UK - The Aquaculture market in the United Kingdom is highly cyclical. Scottish-farmed salmon generates more than 90 per cent of industry revenue, according to a new report.
Salmon production is very responsive to changes in global salmon prices, which are, in turn, susceptible to changes in global demand and supply conditions. This has been in evidence during the past five years, as the industry has enjoyed strong but volatile growth, states the new Aquaculture in the UK - Industry Market Research Report, from IBIS World.
Robust global demand for salmon and an outbreak of disease in Chile, one of the world's largest producers of salmon, sent prices soaring early in the five-year period. This resulted in a flood of foreign investment as players scrambled to increase their production to meet soaring export demand.
The industry leapt back to growth of 14.6 per cent in 2012-13, as global salmon prices rebounded sharply and export demand soared.
Strong growth of 5.4 per cent is estimated for 2013-14 as salmon prices ease. During the five years through 2013-14, revenue is estimated to grow at a compound annual rate of 5.5 per cent to £660.1 million.
The industry is expected to continue growing well during the next five years, underpinned by solid demand for salmon both at home and abroad. Wild catch volumes are forecast to stagnate, so farmed salmon will supply most of this demand.
Growth is likely to slow later in the five-year period as global salmon supply increases and prices ease. High salmon prices and the cost benefits associated with producers moving to larger farms are expected to support profitability.
The major threat facing the industry is the possibility of a disease outbreak, if companies expand too quickly. Producers will also come under increasing pressure from environmental groups and an increasingly eco-friendly public to improve the sustainability of salmon farming.
IBISWorld estimates industry revenue will increase at a compound annual rate of 3.5 per cent over the five years through 2018-19 to reach £783.2 million.
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