December 2, 2015
Aquaculture: A highly promising but increasingly problematic protein line
India, Africa, Latin America take over from China as the sector's growth engine but issues of feed inputs, sustainability haunt the industry.
An eFeedLink Hot Topic
Once a marginal protein source, fish has joined its sister white meat chicken in becoming a vital part of the world food supply. According to the UN FAO, the current, 3.2% annual increase in world fish protein supplies is double that of the world's 1.6% annual population increase. It has made possible a doubling of world per capita fish consumption, from 9.9kg in 1960 to approximately 19.5kg in 2015.
While a 3.2% annual production increase makes fish sound as profitable as its fellow white meat chicken, aquaculture's story is in truth, a far more exciting one: The 3% average increase occurred while wild catch fish production has been stuck in an undulating, 86 to 94 million tonne plateau for the last 25 year.
Growth shifts from China, ASEAN to India, Africa, Latin America
During this time, farmed fish output skyrocketed, from 13 million tonnes in 1990 to approximately 80 million tonnes in 2015. There is little doubt that some time before 2020, fish farmers will be putting more seafood on the world's dinner tables than fisherman.
Because Asia has the greatest coastal area, it dominates world aquaculture. Just seven Asian nations -China (62%), India (6.5%), Indonesia (5.4%), Vietnam (4.6%), Bangladesh (2.6%), Thailand (1.5%) and Myanmar (1.3%)– accounted for 84% of world production. Even within Asia itself however, large changes are underway.
China, which accounted for nearly 70% of global farmed fish production a decade ago, saw its share slip back to 62%, mostly due to the devastation caused by EMS to its shrimp farming. Thailand, which was far more dependent on shrimp exports than China, saw EMS implode its share of world shrimp output share from 6% to below 2%.
On the other hand, taking advantage of its largely untapped coastline, Ecuador went from almost no shrimp production fifteen years ago to produce as much as Thailand once did. Similar, impressively steep growth curves await fish farming sectors from Panama to Brazil, Ghana to Madagascar.
But with aggressive growth in India, Vietnam, Indonesia and Bangladesh taking the market share lost by China and Thailand, Asia's share of aquaculture remains a highly dominant 88%. However, with Latin American aquaculture taking off and Africa preparing to do so, Asia's share will fall to approximately 80% within ten years -with the Indian subcontinent gaining market share at the expense of China and Southeast Asia.
China, fishmeal shortage decelerates growth
According to UN FAO statistics, from 1980 to 2015, farmed fish production grew by an average of 8% annually, but this rate is decelerating: From 1980 to 1990, output grew at 10.8%, followed by a 9.5% rate in the 1990s. World aquaculture output grew at an average rate of 6.1% from 2001 to 2010 and has been expanding by a 5.5% to 6.0% annually over the last five years.
This growth slowdown mostly reflects dominant producer China's economic deceleration, from 11% annual GDP expansion in the late 1990s to perhaps 6% to 7% today. According to the UN FAO, Chinese aquaculture growth, which average 12.7% in the 1990s, fell to 5.5% in the fifteen years since 2000 –In the rest of Asia however, aquaculture production went from expanding at a 4.8% rate in the 1990s to more than 8% from 2000 to 2015.
The good news is that Latin America and the Indian subcontinent are taking over from China and Southeast Asia as growth drivers. Africa, which went from 1.2% of aquaculture output in 2005 to 2.3% today, promises to keep aquaculture's expansion rate above 5% well into the 2030s. That growth rate is two or three times faster than that of any other protein line.
The bad news is that three closely interrelated issues have increasingly held back its growth over the past fifteen years. First, fishmeal, aqua feed's most vital input, is alarmingly scarce and at record price levels, costing ten to fifteen times more than it did in 2000. That's because world fishmeal output peaked in the early 1990s but aqua feed production kept increasing at 5% to 10% annual rates.
To put it another way, we are growing 400% more fish than we twenty-five years ago but the world is producing roughly 50% fishmeal it back then. By 2030, we will need to farm at ten times more fish than we did in 1990 we do as today while fishmeal supplies stay flat, at best.
Up to the late 2000s, the minimizing of fishmeal inclusion in livestock feed forestalled the crisis. Today, at certain times of year, fishmeal supplies are unavailable at any price. With fishmeal's cost having risen from US$200/tonne fifteen years ago to US$2,400/tonne earlier this year, aquaculture's highly efficient feed conversion ratios could be undermined by skyrocketing input costs.
