August 2, 2023

Global aquaculture braces for challenges, Rabobank says

Economic and climate factors are aligning to create what analysts at Dutch financial giant Rabobank are calling the most trying period for the global aquaculture industry since the peak of the pandemic in 2020, Fish Farmer reported.

In its latest report titled "Global Aquaculture Update 2H 2023: Between a Rock and a Hard Place," Rabobank issues a cautionary note, highlighting that the worldwide demand for seafood is showing signs of softening, all while feed costs are predicted to remain high.

While salmon prices have generally stabilised and moved closer to historical norms, they still maintain a relatively elevated position. However, Rabobank said that the downturn in shrimp demand could deepen further during the latter half of 2023, largely due to the softening demand in China.

Rabobank's report further points out that, contrary to earlier expectations, aqua feed prices are unlikely to see the anticipated reduction, primarily due to the continued high costs of fish meal and fish oil, crucial ingredients for aqua feed production. A contributing factor is the ongoing impact of El Nino, a cyclical oceanic phenomenon along the Pacific coast of South America, which has led to the cancellation of the first fishing season in Peru. This, in turn, has triggered a shortage of fish meal and fish oil, thereby supporting the higher feed prices.

On the demand side, the report identifies persistently soft demand resulting from inflation in the US and Europe. Within this context, salmon appears to be relatively better positioned than shrimp. The recovery of Chinese demand from the pandemic is unfolding at a slower pace than expected, leading to low protein prices and substantial inventories. Although fish meal and fish oil demand appear robust for the moment, the report anticipates that soaring prices will necessitate rationing and substitution in many instances.

Regarding supply, Rabobank anticipates that the salmon supply, which had contracted for nearly two years, will finally experience growth again in Q3. Conversely, the Asian shrimp industry is facing a complex phase marked by record low prices, primarily due to an oversupply triggered by significant growth in Ecuador's shrimp industry.

-      Fish Farmer