The future of marine ingredients
The recent publication of The State of World Fisheries and Aquaculture 2020 by the UN FAO represents a good opportunity to reflect on the prospects for the marine ingredients on the basis of sound and objective analyses on both the capture and aquaculture fisheries.
These two dimensions are particularly intertwined when it comes to marine ingredients, as both wild and farmed fish provide raw material for the production of fishmeal and fish oil, while aquaculture represents the most important consumer of marine ingredients with a 70 percent intake of the total annual consumption of both fishmeal and fish oil (Figure 1).
According to the Sofia 2020 report captures of wild fish in the next decade should remain stable at around 96 million metric tonnes per year, ensuring a steady flow of raw material for reduction. The reason behind such positive forecast lies on the fact that stocks of certain species have been recovering in recent years thanks to improved resource management. This seems particularly true for reduction fisheries. In 2019 a review of the management of the leading European and Latin American fisheries used for fishmeal and fish oil carried out by the conservation NGO Sustainable Fisheries Partnership did in fact conclude that 88 percent of the volume comes from fisheries that are at least “reasonably well-managed”. As a comparison, the FAO indicates that only 78% of the global marine fisheries are biologically sustainable.
The Sofia 2020 report also suggests that growth in wild catches are expected in the waters of those “few countries with underfished resources, where new fishing opportunities exist or where fisheries management measures are less restrictive”; and that further growth might come from “improved utilization of the harvest, including reduced onboard discards, waste and losses as driven by legislation or higher market fish prices, both for food and non-food products”.
All this suggests that in the medium-term the availability of raw material for reduction remains potentially unchanged. Indeed, the UN FAO expects the global supply of fishmeal and fish oil to slightly improve over the next decade, although a smaller percentage will come from wild whole fish and more from fish waste and by-products from the processing industry. In 2030 around 30 percent of the world’s fishmeal is expected to be produced from trimmings (22 per cent in 2018), while for fish oil the proportion should rise from the current 40 percent to 45 percent.
This adds evidence to the fact that the marine ingredients’ supply is sustainable and will continue to support land animal and fish farming around the world. IFFO’s expectation for the medium term remains that of a total average annual supply of 5 million metric tonnes of fishmeal and 1 million metric tonnes of fish oil, with ups and downs due to environmental conditions such as El Niño–Southern Oscillation in South America.
As mentioned before, the lion’s share of the consumption of marine ingredients goes to aquaculture. This does not come as a surprise considering that the same FAO states that “fishmeal and fish oil are still considered the most nutritious and most digestible ingredients for farmed fish, as well as the major source of omega-3 fatty acids”. The future demand for marine ingredients is thus strictly related to the future of aquaculture.
According to the Sofia 2020 global annual aquaculture output should grow up to 110 million tonnes by 2030, meaning more than 25 million of additional tonnes in comparison to 2018. Although this equates to a lower average annual growth than in the previous decade (i.e. 2.3% vs 4.6%), it is a confirmation that more aquafeed will be needed to feed the additional fish raised in the coming decade.
Aquaculture is indeed expected to grow in all continents, with Africa projected to grow at the fastest rate (i.e., 48%), followed by Oceania (i.e., 41%), Latin American (i.e., 33%), Asia (i.e., 32%), North America (i.e., 27%) and Europe (18%). It will be still Asia though to dominate the sector producing almost 90% of the aqua products by 2030, with China remaining the biggest producing country with 56% of the total, against 58% in 2018.
As Figure 2 shows, the consumption of fishmeal in 2018 mirrored the dominance of Asia and China in aquaculture, although higher than average inclusion rates in the diets of salmonids and crustaceans tend to push up the importance of Latin America and Europe.
For fish oil, however, the higher than average inclusion rates in the salmonids’ diets (along with the role played by the pharmaceutical sector) totally reverse the order of importance of the different regions, with Europe and Latin American consuming more than 60% of the total.
In terms of marine ingredients, the expected growth of the global aquaculture industry means that although inclusion rates might continue to decrease, and fishmeal and fish oil used more and more as strategic ingredients rather than commodities, there will continue to be a high need for marine ingredients.
The majority of the farmed species worldwide will remain freshwater species, which tend to have lower inclusion rates of fishmeal and fish oil. However, the UN FAO reckons that higher-value species, the ones with higher inclusion rates of marine ingredients (including shrimps, salmons and other marine species), will also continue to grow in the medium term. Figure 3, by reporting the breakdown of the global consumption by species, gives a graphic view of what this might entail for the usage of marine ingredients in the coming years.
The focus on the role played by the aquaculture is also justified by the fact that projections for meat consumption for the next decade are not positive. Globally, growth in demand for animal protein in the next decade is projected to slow down. According to the UN FAO, in light of continued income growth, global meat consumption per capita is projected in fact to increase to 35.1 kg retail weight equivalent by 2028, an increase of just 0.4 kg, or 1.2% compared to the base period. Pig meat consumption per capita, in particular, is projected to decline over the outlook period, as it is not a significant element in the national diets of several developing countries. Nevertheless, pork remains one of the Chinese favourable proteins, and a rebound of it supply is expected in the medium term after the great crisis caused by the African Swine fever in 2019. What is more, the sector is expected to continue its journey towards more intensive and professional farming processes, which have the potential to push up the demand for compound feed, and thus for marine ingredients. Overall, land animal will continue to demand some important tonnage of marine ingredients, but the bulk will surely be absorbed by the aquaculture sector.
Additional feed ingredients
According to different academic studies and industry surveys, by 2025 the world should be able to produce between 60 and 70 million tonnes of aquafeed, where the huge range of projections is due to the different assumptions made to support the estimates.
What is important to highlight here though is the consensus around the fact that the growth in aquaculture will be possible only through a significant increased production of aquafeed, and that in order to achieve that objective the mobilisation of all the available feed ingredients will be crucial. Achieving such goal in a sustainable manner won’t be easy though, considering the fact that all environmental impacts should be assessed in a similar way, be it for marine ingredients or vegetable components (impacts on land and biodiversity).
In such a situation, the idea that certain ingredients, and in particular the marine ingredients, half of which is certified under responsible sourcing schemes, should be replaced by others which can’t claim the same level of certification, defies the logic of making the most out of the available raw material. What is more, numbers simply do not add up. By 2025 novel ingredients are in fact expected to provide between 100,000 and 600,000 of additional tonnes of feed ingredients, either in the form of bacterial or insect protein. That means that even the most optimistic production scale of novel feed ingredients would struggle to replace the 3.5 million tonnes of fishmeal used every year within the aqua sector.
For all the reasons summarised in this article marine ingredients’ production and consumption are not projected to decline for the time being, but they will certainly be utilised more and more as strategic ingredients in feed diets made of a bigger variety of feed components.
Market Director - IFFO