for Australian fisheries products over the medium term. Relatively stable exchange rates would also help Australia maintain market share in the key seafood-consuming regions in Asia. Many of Australia’s larger seafood enterprises have processes in place to ensure sustainability, and Australia’s robust fishery management systems help provide assurance to international buyers that Australian seafood is a quality sustainable product.
In Australia, per person consumption of seafood has been relatively stable in recent years, averaging 14.5 kilograms over the decade to 2015–16. However, seafood marketing in the domestic market is becoming increasingly sophisticated. Over the medium term, marketing is expected to continue to focus on seafood as a healthier alternative to other forms of protein. Seafood is featuring more prominently on supermarket shelves, with innovations in packaging making the product more attractive for consumers. Online selling of seafood is also increasingly being used to bring seafood to consumers, particularly in large Australian coastal metropolitan centres where retailers have access to fresh seafood and suitable transport infrastructure.
Key species outlook
Between 2006 and 2015 global lobster production increased by 22 per cent to 310,571 tonnes. Canada and the United States accounted for most of the growth in world output during that period (FAO 2018). Over the same period the value of lobster exports from Canada and the United States increased by US$879 million in real terms to US$2.4 billion (in 2017 US dollars)(UN Statistics Division 2018). Between 2012 and 2016 the value of lobster exports to China from Canada and the United States more than tripled to US$231 million, driven largely by abundant supplies of relatively cheap lobster from North America (FAO 2017b).
The value of Australian rock lobster production is forecast to rise by 5 per cent in 2018–19 to $678 million, reflecting increased production and higher average beach prices. The value of rock lobster exports is forecast to rise by 4 per cent in 2018–19 to $703 million, in line with production and assumed movements in the Australian dollar exchange rate. The Australian dollar exchange rate and import demand from Asia are expected to be key influences on beach prices over the medium term. In particular, increased demand for rock lobster from a growing middle class in China is anticipated to increase lobster import demand to that market. Australian rock lobster exports to China will be supported by a reduction in tariffs. Under the China–Australia Free Trade Agreement, Australian exports of unfrozen rock lobster to China will attract a tariff of 3 per cent in 2018 (a 3 percentage point reduction on 2017) and will be admitted duty-free from 2019 onwards. However, the assumption of a relatively stable Australian dollar and export competition for this market, particularly from North American exporters, is expected to limit increases on beach prices.
World prawn production is estimated to have been 8.3 million tonnes in 2015 (FAO 2018). Since 2008 most global prawn production has been sourced from the growing aquaculture sector, particularly from farms in Asia. Shrimp and prawns are a major globally traded seafood product group and in 2015 were the second most valuable seafood product group, after salmonids (FAO 2017a).
Australia is a relatively minor producer of prawns but supplies and exports a range of high-quality species. Australia also imports a significant quantity of prawns to meet domestic consumption. Between 2012–13 and 2016–17 Australian exports of prawns averaged $98 million and imports averaged $421 million (in 2017–18 dollars). Australian prawn exports tend to be high unit value products, but imports are typically more processed and have lower unit values. Australian exports and imports target different market segments.
In 2018–19 the value of Australian prawn production is forecast to rise by 6 per cent to $375 million and export value to rise by 8 per cent to $112 million. This forecast is supported by an expected increase in wild-caught production, reflecting an assumed return to an average level of tiger prawn catch in the Commonwealth Northern Prawn Fishery from the below average level of catch estimated for 2017–18. Most of Australian prawn production is wild-caught, but the share of aquaculture-produced prawns is increasing. From 2006–07 to 2015–16 the share of production volume derived from farmed prawns increased from 16 per cent to 19 per cent. Queensland aquaculture production typically accounts for over 90 per cent of Australian farmed prawn production volume. In 2016–17 prawn farms in the Logan River region of southern Queensland were destocked following an outbreak of white spot disease. This is expected to have a significant impact on output in affected regions, particularly in 2017–18. However, production in non-affected regions is expected to increase. Farms in the affected region will lay fallow until 31 May 2018 (Biosecurity Queensland 2017).
Over the medium term, aquaculture prawn production is projected to rise, supported by an expected production recovery in farms recently affected by white spot disease. In contrast, wild-caught prawn production is expected to remain largely unchanged. A planned large-scale prawn farm in the Northern Territory could significantly increase aquaculture prawn production beyond projections if the farm becomes operational over the outlook period. The value of Australian prawn production is projected to be lower in real terms in 2022–23 compared with 2018–19. This reflects the outlook for lower average unit values in real terms over the projection period more than offsetting projected increased production.
World abalone production increased by around 111,000 tonnes from 41,128 tonnes in 2006 to 151,973 tonnes in 2015 (FAO 2018). This was driven by an increase in aquaculture abalone production from 25,638 tonnes in 2006 to 141,871 tonnes in 2015. Much of the global increase occurred in China, where production rose by 108,011 tonnes to 127,967 tonnes between 2006 and 2015. While global aquaculture abalone has grown substantially, the volume of wild-caught abalone has continued to fall. Between 2006 and 2015 wild-caught abalone production fell from 15,490 tonnes to 10,102 tonnes, driven partly by declining global wild-catch stocks and restrictive quotas (Cook 2016). Despite the reduction in global wild-caught production, global prices of abalone have gradually fallen, reflecting increased global supply of aquaculture-produced abalone.