Moreover, many species cannot develop properly without a minimal fishmeal quantity in their early growth feed rations. Plant-based inputs are less digestible and lack critical amino acids and fatty acids. Animal-based substitutes such as meat and bone meal, krill-based fishmeal or algae, have proven either too costly, harder than expected to develop or contain inadequate nutrient concentrations.
On one hand, aqua feed suppliers have managed to reduce their fishmeal feed inclusion rates in salmonids from 55% to 60% common two decades ago to 10% today and eventually, to as low as 5%. On the other hand, while we are learning to grow out fish on vegetable-based protein meals, this 'success' carries a steep price.


Looming marketing, food safety issues
Ionnis Nengas, aquaculture nutrition expert at Alltech Europe states that at 50% fishmeal feed inclusion rates, Atlantic Salmon flesh contains 2.3g of EPA and DHA per 100g. At fishmeal feed inclusion rates of 10%, this falls to 1.0g or less per 100g. When aqua feed's fishmeal content is reduced from 50% to 5%, Atlantic salmon's ratio of omega 3 to omega 6 fats fell from the 'healthy' 7:1 range to a far less healthy 0.7:1.
Steep drops in critical omega 3 fatty acid levels occurs in the flesh of everything from sea breams to shrimp grown on vegetable-based feed inputs. When fishmeal is removed from fish diets, their essential fatty acid profiles are hardly better than that of feed raised livestock: Seafood raised this way may lack the health benefits that allegedly it a 'healthier' protein source than meat.
Educated consumers are increasingly aware that adequate omega 3 fat intake is required for everything from heart disease prevention to maximizing your children's IQ. This creates a serious problem in marketing farmed seafood to its wealthiest, best educated market segment. Consequently, dwindling fishmeal supplies are not merely boosting production costs or constraining aquaculture's expansion; they are also creating a serious, growing public relations problem.
The fishmeal dilemma however, is merely part of a larger issue involving the sustainability of mass production aquaculture, particularly in Asia. If wild catch fishing is constrained by the size of the oceans, aquaculture is limited by coastline area and inland water resources. The ever rising stocking densities required to overcome physical limits creates a raft of technical and public relations problems for the industry –especially for export-driven sectors that must boost fish stocking densities to keep pace with emerging competitors.
On one hand, when stocking densities reach a critical level, diseases outbreaks such as EMS in Thai shrimp or ISA in Chilean salmon can destroying in months export market shares and reputations built up over decades.
On the other hand, activists allege that aqua feed, supplements and antibiotics are polluting coastlines, spreading diseases and antibiotic-resistant pathogens to wild fish in some cases, humans. Some of them, like the malachite green found in Chinese and Vietnamese ponds, are known carcinogens. In other cases, videos have been made of carp being grown in manure-infested, antibiotic-laced Chinese ponds with water quality akin to that of sewage.
Chilean salmon, for example, recently suffered a public relations disaster when, to control ISA outbreaks, salmon was left with high antibiotic levels –and shunned by large American supermarket chains. Due to the antibiotics and toxic supplements required to manage high stocking densities, import bans have been also been suffered by everyone from Vietnamese shrimp to Chinese scallops.
Even in Norway, where vaccines are successfully used in a safe, ecologically sustainable manner, producers are still forced to limit their stocking densities. In this case, the price of a "clean, healthy" reputation is being forced to surrender market share to emerging competitors.
There are several implications to all this. First, to satisfy educated, high-end consumers particular about nutritional content, some aquaculture producers may wish to explore growing "premium" fish fed a traditional diet with very high fishmeal (and omega 3 fat) levels. Costing two to three times more than normal, omega 3 rich eggs (from fishmeal fed layers) have been successfully marketed, as has been costly 'grass fed beef'. There is no reason why rich country consumers could not be kept happy with salmon and tilapia fed a diet high in fishmeal content.
Second, as Thailand's EMS outbreak demonstrated, even when a country leverages the most advanced technology available, pushing stocking densities too high will result in outbreaks that jeopardize an entire aquaculture line's survival. Consequently, the days when a leading producer could jack up stocking densities to maintain its market dominance the way Norway did salmon in the 1990s or Thailand shrimp in the early 2000s are long over.
Third, growing publicity about toxic additives or declining essential fatty acid ratios will impact aquaculture's growth much over the medium term: Aquaculture's output growth and consumption is concentrated in Third World countries where the quantity of food is a much higher priority than its nutritional quality.
But at the same time, you can be sure that fishmeal's price -and that of farmed seafood –will keep increasing until a viable, completely substitutable alternative is found. Over the next decade, growing pressure from consumers will drive aquaculture's efforts to innovate itself out of today's sustainability issues as much as rising feed input prices themselves.

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