In the last two decades, fish meal grew increasingly scarce, as production declined by more than 2 million metric tons. This scarcity triggered a quest for alternative aquafeed ingredients. However, with the fish meal supply currently improving and prices stabilizing at a lower level, the market for alternatives needs new growth strategies, according to Rabobank.
The aquaculture industry is the biggest consumer of fish meal and fish oil. While global capture fisheries growth has been stagnant since the 1980s, aquaculture has shown rapid growth. Rabobank said around two-thirds of aquaculture is currently based on extensive farming practices using very little feed. However, intensive fish farming is the fastest-growing system of aquaculture, with a compound annual growth rate of 6% projected to 2020, and this segment relies on fish meal and fish oil.
“Fish meal supply bottomed out in 2016 due to El Niño (weather conditions), but 2017 should mark stabilization at a higher level,” according to RaboResearch senior seafood analyst Gorjan Nikolik. “After three years of low Peruvian anchovy harvests, the supply of fish meal and fish oil has considerably improved due to the absence of El Niño. High prices have also softened. We expect this price level to be maintained, at least in the short term; however, volatilities in supply are always a possibility in this industry.”
As such, Rabobank said producers of alternative proteins and oils will need new strategies to help bridge the years of (potentially) lower prices ahead.
The latest RaboResearch report — titled “To Fishmeal … or Beyond? New Growth Strategies Needed for Alternatives Market as Fishmeal Stabilizes” — explores the sector’s key dynamics, including alternative ingredients in aquafeed formulation, novel ingredients — besides vegetable-based protein meals and processed animal products — and bacterial, insect-based protein sources and algal oils, which Rabobank said show the greatest potential.