In 2018–19 the value of Australian abalone production is forecast to remain largely unchanged at $170 million. A forecast increase in the value of aquaculture-produced abalone will be offset by a forecast decline in the value of wild-caught abalone. Australian aquaculture abalone production has risen significantly over recent years (increasing by 62 per cent to 757 tonnes between 2006–07 and 2015–16) and is expected to continue to expand over the medium term. In contrast, wild-caught production declined by 32 per cent between 2006–07 and 2015–16. Over the medium term, wild-caught volumes are expected to remain constrained by the assumption of conservatively set total allowable catch. By 2022–23 the value of Australian abalone production is forecast to increase to $174 million (in 2017–18 dollars), reflecting growth in aquaculture production.
Australia produces species of abalone not produced in China. This should support Australian exports to major trading partners over the medium term. Under the China–Australia Free Trade Agreement, exports of abalone from Australia to China will be admitted duty-free from 2019 onwards. Despite being the world’s largest producer of abalone, China has become an increasingly important export market for Australian abalone. Reduced barriers to trade should support exports to this market. In 2022–23 the value of Australian abalone exports is projected to be $195 million (in 2017–18 dollars).
Global production of salmonids (including salmon, trout and smelt) reached 4.5 million tonnes in 2015. The largest producers—both through aquaculture— are Norway (31 per cent of global production) and Chile (18 per cent) (FAO 2018). In contrast, Australia accounted for only 1 per cent of global production.
In 2016 production issues in Norway and Chile contributed to a global supply shortage. Norwegian farmed salmon were affected by an outbreak of sea lice. In Chile, algae blooms caused mass fish deaths. As a result of the supply shortage, international salmonid prices increased during 2015–16 and 2016–17.
During 2016–17 high international prices for salmonids resulted in an estimated increase in Australian domestic prices, increasing total production value to $740 million despite an 8 per cent decline in production volumes. As international supply returns in 2018–19, a forecast decline in international prices will have a flow-on effect on domestic prices. In 2018–19 total domestic production is forecast to increase by 3 per cent to 59,165 tonnes ($812 million).
Australia exports a relatively small proportion of Australian salmonid production. In the decade to 2016–17, an average of 12 per cent of production was exported. In 2018–19 the volume of salmonid exports is forecast to decline by 5 percent to around 10,300 tonnes, as a results of falling international prices. The value of exports is forecast to fall from the high of $119 million in 2017–18 to $112 million in 2018–19.
By 2022–23 salmonid production is forecast to increase to 71,600 tonnes. This represents a more conservative growth level of salmonid production compared with previous years of growth as producers adjust to environmental restrictions. To support production levels, Tasmania’s main salmonid producers are exploring alternative sites for farmed salmon at Bruny Island, Storm Bay and Okehampton Bay. The value of Australian salmonid production is projected to reach $910 million (in 2017–18 dollars) by 2022–23. Export volumes in the medium term are forecast to decline by 9 per cent from the higher levels of 2018–19 (around 10,300 tonnes) as international prices decline. However, expanding domestic production will support export volumes remaining high compared with historical levels at around 9,400 tonnes in 2022–23. In 2022–23 export earnings are projected to decline to $95 million (in 2017–18 dollars) in line with lower export volumes.
Global tuna production includes large volumes of the major species skipjack, yellowfin and bigeye tuna, as well as smaller volumes of species such as albacore and southern bluefin. Each species has a distinct tuna market that determines value. Skipjack is the largest in terms of volume for global production. It is used primarily in the canned tuna market and a large portion is processed in Thailand. As a result of low production and labour costs for canning in South-East Asian countries, Australia does not compete in the canned market. However, Australia is competitive in fresh and frozen premium tuna markets for species such as southern bluefin, yellowfin and bigeye.
Most of Australia’s tuna production is from the Southern Bluefin Tuna Fishery (SBTF) in South Australia. Smaller quantities are produced at the Eastern Tuna and Billfish Fishery (ETBF), which extends from Cape York in Queensland to the South Australian/Victorian border. Tuna species from the ETBF include albacore, yellowfin and bigeye. Southern bluefin tuna from the SBTF are caught as wild juveniles using purse seine methods and then fattened in farms near Port Lincoln, South Australia. Australian tuna production is estimated to increase in 2018–19 to 13,382 tonnes, driven by an increase in the total allowable commercial catch for the SBTF. The value of production is forecast to increase in 2018–19 to $183 million, driven by the tuna export market.
Between 2006–07 and 2016–17 Australia exported on average around 10,800 tonnes of tuna a year. Exports are primarily southern bluefin tuna destined for the Japanese sashimi market. Export volumes are anticipated to rise in 2018–19 along with production volumes, increasing by 5 per cent to 11,900 tonnes. Export prices in 2018–19 are forecast to rise by 8 per cent to $166 million due to an assumed weakening of the Australian dollar against the yen.
Over the medium term, the volume of tuna production is expected to remain steady at around 13,400 tonnes. The total allowable commercial catch for the Australian SBTF is determined by an international governing body, the Commission for the Conservation of Southern Bluefin Tuna. This ensures the global southern bluefin tuna fishery is being utilised sustainably. The commission has set the total allowable commercial catch for Australia at 6,165 tonne per annum through to 2020. A similar level of total allowable commercial catch is assumed for the remaining forecast period to 2022–23. However, this represents a conservative level, with potential for the total allowable commercial catch to increase beyond 2020. The value of production is projected to decline from 2018–19 to $176 million (in 2017–18 dollars) in 2022–23. Export volumes are estimated to remain at similar levels to 2018–19, reaching 12,100 tonnes in 2022–23. In contrast, export value is estimated to decline by 3 per cent in real terms. Lower prices are projected in the medium term due to longer-term trends of lower tuna imports and lower consumption per capita of seafood in Japan.
Biosecurity Queensland 2017, White spot disease industry update number 34, Department of Agriculture and Fisheries, Brisbane.
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