IFFO’s latest webinar held on 29th November 2022 explores the latest insights on fishmeal and fish oil market trends, with specific focuses on China, Peru, Mexico and Europe. The video recordings and pdf presentations are available here.
Opening the webinar, IFFO’s Director General Petter Martin Johannessen highlighted the important role that marine ingredients play in supporting the growth of aquaculture as the most effective way to produce protein. “With half of the raw material already certified, marine ingredients are leading in providing certified raw materials to feed …With discards from fish processing representing up to 70% of the fish, we need to waste less fish and the marine ingredients sector provides the market where fish by-products are used most efficiently. It represents one of the best bio circularity stories in terms of capturing the full value of animal production. The process is robust, the properties are unique, and the market is there. The world needs marine ingredients.”
Global focus
The first presentation was from IFFO’s Market Research Director, Enrico Bachis, with an update on the latest trends in the global supply and demand of marine ingredients. A summary of the worldwide production of marine ingredients in 2021 showed how resilient the industry was in the face of the covid-19 pandemic: with just over 5 million metric tonnes of fishmeal and 1.2 million metric tonnes of fish oil, 2021 production was actually in line with that of previous years. As part of this, Bachis highlighted that around 30% of the raw material used worldwide comes from by-products, confirming the ability of this sector to maximise precious raw material.
Bachis noted that there is much interest in Peru due to its contribution of 20% of the global annual supply of both fishmeal and fish oil. The quotas for both regions have now been announced and it indicates a healthy biomass, estimated at 6,826,839 metric tons. IMARPE, the Peruvian’s authority, has explained that lower temperatures caused by La Nina are causing the biomass to be more spread out, which will add complexities to fishing operations, and likely result in a potential catch of 1.6m mt catch by the end of 2022, producing 20% less fishmeal and 25% less fish oil when compared to 2021 levels. Globally, production levels in 2023 are expected to remain stable due to the positive effects of responsible management and increasing use of by-products, ensuring the long-term stability of the industry.
Moving to the demand side of both fishmeal and fish oil, Bachis highlighted how marine ingredients are crucial in providing to human beings the essential omega-3 fatty acids, either through the farmed fish we eat, or through the omega-3 supplements based on fish oil that we consume.
It’s also important to highlight that Asia and China provide more than 80% of the farmed fish worldwide, that they consume 70% of the marine ingredients used in aquaculture, but only 30% of the fish oil is used in aquafeed. Lastly, Bachis explored the role of land animal farming and the growing pet food sector. The fast-growing dry petfood sector is increasingly using marine ingredients in the premium dry pet food, with inclusion rates of fishmeal at around 1 to 1.5%.
Fishmeal in Europe
TripleNine’s Chief Sales Officer, Jon Tarlebø, provided an update on fishmeal supply and demand in Europe, including the production of fish meal in Europe and raw material expectation for 2022 and 2023. Fishmeal production over the last few years has been around 600,000 metric tons, with production being stable over the last 7 years and a good part of production coming from salmon trimmings. Blue whiting is a key raw material and due to lack of political agreement is now under a Fishery Improvement Project (FIP), but the quota has now been increased by 81% this year showing a healthy stock. For capelin, catches around Iceland suddenly increased in the last year but quotas are reduced again for 2023. Lastly, by-products from trimmings (herring, white fish and farmed salmon) are contributing 30 to 40% of sustainable raw material for Europe.
The aqua feed sector is dominating the demand in Europe, and other demand comes from piglet feed and petfood. In addition, Tarlebø outlined the pro’s and con’s of shipments of fishmeal from Europe to China, as well as the effect of covid and supply chain disruption on freight cost. He concluded by noting that the balance between supply and demand in Europe is good. Regarding fish oil, prices to Asia need to be higher than those locally and volumes are not expected to rise due to the high freight rates.
IFFO’s Role in the Industry Technical Developments
Presenting a global and technical perspective, IFFO’s Brett Glencross opened by showing how the global production of fishmeal remains stable, whereas the production of fish oil is increasing. Fishmeal is now playing an important role as a strategic ingredient in aquaculture feeds, while fish oil use continues to grow in the pharmaceutical sector use for human omega-3 supplements, but the majority still goes to aquaculture.
