A multi-million-dollar coral trout fishery in Queensland in Australia is in jeopardy after the country's biggest live-fish exporter's license was not renewed in China, ABC News Australia reports.

The lucrative live 'red fish' trade is the latest casualty of simmering tensions between the Australian and Chinese governments, which has already claimed wine, barley and rock lobster exports.

Australian Reef Fish Traders — which last year accounted for 70 percent of all live exports — said it could not explain the decision to end a 20-year trading relationship.

Chief Executive Barry Dun said the "serious disruption" came off the back of sending a record monthly consignment of 42 tons of live fish to China in December.

But its Cairns-based operation has now ground to a halt with workers laid off and boats between Cooktown and Mackay facing an uncertain future.

"There are other traders that still have import permits that haven't expired yet, so they've been able to take some of the fish, but not nearly the volume that we were doing until very recently," he said.

"We're still buying, but we're selling the fish into the fresh [not live] market and the price is much less than what the fishermen have been used to. So, it's going have a really significant impact across all of north Queensland."

The holding tanks at Australian Reef Fish Traders headquarters may be empty, but the company remains upbeat about the potential to pivot its business to the previously untapped Australian market.

Dun said the company was well-placed to deliver coral trout domestically, a product he rated as one of the "top five of quality seafoods in the entire planet."

"Trout is not going to be put onto the menus of all of the top restaurants in Australia if it's not available every week," Dun said. "We think that's what we can do. We think we have a really distinct advantage in that the supply chain is set up to handle live fish.''

He said to attract a premium price for a premium product, the coral trout had to be fresh.

But with the fresh-fish price languishing at A$20 a kilogram, compared with double or triple that amount normally paid to line fishers for their live catch, it remains to be seen if Australian consumers can match China's appetite and spending power.

Dun thinks it is unlikely.

However, he is confident that with further market development, the Australian coral trout can command the higher prices needed for the live-trout fleet to be sustainable.

"I've been living through the experience of this high-wire act for some time now, and it is a flaw in the industry that we are so reliant on one market.

The ABC sought comment from federal Trade Minister Dan Tehan.

Coral trout once destined for the banquet tables of China are on their way to high-end restaurants in Sydney and Melbourne.

Australia's largest live coral trout exporter loses China license