TASMANIA could replace the seafood Australia imports with locally grown fish, if an international shipping service were reinstated.

That's what a Senate inquiry has been told.

Australia imported 70 per cent of its seafood during 2010-11 - of that 22 per cent came from Thailand, while 14 per cent came from New Zealand.

"Our aim is to start eating into that area," Petuna Seafood general manager Tim Hess told the Inquiry into Australia's Food Processing Sector yesterday.

Based in Tasmania, Mr Hess, who produces 5500 tonnes of ocean trout per annum, said total annual salmon production across the state equated to 35,000 tonnes.

"It's been increasing by between six and eight per cent a year for the past five years," he said.

But being an island, Tasmania had limited options in terms of getting the product offshore.

Last year the state lost its only international freight service - a direct link from Bell Bay to Singapore, one of the biggest ports in the world and a gateway to Asian markets.

Tasmanian exporters had since been forced to ship their products via Melbourne, which was highly expensive.

Not having a direct link to Asia was "a major concern," Mr Hess said.

An immediate threat was neighbouring New Zealand, which he saw as "an oversized Tasmania."

"They can get a product into Melbourne or Sydney just as quick as us," Mr Hess said.

"And they are on to it pretty quickly."

Mr Hess told the inquiry he was currently exporting ten per cent of his product to overseas markets.

Increasing that was hampered by Tasmania not having an international shipping service.

"As Tasmanian exporters, it's up to us to go out into the shipping world and try and encourage a shipping line to come back onto this island and give us a link into South East Asia," he said.

A "underwritten guarantee" from the federal government supporting the proposal would help, Mr Hess added.

The Select Committee on Australia's Food Processing Sector is due to report its findings to the Senate by June 30.

The committee is considering the health of the entire food supply chain, from the cost of primary inputs to the competitiveness of the retail sector as the point of supply to Australian families.

It is also considering the impact of the global market on the food processing sector, through investigating the impact of anti-dumping laws and international anti-free trade measures.