2023: The Year That Was

We start by reflecting on the higher supply over demand for global shrimp. Recall that 2022 was the revenge year for shrimp consumption post lockdown and China was expected to recover its appetite for shrimp in 2023. This did not happen. Ecuador continued to increase supply with its technification to an average of 23PL/m2. At the recent CFSE 2023 in Qingdao, an industry source said there was lukewarm response for shrimp, even among China’s buyers. The strategy to produce larger shrimp for better prices, both for vannamei and black tiger seems to have been replaced by a new demand for smaller black tiger shrimp disrupting the large size niche market. To balance the demand-supply equilibrium there were proposals to set a long-term global shrimp marketing campaign at the Shrimp Summit in Vietnam and Global Shrimp Forum (GSF) in The Netherlands to boost consumption. The Chinese market remains a target of most producers – from Ecuador, Saudi Arabia, Madagascar, India to Southeast Asia.

For marine fish, interest in RAS continues. To overcome scaledrop disease in Singapore’s waters, Barramundi Group plans to move its production to RAS in Brunei.

Vietnam wants to grow its marine fish aquaculture but knows that it needs to push for industrialisation. Salmon prices reached the highest level with good margins despite threats of sea lice. However, we cannot say the same with tropical marine fish. We know that the market must lead the supply chain. The live market is the only strategy that producers are familiar with, despite economic uncertainty and reduced dining out in Asia.

The two major Asian freshwater fish- tilapia and pangasius, still face cyclical fluctuations of supply and prices in markets. The major market for the tilapia is the US, which is now dominated by producers in Latin America. With poor domestic demand in China, buyer offtake has been slow, leading to higher costs as farmers keep their fish in ponds for longer, said Dr Yufan Zhang (issue July/August). The low margins cascaded along the supply chain. The reopening of China in March helped raise ex-farm prices for Vietnam’s pangasius, but farming remained unprofitable with high production cost, despite the use of local feed ingredients. There are reports of farms downsizing.

Whether shrimp or fish, disease featured as the main threat everywhere. While shrimp producers struggle with WSSV, AHPND, WFS and EHP, the latest threat was shown in a recent article by Feng Yang et al (2023) with post larvae mortality from a highly virulent Vibrio parahaemolyticus. Nevertheless, the Shrimp Summit projected more shrimp production, as catastrophic disease losses are no longer correcting global production.

Feed prices continue to remain high despite the easing of prices of major feed ingredients. This gives feed companies some breathing room after a very difficult 12 months. Fishmeal prices are now facing upward pressure after a fishing season in Peru was cancelled, adding to costs in aquaculture feeds. Fish oil prices have increased 10X to USD9,200/tonne, 107% up y-o-y. This situation is paving the way for algal oils. El Niño has arrived and it is expected to have its maximum effect towards the end of the year when the warming of the Eastern Pacific oceans results in lower fish stocks. This provides an opportunity for novel feed ingredients. Calysta’s 20,000 tonnes/year single cell protein plant in China has been commissioned while industrial insect meal producers are in expansion mode. However, the industry realises that these volumes are supplemental and not replacements due to the significant increase in aquafeed production and hence demand. New players in the single cell protein ecosystem are coming on board.

A major theme at GSF was the increasing pressure by certification bodies such as ASC in promoting sustainable feed and feed ingredients. This will come at a cost premium and two major questions were asked. The first is the timing of the implementation when the shrimp industry is already facing margin pressures due to the low product prices. The second is if this cost can be spread along the supply chain since it would be impossible for the feed company or the farmer to bear this alone. Another question was raised if this would advantage the integrated multinational companies and disadvantage smaller local feed producers which could result in an unlevel playing field.

SAVE THE DATE

TARS 2024 on Finfish Aquaculture, 14-15 August, Phuket, Thailand

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