The Australian Prawn Market, As Good As it Gets?

1. The Australian Prawn Market, As Good As it Gets?

2. Prawn Market • My background in the NPF started with employment with Craig Mostyn Co Ltd in 1971 and prior to that their history involve “old man Mostyn” • May 1963, CSIRO, Commonwealth Department of Primary Industry, Queensland Department of Harbours & Marine along with Craig Mostyn agree to undertake joint survey carried on for 2 years with the small catches processed in Karumba • The gulf prawn “rush” commenced in 1965 & 1966 and the by 1967 the fleet had grown to 12 • By 1969 there were more than 30 trawlers • From 1971 onwards saw the transition from “wet boats” to well equipped steel trawlers • 1974 produced the largest Banana catch exceeding 12,711MT with prawns sent to off-shore for processing as domestic facilities unable to cope with the volume • CM philosophy was to process and produce rather than increase the ownership of vessels – that ultimately was their downfall and resulting leasing the facilities to Markwell Fisheries for several years as they exited the fishery

3. Prawn Market • Whilst developing the fishery CM failed to foresee the change and the development of • Demise of “wet prawns” • Frozen Bulk export trade • Off-shore processing • Difficulties operating in remote locations • Limited understanding of the target market and culture • Exclusive marketing arrangements with trade alliances with Taiyo (Maruha Nichiro) in Japan included reciprocal supply agreement of Hake and Fishmeal from their factory ships operating in South African waters • Committed to processing in Australia • Trade opportunities with China – reciprocal trade of Tallow and importation of “Taisho Prawns” as PUD and PUDTO • Trying to process in those early days proved difficult and in remote areas with labour shortages and infrastructure issues ultimately proved impossible to compete with alternative processing facilities throughout the East Coast and South Australia and ultimately sold out to A Raptis & Sons Pty Ltd who processed in Karumba for just 1 season

4. Prawn Catches in the NPF • 1970-1979 Banana 5,214 Tiger 1,885 188 vessels • 1980-1989 Banana 3,904 Tiger 4,237 vessels 248 • 1990-1999 Banana 3,863 Tiger 2,136 vessels 144 • 2000-2009 Banana 4,139 Tiger 1,711 vessels 87 • 2009 Banana 5,881 Tiger 1,250 vessels 55 • 2010 Banana 5,642 Tiger 1628 vessels 52 • 2011 Banana 7,626 Tiger 810 vessels 52 • 2012 Banana 4,200+ Tiger ? • Surveys have indicated an above average catch in 2012 for Tiger prawns • Endeavour catches not included as most sold to Europe and more recently Hong Kong

5. Japanese Prawn Imports • 1997 Australia 6,712 Total 267,247MT • 1998 Australia 5,641 Total 238,906MT • 1999 Australia 5,768 Total 247,314MT • 2000 Australia 5,282 Total 246,627MT • 2001 Australia 4,964 Total 245,048MT • 2002 Australia 4,945 Total 248,842MT • 2003 Australia 2,971 Total 233,251MT • 2004 Australia 3,641 Total 241,445MT • 2005 Australia 3,587 Total 232,443MT

6. Japanese Prawn Imports • 2006 Australia 3,154 Total 229,952MT • 2007 Australia 1,904 Total 207,257MT • 2008 Australia 2,268 Total 196,626MT • 2009 Australia 1,989 Total 197,574MT • 2010 Australia 2,078 Total 205,345MT • 2011 Australia 1,696 Total 205,216MT

7. Changing Times in Japan • The 80’s and 90’s was the period of the Japanese “bubble” economy and their love affair with Australia and everything Australian which allowed the expansion of both Headless Banana & Head-on Tiger prawn sales throughout Japan • Increased production of Headless Black Tiger prawns resulting from the transfer of knowledge from Taiwan to Thailand changed the wild caught industry forever coupled with the explosion of Vannamei production focused fishers in how to compete • With Headless wild caught “whites” from India and Indonesia and Japanese own J/V production from West Irian Australian product was no longer competitive • China and the domestic market became industry focus

8. Period of Co-operation • With declining prices and increased market competition more innovation with additional on board processing commenced with smaller “packs” from 10kg, 5kg, 3kg and 1.5kg water blocks were produced and perfected • Chinese trade provided a catalyst for co-operation as exporters struggled with import restrictions and endless ongoing product claims in an effort to understand the market requirements increased communication amongst all operators • Securing payment and ensuring cargo delivery increased industry dialogue and trust amongst operators as further consolidation within the industry was taking place

9. Domestic Focus • Declining export prices from all markets especially China for Banana prawns focused operators attention on the domestic market and opportunities for volume sales through supermarkets throughout the year, a dramatic change from the catch them ship them attitude • Dealing with the “big boys” has involved a steep learning curve for all suppliers and the complexities of their trade requirements and responsibilities as suppliers of “Food” to the supermarkets • No longer can industry simply catch pawns and put them into a box and achieve prices that historically export markets returned

10. Future Changes • Wild catch sector is facing enormous issues going forward including • High Dollar • Increased Fuel Costs • Aging Fleet • Old Skippers • High input costs • Increased Government regulation • Bio-Security issues • Chemical Residue • Non tariff barriers • Increased competition from other domestic species • Imports • Trawling – public perception • Declining prices • Variable catches

11. The Solution • MORE COHESION