U.S. Grains Council’s Southeast Asia Aquaculture Roadshow

Shrimp Market Outlook

If we look at the historical trend of shrimp demand from 2009 to 2021, we can see an increase in the Compound Annual Growth Rate (CAGR) by 4 percent. In 2009, the global demand for shrimp was 2.9 million tons, which increased to 4.8 million tons in 2021. If we project this forward with the same CAGR, the demand for shrimp in 2030 will reach 6.8 million tons.

From the production perspective, global shrimp production between 2019 and 2022 also showed an upward trend, although the percentage of increase fluctuated. In 2019, global shrimp production reached 3.9 million tons and rise to 5.02 million tons in 2021. Asian countries dominated a significant portion of this production capacity, with Ecuador in Latin America also holding a portion.

These are the topic that was delivered by the Regional Aquaculture Consultant of U.S. Grains Council (USGC), Ronnie Tan, during the Southeast Asia Aquaculture Roadshow organized by the USGC, held in three cities: Ho Chi Minh City, Bangkok, and Jakarta (May 29thJune 2nd, 2023).

According to him, the global shrimp trend is expected to increase, but unfortunately, Asia will lose its market share. From 2009 to 2021, the dominance of Asian shrimp has declined from 81 to 64 percent. In contrast, the supply from Latin America increased from 17 to 27 percent. Further quoting Robins McIntosh from 2021’s TARS, Asia’s market share will further decline to 55 percent, while Latin America continues to grow and reach 35 percent.

The prediction of Asia’s declining dominance is attributed to several factors, including cost inefficiency in production caused by disease outbreaks resulting in high mortality rates. On the other hand, feed prices have continued to rise without a corresponding increase in selling prices.

Ronnie also added that another challenge faced by Asian producers in the global market is related to sustainability branding. Asia, in fact, has already started producing shrimp with good and sustainable quality; however, they lack effective story branding. This presents an opportunity for shrimp or seafood associations in Asia, such as MPEDA in India and VASEP in Vietnam, to step in. Ronnie further mentioned that Asia could take inspiration from Ecuador, which has successfully branded its sustainable and high­quality shrimp.

This branding issue hits especially hard in Indonesia, which has been famous for having quality issues for a while now. One way to fix this is to start improving the cold chain of harvested shrimps and reducing the common practice of “soaking” to increase weight, especially if Indonesia wants to start targeting high­value markets such as China and the European Union.

Feed Aspect Challenges

Feed remains the determining factor for production efficiency as it constitutes the largest cost component. Recently, the average price of grow­out feed with a protein content of 36 percent has reached USD

1.25 per kg. This is exacerbated by the rising raw material prices that are not accompanied by increased shrimp prices. It raises concerns among feed producers to provide support in producing quality feed at a consistently competitive price.

In response to this issue, researchers and feed producers have actually been studying several alternative raw materials, particularly protein sources. These include options such as single­cell protein, which has a remarkably high protein content of up to 72 percent. There is also BSF’s maggot meal with a protein content of 50 percent, as well as DDGS (distillers dried grains with solubles), which contains 28 percent protein for the medium quality and 50 percent minimum for its Hi­Pro line. “But the challenge lies in considering this sustainability and the price itself. Additionally, there is also the matter of security concerning both feed and food aspects,” Ronnie added.

Another speaker focusing on feed ingredients is Dr. Daranee Seguin from Phibro Animal Health Corporation. One of the highlights of Daranee’s presentation was the potential utilization of DDGS as an alternative ingredient for fish feed. She highlighted that DDGS holds various advantages, including low antinutritional factors (ANFs), competitive pricing, high energy content, and the possibility of inclusion at 20 or 30 percent (tilapia case) and supplemented with synthetic amino acids.

This is further reinforced by another speaker, Dr. Dean Akiyama, who stated that the quality of raw materials and nutritional balance are crucial because farmers cannot control which nutrients are absorbed or digested by the shrimp on a daily basis. Therefore, the feed nutrition needs to be balanced, highly palatable, and digestible, with lower total nitrogen and phosphorus content to effectively maintain the water quality in the pond. “It is more difficult and more expensive to make a lower protein feed with the same amount of available EAA (essential amino acid) and available phosphorous as compared to a higher protein feed with higher total phosphorous,” Dean revealed.

Another way to increase feed efficiency is by using better methods, as explained by Dr. Thomas Wilson, an independent nutrition consultant presenting about the extrusion method of aquafeed. He highlighted that feed manufacturing by extrusion is more costly than pellet mill. Yet, it is a very versatile method that makes it possible to produce any highly digestible feed in virtually any form (floating, sinking, or slow-sinking) or shape (flake, cylinder, sphere).

Thomas further emphasized the importance of using the appropriate extruder and having a good understanding of the ingredients and their functional properties. This knowledge enables us to choose ingredients that provide the essential nutrients at optimal levels, maximize production rates to improve cost­effectiveness, minimize waste during manufacturing, reduce factory shrinkage, and ensure consistent product quality while reducing rejected items.

System and Technology Adoption

Other than Feed and market updates, the USGC Aquaculture Roadshow also features a couple of speakers discussing about technological and practical updates at the farm level. The two were Rizky Darmawan, who shared about shrimp farming, and Amorn Luengnaruemitchai, who gave an update about tilapia farming.

Rizky Darmawan, CEO of Delta Marine Indonesia, was another speaker that presented at the event. There he shared valuable insights from his experience transforming shrimp farming systems and technologies in Indonesia. Rizky discussed the evolution of pond types, ranging from simple square­shaped earthen ponds to circular ponds with a multiphase system.

According to him, innovation in shrimp farming systems is necessary for farmers to survive in this changing environment. Rather than being treated as an art, farming should adhere to scientific principles to improve production stability. He also highlighted two concepts for the future of shrimp farming: Integrated Multi­Trophic Aquaculture (IMTA) and the use of renewable energy. Rizky concluded by emphasizing the significance of acquiring comprehensive knowledge and taking responsibility for continuous improvements in the industry to ensure its progress and reduce its carbon footprint.

Lastly, Amorn Luengnaruemitchai, Managing Director of Manit Genetics, provided an update on genetics in tilapia. Amorn discussed the role of genetic improvement through breeding programs in enhan cing the productivity of tilapia in Thailand. Over a span of 30 years, the program has successfully increased the resistance of red and Nile tilapia against Streptococcus by 7.1 and 9 percent, respectively. According to Amorn, enhan cing the performance of tilapia is crucial for improving cost efficiency for farmers, consi dering the narrow profit margins they typically face, which are only around 10 ­ 15 percent.