Australian fisheries and aquaculture outlook 2022

The gross value of Australian fisheries and aquaculture production (GVP) is forecast to recover strongly in 2021–22, growing by 10% to $3.55 billion, the highest level achieved since 2002–03. Strong growth in 2021–22 has been driven mainly by unanticipated strong growth in the prices of farmed salmonid and edible oyster product and farmed and wild-caught prawn product. Prices for salmonids are expected to grow by 37%, prices for prawns are expected to grow by 10% and prices for oysters are expected to grow by 3% in 2021–22. Price rises in 2021–22 are attributed to demand growth for seafood products after the steady reopening of economies, and rising input costs for fisheries and aquaculture operations as a result of continuing disruptions caused by the COVID-19 pandemic.

In international markets, salmonid price rises have been particularly acute. Australia’s export unit values were on average 46% higher over July to December in 2021 compared with the same period in 2020. Prices for traded salmonids are expected to remain high for the remainder of 2021–22 then fall to trend levels in 2022–23.

A growth of 0.4% a year is projected for Australian fisheries and aquaculture from 2022–23 to 2026–27, resulting in the value of production reaching $3.48 billion (real terms) by 2026−27 (Figure 2).

f ABARES forecast. z ABARES projection.
Source: ABARES

The projection for the industry is uncertain in the medium term. Export prices and volumes of key exported crustacean and mollusc products, including rock lobster and abalone, are projected to remain subdued over the outlook, compared with the years before the onset of the COVID-19 pandemic. These products are highly dependent on the China export market. Australia–China trade tensions continue and resolution over the outlook period is uncertain. Recovery in these segments could materially change the overall outlook for these sectors.

The global economic recovery from the COVID-19 pandemic is another key uncertainty. Macroeconomic indicators provide guidance on the rate of economic recovery that may influence industries, such as fisheries and aquaculture. Currently, ABARES assumes global economic growth to range between 2% and 4% over the medium term. Recognising this uncertainty, ABARES economic growth assumptions for the global economy present alternative upside and downside recovery scenarios. Both scenarios assume that global inflationary pressures will persist and pressure central banks to lift interest rates, and that the value of the Australian dollar will decline over the medium term.

The ‘faster recovery’ scenario assumes a gradual global relaxation of COVID-19-related restrictions and no new variants that require their reimposition. It also assumes that supply chain disruptions and inflationary pressures dissipate over the next 18 months.

The ‘slower recovery’ scenario assumes that global growth is significantly slowed by further COVID-19-related restrictions, inflationary pressures and supply chain disruptions in the short term, and that they continue to weigh on growth until around 2024–25.

The extent to which these scenarios are realised will affect the recovery path of Australia’s fisheries and aquaculture sectors, particularly in the short term, and the resulting effect on GVP. ABARES outlook for fisheries and aquaculture products assumes that the faster recovery scenario will eventuate but notes that the slower recovery scenario poses risks to this outlook.

The effects of COVID-19 are not expected to significantly change the structure of Australia’s fisheries and aquaculture sectors in the medium term. Australia is likely to remain an exporter of higher value seafood products and an importer of lower value seafood. Population growth and income growth will remain the key drivers of increased demand for seafood.

However, within a structurally stable setting, the industry is expected to undergo a range of adjustments—business-level adjustments to manage immediate risks and disruptions, longer term changes driven by consumer preferences in response to the pandemic, and an enhancement and reinforcement of trends observed before 2019–20.

Longer-term business-level responses to COVID-19 are expected to include a greater emphasis on risk mitigation, including a shift towards greater market diversification and an increased ability to adjust the market segments being targeted. This will require flexible supply chains to allow efficient pivoting between domestic and international markets, within domestic markets, and across different international markets. Such risk mitigation activities are not likely to be costless. Businesses will need to balance risk mitigation responses against concentration in high-value markets. The final impact on GVP may be fewer high-value years and more steady growth of the sector.

Shifts in consumer preferences are expected across the short to long term. Stockpiling of canned tuna and frozen seafood is expected to be a temporary change. Longer-term trends may include reduced discretionary expenditure at restaurants and other venues and higher purchases of food for at-home consumption. The scale of persistence of changed consumer behaviour will be influenced by the incidence and extent of COVID-19 outbreaks domestically and internationally, and regulatory responses by governments. It is uncertain when (or if at all) expenditure in these areas will return to pre-pandemic levels.

