January 18, 2024

Salmon poised to maintain aquaculture dominance; shrimp faces continuing challenges

The latest Global Aquaculture Update by Rabobank predicts that salmon will continue to be the most profitable sector in aquaculture through the first half of 2024, while shrimp farmers are anticipated to grapple with ongoing challenges, including oversupply, low prices, and weakened Chinese import demand, Fish Farmer reported.

The report, titled "The New Normal," suggests that the global salmon industry will retain its top position in terms of profitability, while the shrimp industry struggles to stabilize amid various issues. Salmon farmers can also expect positive news as global fishmeal supply is projected to improve, accompanied by normalised prices. The impact of El Niño in Peru is subsiding, with risks still present, and fish meal demand remains strong.

Rabobank notes that 2024 is expected to witness positive, though not dramatic, growth in salmon supply after two consecutive years of contraction. Improved production conditions in Norway, coupled with contributions from Canada, the UK, and Iceland, are cited as factors for this growth. The only exception to this trend is Chile.

Salmon is poised to remain competitive in relation to other animal proteins, especially with expected lower feed prices. Rabobank foresees only a mild softening of salmon prices in the coming year, following a brief spike in 2022.

Gorjan Nikolik, senior global seafood specialist at Rabobank, said there is potential boost in supply due to better biological conditions in various regions. He noted that while salmon supply is normalizing, there could be challenges induced by El Niño, especially in Chile.

Nikolik anticipates that normalizing salmon supply, coupled with improved fish meal and fish oil production, will marginally soften prices in 2024, establishing a new, higher price normal. For the shrimp industry, the current low prices may become the new normal unless there is a reduction in supply. Weakness in Chinese import demand remains a concern, dampening the prospects of a shrimp price recovery.

The shrimp farming industry faced significant challenges in 2023, marked by weak demand in the West, persistent oversupply from Ecuador, and low prices. Despite hopes for increased demand in China after easing COVID-19 lockdowns, the actual consumer demand for shrimp fell short of expectations. Rabobank suggests a reduction in global production, particularly in Asia, and highlights the struggles even efficient producers face at current price levels.

While the outlook for US shrimp imports appears more optimistic, with a year-on-year fall of 20% by value in October 2023, demand growth is expected to be moderate. Similarly, European demand for shrimp is anticipated to remain soft.

-       Fish Farmer