FEATURE
FISHMEAL … OR BEYOND
A special report published this month by Rabobank’s RaboResearch Food & Agribusiness team
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Sustaining fishmeal in the modern aquaculture market
ishmeal’s increasing scarcity over recent years has led to the rise in the production of alternative protein ingredients being sourced to keep up with aquaculture’s continuing demand for increased production, says a major report on fishmeal newly-released by RaboResearch Food & Agribusiness, compiled by Gorjan Nikolik and Beyhan de Jong. “With now one good season in Peru behind us and another good season on the way, supply is good and prices have stabilised at a relatively lower level. “With scarcity of fishmeal and fish oil and high prices, many projects for alternative meals and oils have been stated worldwide. Many are in the pre-profit start-up phase,” say the authors. “We combine these two observations to make the conclusion that the next few years will be decisive for the rising alternatives producers. Some will emerge and achieve scale, which may in the medium-term further erode prices or at least prevent prices from rising again to what they had been. “This means all the others will need to find niche markets for their products,” they add. Therefore, a need for solid growth strategies has presented itself, which companies are keen to exploit in order to remain profitable and competitive. It is prudent to take a look at some of the economic factors of supply and demand that surround the issue of fishmeal.
Demand and supply
The report ‘Fishmeal … or beyond’, published on May 14, 2017 by Rabobank, says aquaculture is responsible for consuming approximately 70 percent of the total fishmeal production and 73 percent of the total fish oil production. This has been growing in recent decades, however capture fishery production has remained largely stagnant. Currently, around two-thirds of aquaculture is based on extensive farming practices, using very little feed. However, intensive fish farming has driven the need for a more formulated feed. This combined with the fact that a large percentage of the farmed species are carnivorous, thus further placing a strain on the demand for quality fishmeal, says the report. The farming industry as a whole is developing for new species, such as Bluefin Tuna, newly discovered species from the Amazon or Cobia. These will attract a premium price, and will drive the demand higher. Examples of extensive aquaculture include carp, mussels and oysters. Intensive aquaculture can be found with
salmon, shrimp catfish and sea bream. Supply, by contrast, has declined, the authors say. The amount of fishmeal that can be produced has been affected by many factors. Climate change or weather unpredictability, such as El Nino, has ravaged the Peruvian anchovy supply, which has in turn led to a very volatile market. “In the past two decades fishmeal production has declined by more than two million tonnes and hit the lowest level in 2016 with an estimated volume of 4.2 million tonnes. “The knock on effect has been felt by the production of human food and pet food.” Fish trimmings of small pelagic fish used in these food stocks have led to a decline in the amount available to producers. Although it is pleasing that better use of these fish trimmings, as offal, has mitigated the contraction in production volume. Finally, unsustainable harvest practices have lowered the yield in fishmeal ingredients, which, combined with the other factors, has strained an already stretched situation leading to a negative economy of scale.
Alternative protein feed sources
As with all markets, scarcity of a commodity attracts investment and Peru is no exception. The rise of algal-, bacterial- and insect-based feed alternatives has been warmly received across the industry. As these volumes grow, the cost of production will decline to create a selfsustainable project. Common alternatives currently use plant-based or animal byproducts for feed, which has limitations. Plant-based sources have complex ingredients that are inherent in their composition such as anti-nutrients, unbalanced amino acids, and low protein. Animal by-products have a lack of mineral nutritional content and come in limited supply. New alternative ingredients such as guar protein (a co-product of the production of guar gum) krill or mesopelagic fish are rich in omega-3 and are good sources of fatty acids. Bacterial and insect feed have a high potential too, but algae feed has seen the sharpest rise in investment, says the report. Bacterial protein meals cover a wide variety of species. In production, a number of substrates such as dry, liquid and methane carbon dioxide (CO2) can be used. The production of these feeds is highly sustainable with limited water use and zero land agricultural use. “They do not use ingredients from animals and do not compete with the human food chain. However, there are still
30 | May 2017 - International Aquafeed