Pre-existing consumer trends have also been enhanced by COVID-19, such as increased online sales, more widespread online and direct to consumer marketing, and higher consumer demand for sustainability and traceability throughout the supply chain. These trends are expected to persist and producers are expected to adjust to serve changing market requirements.

Different sectors of Australia’s fisheries and aquaculture industry will be affected and influenced by these adjustments to varying degrees. The inherent characteristics of a sector—such as the export concentration, price points and supply chain dynamics—will determine the degree of impact and the potential for transformation.

Australia exports a significant share of its annual fisheries and aquaculture production by value, specialising in high unit value products for the Asian market. As a trade-exposed industry, the seafood sector is subject to trends in world markets and the effect of Australia’s exchange rate on the price received for export-oriented species and competing imports.

Australia’s reputation as a reliable and high-quality supplier of high unit value fisheries products, and its proximity to Asia’s seafood market, generally insulates Australia’s trade in fisheries products from longer-term shocks. The COVID-19 pandemic has significantly disrupted Australia’s usual trade, particularly for products that are highly export oriented, such as rock lobster and abalone. Sporadic commodity-focused trade issues with China have posed additional challenges for exporters and have affected the aggregate value of exports in 2021 and 2022.

The export value of fisheries and aquaculture products is expected to grow by 7% in 2021–22 to $1.34 billion, and by 3.6% in 2022–23 to $1.39 billion (Figure 3).

Over the medium term, growing incomes and populations in Australia’s export destinations will drive growth in Australia’s fishery export values. Between 2022−23 and 2026–27, real export value is projected to rise by 1.8% to $1.38 billion, with an average annual growth of 0.5% over this period.

COVID-19 has highlighted some supply chain issues facing the sector. Much of Australia’s seafood exports target the food services sector in Asia, mainly by air freight. Social distancing measures and restrictions on air travel during the COVID-19 pandemic negatively affected global food services and airline industries. As a result, since early 2020 many seafood exporters have used the Australian Government’s International Freight Assistance Mechanism to help lower the cost of exports. Over the medium term, transport logistic pressures are expected to ease, as international travel and tourism increases.

The fisheries and aquaculture sector’s reliance on specific markets in the north-east Asian region for exports is a risk that has been highlighted during the COVID-19 pandemic. The sector’s response to this risk and the extent to which it diversifies its export markets will help determine how the sector recovers and repositions itself after the pandemic.

The decline in export values over 2019–20 and 2020–21 was partly because of some parts of the sector showing a willingness to explore new markets, including pivoting to domestic markets using new or alternative selling platforms. Australian markets may not be perfect substitutes for many high-value and growing Asian markets, but some diversification away from export markets to domestic ones is occurring and is expected to continue over the medium term as producers seek to balance risk. The shift towards online consumer sales, both domestically and internationally, observed during the pandemic is expected to continue over the outlook period.

f ABARES forecast. z ABARES projection.
Source: ABARES

f ABARES forecast. z ABARES projection.
Source: ABARES

z ABARES projection.
Source: ABARES

In line with the global rise in aquaculture production since the early 2000s, Australia’s aquaculture sector has been steadily increasing its real value and proportional share of fisheries and aquaculture production volume and GVP (Figure 5 and Figure 6). The growth of Australian aquaculture has been driven largely by an increase in salmonid production and a declining trend in wild-caught production. More recently, the aquaculture sector has been broadening the composition of species produced—with an increased emphasis on prawns, abalone, oysters and finfish varieties, including barramundi and kingfish.

