Day 2 of the IFFO April Webinar looked at the industry’s main market trends (Market Forum), with specific focuses on China as well as fish oil, EPA and DHA and insect meal.
The Technical forum touched on IFFO's latest work on technicals and regulations, as well as krill, MarinTrust's standards developments. Finally, an update on communications was provided.
China update, with a glimpse of Vietnam
Maggie Xu, IFFO’s China Director, provided an update on China’s market trends, presenting the latest development on the new/revised Chinese fishmeal standard which is expected to be issued in September / October this year and followed by a 6-month transitional period before entering into force. The fishmeal testing indexes will be moisture, crude protein, melamine, as well as ingredients of ruminant origin, according to the 2021 feed quality surveillance plan of Ministry of Agriculture and Rural Affairs (MOARA).
Looking at marine ingredients in China, China’s output has continued to fall from 2019 onwards following Covid-19 and reduced available raw materials for reduction. Maggie underlined that the pig sector was moving from a records-setting year to capacity stabilization and noted a consumption preference over domestic products. The recovering tourism brings hope to aquaculture in 2021.
Turning to the Vietnamese feed industry, Maggie explained that with an estimated fishmeal consumption of between 200,000 mt and 250,000 mt per year, Vietnam is an important player worldwide. Aquafeed absorbs almost 85% of the total fishmeal annually consumed in Vietnam, while the pig sector consumes another 13.4%. The domestic fish oil consumption is also significant at around 120,000 mt per year, with the domestic pig feed industry absorbing most of the fish oil.
Fish oil update
Providing an update on fish oil, Christian Meinich explained that 2021 supply/demand prospects were more or less unchanged since October 2020, with prospects remaining balanced. Chile’s fish oil consumption for aquafeed production is estimated to be recovering in 2021 although the impact of algae bloom remains uncertain. Norway’s fish oil consumption is experiencing a steady growth while fish oil consumprions for omega3 production remains steady with challenging container logistics.
After a peak in 2020, the world consumption of EPA and DHA is expected to remain stable without significant variations in the main market segments. Finally, Meinich mentioned a steady use of algae-based EPA/DHA in selected markets, but without important break-throughs foreseen in 2021.
Omega-3 Ingredient Market Update
GOED’s Aldo Bernasconi provided an update on the omega-3 ingredient market, showing that demand has continued to grow, especially in Asia. The volume of EPA+DHA used by the omega-3 market grew faster than the volume of ingredient oils, due to consumer preference moving towards concentrates. For dietary supplements, the fastest growing market is Infant Formula and Pharmaceuticals. In terms of crude oils, growth continues, with further projected increases expected due to increased demand from China pharmaceuticals market and forecasted results from pharmaceutical trials. Investment continues into genetically engineered seed oils, with multiple companies trying to bring to market genetically engineered seed oils with EPA and DHA.
Update on insect meal
Moving to the insect meal market, Rabobank’s Gorjan Nikolik, presented the new value-added propositions, nutritional, functional and environmental benefits that insects could bring. Beyond feed, insect products and by products may also be used for cosmetics, biofuels and bioplastics. With global insect meal production standing at currently less than 10.000 tons, the challenges that are hindering scaling up production are the product gap with the feed industry needing bulk, high costs and prices; and current legislation. With further widening of EU legislation expected in both feedstock sources and end markets, production is expected to increase. There is a global market potential of half a million-metric ton for insect protein as a pet food and animal feed ingredient. Aquafeed is key to scaling up the industry and more R&D is needed to demonstrate the functional benefits beyond nutritional value.
Neil Auchterlonie, Technical Consultant to IFFO, provided an overview of the current technical activities. Neil covered the current position on antioxidants in the EU, focusing on the reauthorisation programmes for both ethoxyquin and BHT. Both compounds remain in process and are awaiting decisions. The European Commission has extended the regulation that suspends the use of ethoxyquin to the 31st December 2022, providing an additional timeline for the revised Scientific Opinion from EFSA, and a decision to be made on authorization. For BHT, we understand that the data dossier has been submitted and a decision may be made in 2021. Also, in relation to European legislation Neil mentioned that there has been little move on dioxins at the current time, and the EC appears to be waiting the results of a WHO review of the science, before making any move on MLs.
