It's not only the world's marine fisheries that are in decline - international stocks of freshwater eels are dwindling, creating a market opportunity for Australian eel farmers.

Victoria's eel industry currently accounts for the majority of Australia's annual exports of about 200 tonnes of eels, which go mainly to Europe. Professor Sena de Silva, of Deakin University's School of Ecology and Environment, is investigating whether the small industry can increase its production to capitalise on the international shortage.

Professor de Silva says the international market has traditionally been supplied by Japanese and European Anguilla eel species, but overexploitation, habitat destruction and water pollution have contributed to a decline in eel numbers.

About 70 per cent of the world's smoked and fresh eel supplies come from aquaculture farms, but the farms depend on wild-caught juveniles called glass eels and elvers.

"Nobody has cracked the secret of how to grow eels from eggs to maturity in captivity," Professor de Silva said.

All of the world's 18 true freshwater eel species belong to the genus Anguilla; all spawn in the ocean, and the eggs hatch into a leaf-like larval stage called a leptocephalus.

The larvae are carried by ocean currents into estuaries, where they transform into tiny, unpigmented eels called glass eels. As the glass eels develop pigment, they are called elvers, and the elvers grow into adult eels that grow slowly for between 5 and 25 years in rivers and lakes.

The adults may reach a length of metre and weigh up to 5kg before migrating to sea, where they spawn once, then die. However, most eels are about 80-100cm long and weigh about 1.5 kilograms when caught.

The change from leptocephalus to glass eel has been the obstacle to full-cycle aquaculture - neither Japanese nor Chinese researchers have been able to induce the larval eels to metamorphose in captivity.

In recent years, says Professor Sena, Japanese and Chinese farmers, who have traditionally farmed the Japanese eel, Anguilla japonicus, have been buying stocks of wild-caught Australian juvenile glass eels and elvers for aquaculture to compensate for the decline in their own wild stocks.

"As a result, glass eel and eel prices gone up, and Australia has become alert to the possibilities," Professor de Silva said. "Why sell our glass eels and elvers when we could establish the industry here and value-add to our own wild stocks?"

Australia has two species, the long-finned eel, A.reinhardti, and the short-finned eel, A.australis - gourmets consider the latter species equivalent in quality and flavor to the Japanese eel.

The short-finned eel inhabits lakes and rivers from Victoria's Western district to the Gippsland lakes, where its co-occurs with the long-finned eel, which ranges up the east coast to north-east Queensland.

The short-finned eel is believed to spawn in the Coral Sea, but little is known about the life cycle and biology of either Australian species.

"Even though Australia has been selling glass eels and elvers to other countries, we have no idea of the size of our wild stocks of juvenile eels, and whether the catch is sustainable."

For the past two years, Professor de Silva has been raising glass eels and elvers in tanks at Deakin University's Warrnambool campus, experimenting with different diets and monitoring growth rates. "We are trying to work out the best husbandry methods, and trying to develop diets for the juvenile stages."

Enhanced growth rates are essential to the viability of an eel aquaculture industry - eel farmers cannot afford to wait five years or more for eels to reach marketable size.

"I want to know what is happening in the fishery, particularly in western Victoria," he said. "How long does the eel take to get into the fishery? What happens to the restocked eels? How does productivity vary from one lake to another, and what are the factors that limit growth rates in the wild?

Professor de Silva is also studying basic aspects of eel biology, including changes in the fatty acid composition of the fish's flesh as it changes from glass eel through elver to adult.

"With eels being migratory fish, I'm interested in what happens to the fatty acid profile as the young eels come back from the sea into estuaries and rivers, and what happens when the adult returns to the sea.

"I want to know whether the profile is purely related to diet, or whether it is overridden by some adaptive mechanism that causes certain fatty acids to be retained while others are metabolised.