The real GVPs of the aquaculture sector and the wild-caught sector were approximately equal in 2019–20. In 2021–22 aquaculture GVP is expected to be the dominant segment of the seafood industry, hitting a peak production value of over $2 billion for the first time (Figure 4 and Figure 6).

f ABARES forecast. z ABARES projection.
Source: ABARES

Over the medium term, favourable demand conditions are expected to result in growth in salmonid aquaculture GVPs through growth in domestic prices. Higher production volumes of aquaculture abalone, prawns and oysters will also contribute to growth in the sector. Resumption of favourable demand-side conditions is expected as the economic and public health shocks of COVID-19 begin to dissipate and consumer confidence returns.

f ABARES forecast. s ABARES estimate. z ABARES projection.
Source: ABARES

The COVID-19 outbreak in China coincided with the peak export period for Australian rock lobster, the Chinese Lunar New Year celebration. In January 2020 the COVID-19 outbreak in China resulted in export orders falling significantly (Mobsby, Steven & Curtotti 2020). Moreover, rock lobster consignments to China have been disrupted because of continuing trade tensions with the region since November 2020 (Mobsby, Steven, Curtotti & Dylewski 2021). The resultant collapse in export demand and limited opportunities for alternative markets are forecast to result in production value for rock lobster falling further in 2021–22, to $380 million (in real terms) (Figure 7). This market shift has been reflected in a significant decline in export unit values, from $92 per kg in 2018–19 to a forecast $50 per kg in 2021–22. The decline has resulted in production value falling to around 50% of its pre-pandemic level. Despite an expected recovery of production volumes over the medium term, the outlook for price recovery remains highly uncertain.

China accounted for around 91% of Australian rock lobster exports in 2019 and 2020. The resumption of rock lobster exports to China is the key uncertainty for the forward projections. Over the next 5 years rock lobster exports to China will depend on Chinese demand, especially during the Lunar New Year period, and the resumption of trade with China. Recent COVID-19 outbreaks in China, resulting in recommendations to limit travel during the Lunar New Year period and potentially leading to voluntary social distancing, are likely to limit recovery prospects for export performance over the outlook period (Figure 8).

In Australia, rock lobster is typically consumed at restaurants and other venues. Australian food service expenditure can be expected to increase over the outlook period and support some limited recovery in domestic demand for rock lobster. Domestically focused marketing campaigns also assisted with home-based demand over the Australian Christmas period. Over the outlook period the diversification of some production towards the domestic market is expected.

Most Australian rock lobster production is output controlled and managed across both state governments and the Australian Government. Over the 5 years to 2026−27, wild-catch production volume is expected to increase moderately.

For production values, price changes—largely determined by export demand changes and exchange rate movements—will be the key driver. Rising incomes in export markets other than China, especially elsewhere in Asia, could provide diversification opportunities. However, these markets are smaller than the Chinese market and focus on lower-priced products (such as frozen tails rather than live exports).

Ultimately, over the projection period the production value of rock lobster is not expected to recover to 2018–19 values. Instead, it is expected to remain at pre-2018–19 values for the coming years.

f ABARES forecast. z ABARES projection.
Source: ABARES

f ABARES forecast. s ABARES estimate. z ABARES projection.
Source: ABARES

Global salmonid production (including salmons, trouts and smelts) mostly comes from aquaculture, having exceeded wild-catch production in the 1990s. In 2018 aquaculture represented 69% of global supply (FAO 2020).

Australia’s salmonid aquaculture industry is predominantly located in Tasmania, contributing over 90% of Australia’s salmonid production in recent years. Salmonid production has been on an upward trajectory since the early 2000s. Most production has been targeted to servicing the domestic market, but in recent years the share of product exported has increased.

In 2021–22 the value of salmonid production is forecast to increase by 34% to reach a peak of $1.36 billion, driven mainly by higher unit prices received by producers (Figure 9). Average farmgate prices are estimated to rise by 37% during 2021–22, to peak at $16.35 per kilograms, reflecting higher international prices for salmonids and growing demand in Australia. Higher salmonid prices in 2021–22 follow a period of lower prices as the COVID-19 pandemic lockdown measures contributed to lower demand and market uncertainty, especially in the food service sectors. Global demand has increased rapidly in 2021–22 as markets recover after the easing of strict lockdown measures and social distancing requirements, with global production adjusting to improved market conditions.

Major salmonid-producing regions such as Norway and Chile experienced supply constraints in late 2021 and early 2022 as a result of COVID-19, putting pressure on prices in the short term. Supply has been restricted because of higher transportation costs and ongoing logistical issues in moving product to markets. These issues delay output, decreasing production margins and increasing market uncertainty. As salmonid production cycles last typically 2 to 3 years, uncertainty is disruptive and has led to lower-than-normal stock volume during a period of high demand. High international prices are expected to transmit into the domestic markets and persist for the remainder of 2022.

