THE RISE (AND RISE)
of the aquatic ‘chicken’ by Lian Heinhuis, Analyst Seafood, Food & Agribusiness Research and Advisory, Rabobank International, The Netherlands and Gorjan Nikolik, Rabobank International, Singapore
orldwide demand for seafood is growing and wild catch production cannot grow at the same pace, meaning that aquaculture is becoming key for the supply of aquatic protein. As the farming of fish—especially freshwater species—rapidly gains popularity around the world, opportunities increase for both farmers and players active in auxiliary industries. Farmed freshwater fish species, consisting of different types of carp, catfish and tilapia, accounted for over half of the 66 million tonnes of fish produced in aquaculture in 2012 (see Figure 1). Although carp is by far the largest subgroup (38 percent of total aquaculture production), it is predominantly consumed locally around the world. Like tilapia, pangasius has an export market and is popular among western consumers; yet its market share is still relatively small. Unlike the other species, tilapia has seen the greatest growth in production and widespread appeal in global markets. Tilapia is easy to farm and feed and has a neutral flavour that appeals to many, hence it is often compared to chicken. Global tilapia production volumes have increased from just over 100,000 tonnes in 1980 to 4.5 million tonnes in 2012, and the industry has an estimated total value of US$6.7 billion.1 The export market is currently dominated by China, while the United States (US) is the biggest importer. In the coming years, we expect China to focus more on its domestic market, which will create opportunities for other producers to emerge and increasingly supply growing markets, including the US. Latin American producers are in a strong position to benefit due to their location, access to feed and natural resources. Having already doubled output between 2007 and 2012, the region is expected to see further growth.
Tilapia is thriving thanks to biology and technology
The whitefish sector has seen incredible growth rates in past years. Tilapia is one of the main drivers of this growth, with farming having expanded to more than 80 countries and global production volumes having grown by an average of 11 percent per year. Tilapia is farmed in small backyard farms as well as industrial compounds managed by multinational companies. Production methods range from simple cage systems to complex indoor recirculation facilities. Technology has played an important role in the development of the tilapia industry, and innovations such as the sex-reversal technology that allows farmers to grow only the faster-growing male fish have greatly contributed to better farming practices and output. In addition, tilapia’s biological characteristics provide further advantages to farmers worldwide: the fish is relatively resilient, has a low-cost
Global production of tilapia has increased by eleven percent annually over the past decade, making it the world’s second most farmed fish. The US is the world’s largest importer, with imports valued at approximately US$1 billion per year, and China the leading exporter. But rising costs and a change in government policy will make Chinese producers less competitive over time, levelling growth and turning producer focus more towards the domestic market. This will likely create opportunities for other tilapia producers to enter the global market. Rabobank expects Latin America to step up its supply in the coming decade, with production volumes projected to rise to two million tonnes by 2025. diet, needs little dissolved oxygen in the water and reaches marketable size quickly. The main tilapia-producing country is China, which accounts for a third of all production (1.5 million tonnes annually). Chinese government programmes on farming—along with support subsidies and programmes focused on advancing technology and genetics—have resulted in a growing tilapia industry. Family-owned farms account for the largest share of production. Although volumes from China are larger than volumes from any other country, profit margins have been very low, and the industry as a whole has been making a loss. Subsidies have created competitive prices for the Chinese product, which is sold as frozen fillets in the US (almost half of total Chinese tilapia exports). However, they also pose a risk, as discontinuity could mean rising costs. Volumes in the global tilapia industry have seen strong growth, and—assuming no major disease outbreak or other negative event occurs—there is potential to double output again to nine million tonnes (live weight equivalent) by 2025 (see Figure 2).
Tilapia is America’s next top seafood item
The US is the most important market for tilapia. With import volumes of more than 228,000 tonnes (over 600,000 tonnes in live weight equivalent), Americans consume more than other major tilapia-eating countries such as Egypt or China (see Figure 3). Tilapia has risen fast on the charts of seafood popularity and now only trails salmon, shrimp and tuna as the most favoured seafood item in the US.2
20 | INTERNATIONAL AQUAFEED | January-February 2015