An overview of the projects included the work on antioxidants which has stalled due to Covid, but has recently commenced in Peru with an additional IMSBC trial. In addition, the search for novel antioxidants continues with some screening of potential new compounds in Peru with the government agency ITP, which should occur over the middle of the year. An additional piece of work related to a scientific publication covering the biodiversity impacts of vegetable protein production with fishmeal production was described, as was a brief overview on the two phases of the fishmeal project. Neil also mentioned the funding for a workshop to seek consensus on the management of forage fish stocks, which has agreed IFFO funding, and is now likely to take place in 2022. The proposal was brought to IFFO by Prof. Doug Butterworth of the University of Cape Town.
The presentation was rounded off with mention of the work on GlobalGap’s development of v3.0 of the Compound Feed Manufacturing standard. This was described in terms of fishmeal and fish oil contributions and attention to sustainability. Final version due to be published July 2021 and expected to be in use for CFM from January 2022.
MarinTrust update – standards development, traceability and innovation
Francisco Aldon, CEO of MarinTrust, gave an update on the latest developments for the programme. Innovation and traceability are at the core of further developments of the standards. Chain of Custody Version 2.0 now includes a greater emphasis on traceability and labelling within the supply chain: material origin, labelling verification, traceability testing and staff training. The MarinTrust factory standard is also being developed towards Version 3.0, which will take into consideration the needs of the market, following the UN SDGs, FAO Code of conduct for responsible fisheries, benchmarked against different standards (MSC CoC Global GAP, BRC) and internationally recognised tools such as GSSI, SSCI and GFSI.
Ongoing projects include a UK government agency funded feasibility study to define traceability for marine ingredients from by-products. In Peru, there are traceability pilots at different fishmeal plants, further processors and feed producers. An Innovation Group has been started for the continuation of innovation and traceability objectives within the marine ingredients industry. The aim is for MarinTrust to be a tool for the marine ingredients industry to demonstrate full, transparent, robust and reliable traceability. The standard will do this by developing an innovative traceability system that includes all activities from fishing to feed (CTE) and that uses key information (key data elements) such as species, catch area, gear, vessel name, fishmeal plant, etc that is needed to fulfil the environmental and commercial objectives (IUU and origin) of the market. While COVID-19 related restrictions are in place, the standard will continue remote audits.
Update on krill
Next up, Kjetil Ribe gave an update on the krill industry and Aker BioMarine AS. Introducing Antarctic krill (Euphausia superba), Kjetil noted that krill meal is rich in protein, PL omega-3 and astaxanthin. The krill meal composition is almost identical to fish meal, when it comes to dry matter, ash, and protein contents. The benefits of feeding krill to fish and shrimp include overall increased profitability through improved health benefits such as less organ fat, better growth, stronger immune system and better intestinal, liver and heart health. Despite the largest biomass on Earth, only a fraction of the available quota is harvested, making it one of the world’s most sustainable fisheries due to the near-zero by-catches and fully transparent operations.
In 2020, the Antarctic krill fishery received the A-rating by the Sustainable Fishery Partnership as the only reduction fishery in the world with a biomass that is rated “in very good condition”. In addition, the fishery is FOS and MSC certified, the later was recently renewed for the next 5 years. Traceability was highlighted as the core to Aker BioMarine’s work, with a fully controlled value chain. From sustainable harvesting practices in the Antarctica to innovative product development, production, transport, logistics and marketing.
Update on Communications
Veronique Jamin, IFFO’s Communications and External Relations Director, provided an update on ongoing discussions in the media covering the industry. Each of the different communities involved in the discussion across the globe is using different lenses, from environmental and social impacts, to fish welfare or political considerations related to regulations and law enforcement. IFFO remains open to the discussion and provides clarity on the various checks and certifications that the fish feed supply chain has in place.