January 17, 2005

 

 

Australian Report Optimistic On Seafood Demand

 

An Australian report has expressed optimism on domestic demand for seafood, saying that it will increase strongly over the medium to long term.

 

As many consumers regard fish as a superior product, per capita demand is likely to increase with average real disposable incomes.

 

Potential for the export of processed seafood from Australia is limited by supply rather than by competition.

 

In terms of revenue, IBISWorld forecasts that during the five years to 2008-09, Australian seafood processing industry revenue will increase at an average annual rate of 3.1% to $1.75 billion (in constant 2002-03 prices).

 

There is some potential for increased finfish production, but this exists mainly in more remote deep-sea areas, which are expensive to exploit and which are likely to yield relatively unknown varieties of fish. Such varieties will likely to bring lower prices.

 

IBISWorld also forecasts that the value added to the industry grow at an average annual rate of 3.6% during the five years to 2008-09, rising to $390.7 million.

 

This value added growth is expected to improve marginally during this outlook period since little new investment in processing infrastructure is expected.

 

The level of employment is forecast to grow slowly but steadily during the outlook period, rising from an estimated 4,317 people to 4,513 at the end of this period. This will be driven by a steady rise in revenue, but constrained by capital investment in manufacturing machinery accounting for most production gains.

 

On the global trade front, exports are predicted to fall by an average rate of 0.3% per year during the next five years, down to $671 million in 2008-09.

 

While demand for seafood picks up in Asia during 2004-05, exports are anticipated to rise in terms of volume but a stronger Australian dollar will cause local exports of processed seafoods to fall in value - down by an estimated 5% to $646.9 million and their share of revenue down 3.6 percentage points to about 41.6%.

 

Industry profitability is expected to stabilise during 2004-05 as revenue gains are more than cancelled out by rising input costs. IBISWorld expects that the industry profit ratio will slowly rise to 16.2% by June 2009.