Oil price slump boosts fishing fleet’s profitability, report states

A Seafish report on the economics of fishing points to an industry in robust health in 2014 – the latest year Seafish has figures – but with a downturn forecast for last year which has been confirmed by subsequent data.

The huge increase in mackerel quota was attributed in Quay Issues: 2014 Economics of the UK Fishing Fleet as the major factor in the 16 per cent income boost for the UK fleet. According to the report, in 2014 with £868 million worth of the fish was landed by UK vessels.

However the pelagic sector requested not to be included in a detailed breakdown of economics including profitability and crew share, though Seafish has conducted private studies for the pelagic fleet outlining these elements.

The report, published the week of a major international conference in Aberdeen on fishing economics, is the only one of its kind that takes a detailed look at the profitability of the industry and its sub-sectors. Seafish claims it is a useful tool for the industry to analyse the efficiency of its various segments.

According to the data, operating profit also increased significantly in 2014. The total UK fleet operating profit was estimated at £216 million, a 54 per cent increase from the previous year. An estimated £157 million of net profit was generated in 2014 equal to 17 per cent of total income.

The large increase in income from recorded landings was mainly due to an increase in the weight of pelagic landings. There were also increases of 12 per cent in the average prices for demersal and shellfish species. The reduction of the fuel price has also contributed to the improvement of the economic performance.

Our forecast shows that all UK fleets benefited from the oil price reduction and the economic performance indicators of most fleets show an improving profitability picture despite challenges such as the landing obligation coming in to effect for some fisheries. ARINA MOTOVA

Provisional estimates for last year were for total fishing income decreasing by 11 per cent to £772 million. This was driven by the impact of the Russia’s EU trade ban on the pelagic sector and the subsequent decrease in the average mackerel price.

Over 300,000 tonnes of mackerel was landed, more than the combined total of the next four species – herring, haddock, crabs and cod, combined. This mackerel was worth about £230m, more than double the value of nephrops, the second most valuable species.

Annual operating profit per day at sea has also risen since 2008 from just over £200 per vessel to just under £600 per vessel in 2014, across all sectors of the UK fleet.

There is no breakdown of regional data for Shetland, but the report shows that there were 3,858 full time equivalent jobs in Scottish fishing, which was 45 per cent of the UK total. Each Scottish job at sea also produced an average £65,000 gross value added – the sum of vessel profit plus crew share.

Seafish senior economist Arina Motova said: “This is a positive picture for most of the UK’s fishing fleet even though the total 2015 estimates are more conservative. Our forecast shows that all UK fleets benefited from the oil price reduction and the economic performance indicators of most fleets show an improving profitability picture despite challenges such as the landing obligation coming in to effect for some fisheries.

“We got some excellent feedback last year on the new style of the fishing fleet report with many business owners saying they found the analysis more informative for making decisions. We hope the additional information in the 2014 report, such as fleet comparisons and employment, as well as data visualisation tools used will make it even more easy to understand and useful for industry and policy makers going forward.”

One of the report’s authors, economics project manager Steven Lawrence, said that the data accumulated for Seafish for last year had closely matched the forecast in the report for 2015, especially in tonnages landed.

Mr Lawrence added that it was hoped that reports focusing on the different fishing areas such as Shetland will be published in future and that the next Seafish economic report would be published in September.

Shetland Fishermen’s Association executive officer Simon Collins said that while the figures were out of date, they nonetheless pointed to an industry “moving in the right direction”.

He said that hopefully that would continue with the decision to leave the EU if the UK did not give access to its territorial waters. “It has been a long haul to get here and we have to keep working at it,” he said.

Seafish relaunched its annual fishing fleet report under its Quay Issues brand last year and continued making improvements to its annual economic reports to make the information both easier to understand and more detailed.

This year’s report has a new chapter providing comparisons of the relative performance of vessels in each of the home nations as well as tables looking at each fleet’s dependency

Seafish researchers will spend the next few weeks at ports around the UK collecting data for inclusion in the next report and to verify the 2015 forecasts on key stocks.

The full report can be accessed and downloaded by clicking here.