Fish Feed Market: Opportunities and Challenges

Oct 26,2020

The significant development in the fish feed market is escalating due to high demand of fish consumption. Considering the fact that there is limited availability of marine feed resources, farming trend is expected to increase in the future. This will bring up opportunities for the feed market to expand.

Feed should be nutritionally well-balanced and provide good energy source for better growth. Herbivorous farmed fish requires protein like soy or corn, vegetable oils, minerals etc. whereas carnivorous fish requires fish oil and proteins.

The highest consumption of fish is noticed in the Asia-Pacific and Latin American regions.

Current trends in Fish Feed Market

 Seafood consumption in the US was around 7.2 kg per capita in 2009. The consumption of fish and seafood in Europe hit the mark of 24.35 kg per capita in 2017. Highest per capita consumption in the EU was generated through Portugal.

The level of income and consumption is related to the increasing consumption of fish and other seafood at the same expense as that of staple foods. Driven by higher incomes and urbanization, global consumption of fish has risen. Fisheries and aquaculture are increasingly becoming a primary source of livelihood, protein and foreign exchange.

The global salmon market last year saw a steady growth in volume terms. A marginal decline in value terms was observed last year because prices dipped steeply in mid-2019.

Canada, as we know is the only largest producer of Atlantic salmon, but due to adverse situations, it experienced a drop in harvest volumes by 2 percent this year.

In 2020, the market situation has transformed completely due to the COVID-19 pandemic. Despite strong demand for farmed salmon, COVID-19 situation has generated uncertainty and volatility. It will take a considerable amount of time for the foodservice and demand to return back to the pre-pandemic situations.

According to the analysts, global salmon demand dropped by at least 15 percent. Total output growth for farmed fishes is estimated to drop to 2 percent in 2020. The forecast for Norway and Chile is also going down to 2 percent and 5 percent respectively.

Opportunities in the market

Although the demand for fish farming and fish feed covers the spot light, traditional export markets has been stagnant throughout.  Intraregional trade business within Asia has been increasing.

With the growing middle class community, China is now demanding imports of high-quality aquaculture products and fish feed with safety and traceability. Other countries of the region which includes Indonesia and Vietnam, will be direct beneficiaries.

Domestic consumption of fishery products is probably going to increase in Southeast Asia. It is expected to boost domestic aqua feed widely in Indonesia, Myanmar and Vietnam. Outbound investments are expected to rise in these countries.

In February, a California-based biotech company Calysta, launched a joint partnership venture with Adisseo who is a specialist producer of feed additives for aqua feed and animal nutrition to produce ‘Feedkind’ a novel protein for farmed fish produced with the use of gas fermentation.

The companies here also claim that it can be manufactured without any complicated process of arable land and requires almost no water. 

They are now planning to expand its production in China in 2022, and have decided to supply in Asian markets exclusively.

It already aims to produce 20,000 tonnes of the feed per year in starting stage but eventually has plans to expand this to 80,000 tonnes.

This sector has the potential to offer sustainability and over six times more food than it does in the present days. It will surpass two-thirds of the amount of edible meat that is consumed today. As the FAO says that it is necessary to feed the future global population for a sustainable ocean economy.

Challenges in the market

One of the biggest challenges faced by this industry is the demand and need to make maximum use five million metric tons of fishmeal and an average of one million metric tons of fish oil. The need to find non-marine and various other alternatives that meet the nutritional needs of both fish and humans is rising.

We already have a promising scientific research ready to be revealed for a better and more sustainable path for fish feed.

According to a new research from IFFO, the fish feed group and the University of Stirling, in the United Kingdom, focuses on the point of sea-food by product being a simpler solution to cost and supply issues.

The researchers have identified multiple factors that could hamper the industry’s growth.

For small-scale producers in this industry, up-front costs can be a huge hurdle. There are farmers who cannot afford investments in feeding and harvesting equipment. Permittivity required in the process and environmental impact assessments are identified as barriers to entry and growth.

 Though there a bunch of producers who are capable of renting equipment from larger enterprises yet the smaller producers are left at a disadvantage.

The lack of low-cost and readily available raw materials is another challenge that encapsulates the fish feed industry.  Producers have difficulty in sourcing micronutrients like vitamins, proteins and good quality fishmeal which in turn leads to the inconsistencies in finished feeds.

From the producers’ perspective, feed is represented as biggest production cost and hurdle. Increasing feed capacity and quality can play a crucial step in strengthening aquaculture ventures.

Storage of the feeds in a proper should be a priority too. Manufactured diets consists of perishable nutrients and it is essential that feed storage period on the farm prior to feeding should be kept with adequate storage facilities.

Dry feed lines demand to stores under clean dry ventilated conditions which must be within a room with a concrete floor and walls. High humidity and direct sunlight can hamper the quality and nutrient. The feed must be consumed within two months of manufacture.

This industry has got to feed billions of farmed fish. Considering the fact that it must be prevented from hunting or foraging, they are left to watch hail of nutrients tossed from above.

One of the reason that drives consumer interest in eating fish is particularly salmon which consists omega-3 fatty acids.

The consumers are largely unaware of the fact that the amount of omega-3s in farmed salmon has been declining since the past few years.

This decline has also resulted in the decrease of fish meal in fish food. The remaining supply of fish meal is getting thinner as the industry is growing.

There is a very limited supply of alternative sources of fish-free omega-3s which will feed the aquaculture industry and there will come a time when the world’s oceans will not be able to keep up with the demand for forage fish. This in return could result in major supply chain disruption.

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