The price received from Australian salmonid exports rose 46% in the first half of 2021–22, following low prices during 2020–21. However, as supply improves internationally and the market becomes less volatile, prices are expected to decline in 2022–23 then remain steady over the medium term.

Domestic salmonid production is estimated to have decreased by 1.5% in 2021–22 after a 26% rise in 2020–21. Production is projected to be maintained at around 84,000 tonnes from 2022–23 to 2026–27 (Figure 10).

Salmonid consumption per person in Australia has remained stable over the last 5 years so higher production volumes have increasingly been exported. The share of production volume exported has risen from 10% in 2016–17 to an estimated 35% in 2021–22. Diversification into exports has therefore been beneficial during the COVID-19-induced market disruption. Competition in world markets, and increased input costs leading to tighter margins for exports, is expected to lead to a more stable export share over the medium term, averaging 36% of production volumes from 2022–23 to 2026–27.

Over the medium term, prices are expected to return to trend levels, dampening the positive effect of moderate rises in production volumes on gross value of production. From 2022–23 to 2026–27, salmonid production value is projected to grow an average 1% a year, reaching $1.2 billion by 2026–27.

f ABARES forecast. z ABARES projection.
Source: ABARES

f ABARES forecast. s ABARES estimate. z ABARES projection.
Source: ABARES

Australia produces mainly wild-caught abalone. Aquaculture is projected to underpin most of the growth in abalone over the medium term. Wild‑caught volumes are expected to remain constrained by total allowable catch limits.

The value of Australian abalone production has been declining since 2003–04. This downward trend is projected to stabilise between 2021–22 and 2026−27, and real GVP is projected to increase to $140 million by 2026−27 (Figure 11). Within this period, aquaculture abalone’s share of total Australian abalone production volume is forecast to increase. This increase continues a long-term trend, from a negligible contribution in 2000–01 to a forecast 38% of total production volume by the end of 2026−27 (Figure 12).

In China, the main export market for Australian abalone exports, demand for abalone in restaurants has also been lower because Chinese consumer expenditure remains weak. The effect of COVID-19 in China is expected to negatively affect abalone prices until isolation measures are reduced.

In particular, demand for live abalone has been subdued because of COVID-19-related social distancing in China affecting restaurant trade (Hayes, Prendergast & Breen 2021). The industry has responded by diversifying product offerings to other options, such as frozen and preserved abalone, and moving to new markets.

Before COVID-19, Australian abalone unit export prices grew steadily. In 2018–19 they reached the highest average level in real terms since 2006–07. Increased export unit prices reflected growing demand for abalone in China and an annual reduction in tariffs on Australian abalone exports entering China since the China–Australia Free Trade Agreement entered into force in December 2015. Since 2019 the tariffs on Australian abalone exports to China have been zero. Australia produces abalone species not native to China, and these wild-caught species attract a premium in China, especially if delivered as live product.

f ABARES forecast. z ABARES projection.
Source: ABARES

f ABARES forecast. s ABARES estimate. z ABARES projection.
Source: ABARES

The Australian tuna industry is highly export oriented, particularly for premium tuna species (including southern bluefin tuna, yellowfin tuna and bigeye tuna), and concentrated on the Japanese market. Southern bluefin tuna is the major tuna species produced in Australia, with most of the catch ranched in South Australia and exported to Japan.

The value of Australian tuna production is forecast to fall by 14% to $133 million in 2021–22, driven by lower production of southern bluefin tuna. Total tuna production value is forecast to grow over the projection period to $173 million in 2026–27, driven by higher tuna export prices (Figure 13). Tuna catch volumes are anticipated to remain steady in the medium term in an environment of southern bluefin tuna stock rebuilding and stable biomass of other tuna species (Patterson et al. 2021).

The value of Australian tuna exports during the peak export season of July to September declined by 22% in 2021 compared with 2020. This decrease reflects significantly lower volumes in key export markets, mainly Japan, offsetting stronger prices. It is consistent with global imports of fresh and air-flown tuna remaining low as scheduled international flights are yet to resume and high sea-freight rates increase import costs (FAO 2021).

