Costs crunch could hit lobster catch

Predictions of a below-average catch and rising costs are likely to make this season a challenging one for both fishermen and processors.

The Department of Fisheries WA has forecast a 9,800-tonne catch for the 2006-07 season, which starts next week, down 10 per cent on last year and almost 15 per cent below the five-year average.

The reduced catch is expected to lead to higher prices ex-vessel, a rise that will be passed down to consumers and will almost certainly lead to a drop in demand in this highly price-sensitive market.

Fisheries principal management officer, Kevin Donohue, said a 22 per cent rise in fuel prices in 12 months, wage increases and interest rate rises all signalled difficult times ahead for the $300 million industry.

“It would appear that the western rock lobster fishery is facing challen-ging times as a result of ongoing cost price pressures, similar to those faced by other primary commodity producers,” Mr Donohoe said.

“The industry will need to operate more efficiently and/or increase prices to maintain profitability.”

Rising costs and narrowing profit margins have been flagged as the main drivers behind the rationalisation in the rock lobster processing industry in recent months.

In October, the Jaybow Lobster Australia joint venture was formed between Lobster Australia, owned by Kailis and France Group, and James Bowes Pty Ltd, owned by the Craig Mostyn Group.

In the same month, lobster processor Bluwave, merged with WA Seafood Exporters.

Jaybow Lobster Australia chief executive Chris Perrott said the competitiveness of the market had reduced returns to processors.

“The processing sector of the lobster industry has been very tight over the last few years, and it’s rationalisation and improvement of size of catch, and greater volumes, which reduces per unit costs,” Mr Perrott said.

The joint venture brought together both parties’ processing operations in different fishing zones, with Lobster Australia’s main facility in Fremantle and James Bowes’ facility in Geraldton.

“[James Bowes] have a state of the art processing plant in Geraldton, and we have one in the south, so it’s very complementary,” Mr Perrott said.

Geraldton Fisherman’s Cooperative general manager Wayne Hosking said the group was expanding its live lobster holding facility in Rous Head, Fremantle, tripling live product capacity to take advantage of the growth in the Chinese market.

“We’ve seen very significant growth there over the last three years, and we’re expecting that to continue,” Mr Hosking told WA Business News.

The cooperative, whose membership comprises one-third of the state’s commercial lobster fleet, is expecting to increase its share of the state’s total catch, from 28 per cent last year to 33 per cent this year.

“Our job, irrespective of what’s going on around us, is to maximise returns for fishermen. If we’re doing it well, it makes life difficult for our competitors,” Mr Hosking said.

“We’re very comfortable with the direction were heading in…and we’re experiencing growth in our supply. What the others need to do to remain competitive is up to them.”

Another issue facing the industry is the proposal to develop a lobster aquaculture industry in WA.

Fisheries released a possible aquaculture model that grants private parties access to puerulus (lobster under the current standard size limit of 76mm) for harvesting.

Western Rock Lobster Council executive director Steve Gill said any lobster aquaculture industry model should consider the implications on the sustainability of the fishery, and its potential effects on the wild catch.

“Over the past 40 years, [fishermen] have been making an effort to ensure the fishery is sustainable,” Mr Gill said. “Any removal of puerulus could affect sustainability of the industry.”

He said growing western rock lobster puerulus was currently economically unviable, unlike lobster aquaculture ventures in countries such as Vietnam, which harvested a tropical lobster species with a much faster growth rate.