Quality criteria of fishmeals remain diversified depending on the type of product. Key differentiators among each of the products include compositional features like protein, fat, histamine, and TVN levels. Other features like organic and by-product status are also emerging depending on production region. Feed safety has received much attention in recent years with reviews on standards for things like antioxidant use through the European Food Safety Authority (EFSA), but other priorities are now emerging in the form of revisions of maximum level (ML) regulations for contaminants like dioxins, PCBs, and heavy metals, among others via organisations like CODEX and EFSA.
FAO announced earlier in 2022 that 65% of global fish stocks were considered well managed, which represented more than 80% of the global fisheries biomass. Importantly, recent studies have clearly demonstrated that when effective fisheries management is put in place, there is clear capacity to rebuild fish stocks. The other important development in sustainability is the increasing use of by-products as a resource base for marine ingredient production.
An emerging priority for the marine ingredients sector is to gain a better understanding of our full environmental impact. To better understand this, IFFO is adopting a lifecycle assessment approach to better understand all these impacts. Life Cycle Assessment (LCA) aims to compare the full range of environmental effects assignable to products and services by quantifying all inputs and outputs of material flows and assessing how these material flows affect the environment at a range of specific impact categories. Increasingly it is seen as the “mainstream” way to establish environmental credentials. Preliminary work on the LCA of marine ingredients has shown that their environmental footprint, for impact categories like global warming potential (carbon footprint), is among the best of that of the various ingredients used in many aquaculture feeds. Glencross concluded by noting “what we also see from the LCA approach is that all ingredients have their strengths and weaknesses. There is no such thing as a truly sustainable ingredient on all parameters. However, at least by using an LCA approach we can now compare different options using a shared measurement system.”
Quality and Advantages of Antarctic Krill Meal
Taking a deep dive into Antarctic krill meal, Aker BioMarine’s Helen Yu, introduced krill as a complex of nutrients important for growth and health of fish/shrimp, contains 58% protein, 25% fat, 11% minerals and astaxanthin. Its protein has 10 essential amino acids and 8 non-essential amino acids, perfect match with the definition for high-quality protein set by the UN FAO and the WHO, and is a more superior protein source. Antarctic krill meal also possesses high levels of Omega-3, in which 40% are phospholipids. Its astaxanthin, in addition to the coloring function, also has anti-inflammatory and antioxidant effects. Finally, the chitin has immune-stimulating effects to improve health and disease resistance, reduce mortality.
For feed, krill’s unique nucleotides, water-soluble amino acids, and trimethylamine oxide have excellent attractant functions, increasing palatability and feed intake, and significantly improving the growth performance and quality of the fed fish and shrimp.
Panel Discussion
The panel opened with Enrico Bachis discussing this year’s extraordinary price increases for fish oil. Bachis noted that there was a perfect storm with a bullish market, caused by low production in Peru, increased post pandemic demand, and the war in Ukraine, all causing an extraordinary increase in price.
Moving to the China market, Jon Tarlebø discussed the complexities and costs of exporting from Europe to China, with the very high freight rates remaining a big hurdle for the market. He added that European fishmeal remains attractive in China due to the higher protein yield. In Norway, he noted that although not certain, the much-discussed salmon tax will likely impact industry growth, but in the long-term industry remains strong thanks to good supply and demand.
In terms of global strength of the industry, Brett Glencross was extremely positive about the future, noting stable production from wild caught fisheries, and the increasing use of by-products. “There is no such thing as waste, every part of the fish is being used and everything has a value. As aquaculture grows, so will the availability of this valuable by-product material.” He added that marine ingredients are now a strategic high value ingredient and will remain so. Concluding that it comes down to quality and sustainability, with the industry embracing openness and transparency through the use of certification and Life Cycle Assessment (LCA) to provide the true sustainability of raw materials, and set marine ingredients apart.
Helen Yu echoed this, noting the industry’s beneficial role to humans and the planet. Panelists concluded by reiterating that the industry has a prosperous future ahead, with stable production levels and high prices due to its valuable role in the food system.