Increased tuna consumption is a key driver of forecast tuna export growth over the projection period, from $113 million in 2021–22 to $150 million by 2026−27 (Figure 14). Increased demand for non canned tuna and increased sales opportunities in the hotel, restaurant and catering sector—particularly in Western markets—are expected over the medium term, underpinned by an easing of global supply chain disruptions.

Japanese consumer behaviour remains a key risk to the tuna outlook. It is influenced by consumer demand shifting towards lower cost frozen fillets of sashimi tuna and younger consumers’ preferences shifting away from seafood to non-seafood protein sources (Campling, Antony & McCoy 2017). Potential exists for export market diversification of Australian high‑grade tuna, although how much alternative export markets can absorb Australia’s diverted Japanese trade will depend partly on their own recovery from the COVID-19 pandemic. The extent to which the Australian domestic market can absorb premium tuna at a price comparable to export prices is uncertain.

f ABARES forecast. z ABARES projection.
Source: ABARES

f ABARES forecast. s ABARES estimate. z ABARES projection.
Source: ABARES

Global production of prawns is forecast to rise by 10% to reach 5 million metric tonnes in 2022 (Chase 2022). This growth reflects recovery after the COVID-19-based disruptions of global travel, food service and accommodation sectors. Price recovery in 2021 and early 2022 has been strong. Wholesale prices in New York for shrimp exported from the west coast of the United States (a global benchmark price for globally traded prawns) increased by 26% between January 2021 and January 2022 (Mundi 2022). Driven by strong demand, and higher fuel and freight costs, these higher-than-average prices are expected to continue for the remainder of 2022.

Australia produces a relatively low volume of prawns, but exports comprise several high unit value species. The higher-than-average global prawn prices during the latter part of 2021 led to higher unit export returns for Australian exporters, and unit returns of prawn exports are estimated to increase by 2% in 2021–22 (Figure 16). The value of Australian prawn production is projected to remain stable through to 2026−27 (Figure 15). Most local production is expected to supply local markets.

Australia imports a significant quantity of prawns to meet domestic demand, but these imports are generally of a lower unit value than prawns produced domestically. Therefore, rising global prices for prawns has meant that domestically produced prawns have become more competitive in the domestic market.

Most Australian prawn production is wild-caught, but the share of aquaculture prawns is increasing. A planned large-scale prawn farm in northern Queensland is expected to add between 2,000 tonnes and 2,500 tonnes to aquaculture output over the outlook period, contributing around 10% of annual Australian prawn production over this period. Another project in the Northern Territory could significantly increase aquaculture prawn production beyond projections if the farm becomes operational over the outlook period.

f ABARES forecast. z ABARES projection.
Source: ABARES

Campling, L, Antony, L & McCoy, M 2017, The Tuna Longline Industry in the Western and Central Pacific Ocean and its Market Dynamics, Pacific Islands Forum Fisheries Agency, Honiara.

Chase, C, 2022, Global shrimp production to surpass 5 million tonnes in 2022, CP Foods’ Robin Mcintosh predicts, Seafood Source, accessed 20 January 2022.

FAO 2020, FishStatJ – Software for fishery and aquaculture analysis on world fish trade [dataset], Food and Agriculture Organization of the United Nations, Rome.

FAO 2021, Non-canned tuna market revived but weakened for canned and processed tuna, Food and Agriculture Organization of the United Nations, Rome.

Hayes, J, Prendergast, J & Breen, F 2021, Seafood industry hopes at-home COVID-19 cooking in China will soften blow of lobster trade woes, Australian Broadcasting Corporation, accessed 12 February 2021.

Mobsby, D, Steven, AH & Curtotti, R 2020, Australian fisheries and aquaculture outlook 2020, ABARES, Canberra, March.

Mobsby, D, Steven, AH, Curtotti, R & Dylewski, M 2021, Australian fisheries and aquaculture: Outlook to 2025–26, ABARES research report, Canberra, March.

Mundi 2022, Index Mundi Shrimp monthly price, Index Mundi, accessed 18 February 2022.

Patterson, H, Bromhead, D, Galeano, D, Larcombe, J, Woodhams, J and Curtotti, R 2021, Fishery status reports 2021, Australian Bureau of Agricultural and Resource Economics and Sciences, Canberra.