Stockpile freezes rock lobster trade

BIG inventories of frozen rock lobster and jitters in the Japanese market are undermining the benefits of the falling Australian dollar for WA’s fishermen.

Coming off a record year, when a massive 14,500 tonnes of rock lobster fetched historically good prices, the industry is struggling to sell into its favourite markets at prices that are well below last year’s in US dollar terms.

The difficult conditions have come as the industry sees a few internal changes, with the Fremantle Fishermen’s Cooperative striking a deal with New Zealander George Stavrinos who is intent on picking up boats within the cooperative’s southern stronghold as well as the zone traditionally dominated by its Geraldton-based rival.

The Fremantle processor is also still formulating plans for a possible restructuring of its ownership.

However, most processors are focused on marketing during a time when economic concerns have hit the live trade severely and other regular buyers are out of the market as they try to quit a big overhang of frozen product from last year.

Western Rock Lobster Development Association executive director Tony Gibson described the market conditions as pandemonium.

“If you could negotiate, the Australian dollar would be fabulous, but inventory is still high in Japan and we can’t get sales,” Mr Gibson said.

Confident the market would pick up, he said the beach price was still high given the market conditions, averaging around $24kg compared to $25kg-$26kg, as fisherman looked at catching about 20 per cent below last year’s record.

Mr Gibson said many buyers were waiting to see how the vital Abrolhos region shapes up when it hits its peak in a week or so.

Geraldton Fishermen’s Cooperative chief executive Derek Smith confirmed the industry was paying the price for a record haul last year combining with difficult economic conditions in key markets.

“One of the problems last year has given us is the amount of unsold stock left in the marketplace,” Mr Smith said.

He said the Geraldton cooperative had not been left with big inventories of its own after a strong year during which the organisation generated a 57 per cent jump in operating profit after tax to $1.6 million on the back of an 11 per cent rise in revenue to $98.1 million.

Mr Smith, who has been with the cooperative for about a year, said he was aware of Mr Stavrinos’ efforts to recruit boats in the northern region but was not concerned about the development. Fremantle cooperative president Vito Paparella said market conditions had dropped off in February, which had been a quiet month.

“It is down on last year, that is not a surprise. People may have some concern about Japan.” Mr Paparella said.

He said the arrangement with Mr Stavrinos was simply to process catches from boats recruited by the New Zealander, a third party arrangement the processor had conducted with others in the past to leverage production capacity.

Mr Paparella said it was too early to talk about proposals to restructure the business to allow members to take advantage of capital gains and trade shares more easily.

He said a vote on the issue would come “down the track” but something could be put to the members at the next AGM if the board was happy with any proposals put forward by general manager Glenn Bosman.

“The jury is out at the moment. Glenn is away at the moment. He will come back and make recommendations, you have to get into the pros and cons of everything.”