Summary of the Market Forum held in Shanghai on Wednesday, 6 November 2019
On last Annual Conference's day, the Market Forum gave a global overview of the fishmeal and fish oil markets and included country presentations by IFFO members.
1/ Asia consumes over 70% of the global fishmeal
IFFO’s Enrico Bachis and Neil Auchterlonie provided an in-depth analysis of the fishmeal and fish oil demand. Peru remains the main fishmeal production and exporting country, while China is the biggest consumer. Aquaculture and pig feed output drive the Chinese consumption. Globally, it is the aqua sector to have the biggest intake, with over 70%. Asia as a whole (thanks to its aqua sector) consumes over 70% of the global fishmeal. Peru is also the main producer and exporter of fish oil, with Norway being the biggest importer. Aquaculture worldwide consumes 70% of the fish oil, followed by the pharmaceutical sector with 20%. Consumption by regions is dominated by the role of the salmonids farming industry in Europe and Latin America. The share of fishmeal consumption by the pig sector is expected to decrease in China in 2019 following the African Swine Fever epidemics. The chicken sector appears the one more sensitive to price variations with 2 important diet changes in 2010 and 2014.
2/ Global fish oil production is higher than expected
Holtermann’s Christian Meinich indicated his forecast for the global fish oil production to be at 921,000 metric tons for 2019. This is higher than expected, due to higher-than-expected anchovy fishing quota in Peru, although production is still down 70,000t compared with 2018’s bumper year. He added that consumption is stable at around 800,000t.
3/ Most of the growth in the Omega-3 market is concentrated in Emerging Economies
Continuing on the fish oil side, GOED’s Aldo Bernasconi gave an Omega-3 market update. Highlighting a global growth by 2% in the omega-3 market volume, he noted that most of the growth is concentrated in Emerging Economies. Dietary supplements are adding the most volume but as a percentage of the total volume, Infant Formula is growing the fastest. Results of recent large trials may affect consumer and healthcare practitioner perception on crude oil in a near future.
4/ Rising fishmeal prices in Europe in 2019 led to a reduction of inclusion in salmon feed diets
Jon Tarlebo from Norsildmel stated that export statistics from European producers underlines how the market balance in Europe affects sales activity outside Europe. He also noted that fish farming companies have been rated as the most sustainable protein producers in the world according to the Coller FAIRR Protein Producer Index, evaluating 9 risk and opportunity factors on sustainability. This year, new studies revealed the positive effect of marine ingredients: researchers from Nofima reported that the barrier tissue of salmon is affected by zinc and omega-3 levels in feed. Fishmeal and fish oil are excellent sources of many micronutrients and among the many different compounds present that contribute to fish (and consumer) health are zinc and the long chain fatty acids, EPA and DHA.
5/ Fishmeal in North America primary goes to pet food
Global US fishmeal imports are expected to decrease in 2019, while global fishmeal exports should remain at the same level as the 2 last years, according to Mike Cici from Scoular. Fishmeal produced in North America primary goes to pet food, a major market, then to feed for piglets. He explained that as part of the U.S. & China trade dispute, pork is listed and subject to a potential 25% tariff. China is U.S.’ third largest pork export market. Overall U.S. pork exports fell 3.9% by volume and 8.4% by value from May 2018 to April 2019. ASF in China and other ASEAN countries continues to affect piglet crop so (piglet) feed production and consumption remains at decreased levels thus could have affected USA fishmeal exports to China.
6/ Chinese domestic fishmeal output lower
IFFO’s Maggie Xu indicated that MOARA had promulgated the revised draft of China fisheries law on 28th August 2019.
The overall fishmeal supply is expected to decrease. Since September 2019, following the re-opening of Chinese near-shore fisheries after the summer fishing moratorium, local fishmeal factories have been reporting lower catch. China’s major supplier for fishmeal and fish oil remains Peru.
Maggie also commented the consequences of the current trade war between China and the US: 32% Tariff on US fish oil is being applied since June 2019, compared with 12% before trade war. The tariff on fishmeal was 2% before trade war began. It attained 27% between August 2018 and September 2019 and resumed to 2% on September 17th 2019 until September 16th 2020. An application of exemptive punitive tariff on fish oil was submitted recently.
The pig farming sector is recovering despite continued challenges. The aquatic consumption has become stronger thanks to ASF and the aquaculture sector is moving offshore. The penetration rate of compound feed is supported by government policy.
7/ The developing petfood market in China provides opportunities for marine ingredients
Chinese petfood market, fuelled by global trends, enjoys a growth potential according to Frank Li, from Kemin. He noted a high demand for natural and grain-free products (30% of the market) and price of petfood rising quickly in China. Only 2 to 4 percent of Chinese households own pets, Li said, compared with about 65 percent in the US. With rising incomes, the Chinese market has a huge potential.