Fishing industry records best economic performance in a decade
By Grimsby Telegraph | Posted: 17 Jul 2017
Growth in operating profit and income in the UK fishing fleet in 2016 saw the sector record the best economic performance since 2008 according to Seafish, which published its 2016 Economics of the UK Fishing Fleet report today.
The report, now in its 11th year, provides detailed insight into the financial and operational performance of the sector following extensive face-to-face interviews with over 700 skippers and vessel owners.
According to Seafish’s preliminary estimates, UK fleet income surged by 19 per cent in 2016 compared to 2015. An increase in the price of fish contributed to the upturn in fortunes, which saw industry operating profit increase by 22 per cent.
However, total operating costs increased by 16 per cent in 2016. This is despite expenditure on fuel continuing to decrease in 2016 seeing a 30 per cent drop, on average, since 2014.
2016, on the whole, was a positive year for the sector. However, a number of skippers and vessel owners expressed concerns about the future.
Uncertainty in regulation and political developments, issues around quota availability and affordability, market prices, and crew recruitment were all listed as growing areas for concern.
Seafish senior economist, Arina Motova, said: “These are very strong figures for the UK fleet. The increase of fishing revenues and continuing low fuel price have played a key role in these great results, and in 2016 this sector’s contribution to the economy was at its highest level since 2008.
“At the same time we estimate an increase of crew wages by 27 per cent in 2016, and better economic performance has meant that not only have businesses experienced an increase in profits, but also crew members on average could enjoy higher pay."
Weight of landings
The total weight of fish landed by UK vessels decreased in 2016 to 697,000 tonnes, down slightly from 706,000 tonnes landed in 2015. Vessels registered in Scotland landed the most fish with 63 per cent of the total catch.
Mackerel made up over 30 per cent of the total landings of the UK fleet by weight.
Income and prices
The total income of UK vessels was £775 million in 2015, a 10 per cent decrease from 2014. In 2016 the value of landings went back up reaching £919million, seeing a year-on-year increase of 19 per cent.
The decrease in fishing income in 2015 and the subsequent rise in 2016 was mainly driven by the pelagic sector. The Russian trade ban, which was implemented in August 2014, contributed to the price of mackerel dropping to £645 per tonne in 2015. Last year the price of both mackerel and herring increased significantly due to strong demand in the Far East.
The average price per tonne of all species landed was £1,318. With the exception of 2011, this was the highest average price during the time series, both nominally and adjusted for inflation.
Mackerel, nephrops, scallops, monks or anglers and herring combined, made up half of the total value of fish landed.
On average, operating costs increased by 24 per cent in 2016 across the whole fleet.
Costs factored include direct fishing expenses such as fuel, labour, harbour dues, levies, quota leasing and sales commission, alongside vessel costs such as maintenance and insurance.
Seafish estimates that fuel costs for the fleet in 2016 were £94m, a decrease of £4m on the previous year and £48m less than 2014.
Despite the notable decrease in fuel prices benefiting the fleet over the past few years, the fluctuation of price is perceived as something that impacts on the financial performance of the fleet business, making forward planning difficult.
The total operating profit of the UK fleet increased by 22 per cent in 2016 to £207 million. This reflects the increase in fishing income in 2016.
Vessels that made direct sales to Europe benefited from the decrease in the value of sterling, further increasing profit margins.
Full report: 2016 Economics of the UK Fishing Fleet report