There is a very limited supply of alternative sources of fish-free omega-3s which will feed the aquaculture industry and there will come a time when the world’s oceans will not be able to keep up with the demand for forage fish. This in return could result in major supply chain disruption.

Fish feed is a mixture of raw materials, supplements and additives extracted from natural or synthetic sources which are consumed by farmed fishes.

Fishmeal, soybean, fish oil, carp are few of the commonly used raw materials. The aqua feed market is segmented by type-(mollusc feed, fish feed crustacean feed etc.)

Considering the fact that there is limited availability of marine feed resources, farming trend is expected to increase going forward. This is likely to create opportunities for fish feed market players.

Feed should be nutritionally well-balanced and provide good energy source for better growth. Herbivorous farmed fish requires protein like soy or corn, vegetable oils, minerals etc.

whereas carnivorous fish requires fish oil and proteins. Consumption of fish varies across regions, but countries in Asia Pacific and Latin America have higher average consumption.

A GLANCE INTO THE PAST

Sea-food production grew at a rate of four per cent per annum in 2012, and the aquaculture feed demand touched 7 million tonnes in 2017-18. According to the reports, India’s sea-food production was recorded at 9 million tonnes in 2012-13.

Due to the modifications in shrimp and fish farming techniques, production capacities for modern feed went up by 2.88 million tonnes during 2013-14. Shrimp production growth increased the consumption by 13 per cent in the year 2007-08 and also in 2012-13 touching almost 300,000 tonnes in 2013-14. In 2015, fish feed production was estimated to be 0.7 million tonnes and significant investment went into the creation of capacities.

The demand for fresh water fish feed grew at a rate of five to six per cent in 2015-16.

CURRENT MARKET TRENDS As stated by Agriculture and Agri-food Canada, demand for fish in China is continuing to surpass the supply. North America and Europe have relatively small aquaculture industries but have a considerably higher demand for fish and other seafood products.

It depends on Asian producers to meet all of the aquaculture demands. When we pick up the stats from past, we see that seafood consumption in the US was around 7.2 kg per capita in 2009.

The consumption of fish and seafood in Europe hit the mark of 24.35 kg per capita in 2017. Highest per capita consumption in the EU was generated through Portugal.

The level of consumption of fish is dependent upon a number of factors, including disposable income, culinary traditions, and availability of fish. While higher disposable income is directly proportional to consumption of fish, consumption is higher in coastal areas.

Driven by higher incomes and urbanization, global consumption of fish has risen. Fisheries and aquaculture are increasingly becoming a primary source of livelihood, protein and foreign exchange.

The global salmon market last year saw a steady growth in volume terms. A marginal decline in value terms was observed last year because prices dipped steeply in mid-2019.

Canada, as we know is the only largest producer of Atlantic salmon, but due to adverse situations, it experienced a drop in harvest volumes by 2 percent this year.

In 2020, the market situation has transformed completely due to the COVID-19 pandemic. Despite strong demand for farmed salmon, COVID-19 situation has generated uncertainty and volatility.

It will take a considerable amount of time for the foodservice and demand to return back to the pre-pandemic situations. According to the analysts, global salmon demand dropped by at least 15 percent.

Total output growth for farmed fishes is estimated to drop to 2 percent in 2020. The forecast for Norway and Chile is also going down to 2 percent and 5 percent respectively.

KEY MARKET PARTICIPANTS Some of the major companies in this sector involve Austevoll Seafood ASA, Aller Aqua A/S., Havsbrun, Tasa, and Coomarpes, and Cargill Inc. Biomar. The global market image is presented by assessing the markets across various regions which includes North America, Asia Pacific, Europe and few other parts of the world.

Asia Pacific region has been estimated to record the highest growth budget rate during the forecast period.

The fish feed market is expected rise a CAGR of 2.3% over the forecast period. The reason that triggers development in this sector is the rising demand for fish and export-oriented aquaculture.

There has been a significant amount of rise in the adoption of SAMP which is the 'Scientific Aquaculture Management Practice’.

Nutreco NV, Charoen Pokphand Group, Cargill Incorporated are the major players in the market.

All of these major companies are dominating fish feed market extensively by establishing aqua-feed plants.

Taking BioMar into consideration, this company established a new aqua-feed plant in Australia by investing Euro 40 million in 2020.

The production facility is expected to produce almost up to 110,000 tons aqua feed per year to support the Australian and Oceania aqua industry.

Skretting, which is the world’s largest fish feed producer, announced that it will shut down the UK production. The competition has now become too tough.

Production capacity in the region has exceeded the underlying market conditions by more than 50% now. Chinese feed company, won over US $200,000 for their protein mix which comprised of soybean, peanut meal and rapeseed.

In 2019, the second competition, demand for the creation of a fish-free fish oil substitute and envisioned four teams compete with different formulations for a $200,000 prize.

OPPORTUNITIES IN THE MARKET Although the demand for fish farming and fish feed covers the spot light, traditional export markets has been stagnant throughout. Intraregional trade business within Asia has been increasing.

With the growing middle class community, China is now demanding imports of high-quality aquaculture products and fish feed with safety and traceability. Other countries of the region which includes Indonesia and Vietnam, will be direct beneficiaries.

Domestic consumption of fishery products is probably going to increase in Southeast Asia. It is expected to boost domestic aqua feed widely in Indonesia, Myanmar and Vietnam. Outbound investments are expected to rise in these countries.

In February, a California-based biotech company Calysta, launched a joint partnership venture with Adisseo who is a specialist producer of feed additives for aqua feed and animal nutrition to produce ‘Feedkind’ a novel protein for farmed fish produced with the use of gas fermentation.

The companies here also claim that it can be manufactured without any complicated process of arable land and requires almost no water. They are now planning to expand its production in China in 2022, and have decided to supply in Asian markets exclusively.

It already aims to produce 20,000 tonnes of the feed per year in starting stage but eventually has plans to expand this to 80,000 tonnes.

This sector has the potential to offer sustainability and over six times more food than it does in the present days.

It will surpass two-thirds of the amount of edible meat that is consumed today. As the FAO says that it is necessary to feed the future global population for a sustainable ocean economy.

CHALLENGES IN THE MARKET

No sector will have to face a bigger challenge on hand as of the fish feed manufacturers. They are continuously being asked to expand the supply high-quality animal feed to salmon farms around the world.

But at the same time we cannot ignore the fact that fish in-fish-out ratio is reducing day-by-day.

One of the biggest challenges faced by this industry is the demand and need to make maximum use of five million metric tons of fishmeal and an average of one million metric tons of fish oil.

The need to find non-marine and various other alternatives that meet the nutritional needs of both fish and humans is rising.

We already have a promising scientific research ready to be revealed for a better and more sustainable path for fish feed.

According to a new research from IFFO, the fish feed group and the University of Stirling, in the United Kingdom, focuses on the point of sea-food by product being a simpler solution to cost and supply issues.

The researchers have identified multiple factors that could hamper the industry’s growth.

For small-scale producers in this industry, up-front costs can be a huge hurdle. There are farmers who cannot afford investments in feeding and harvesting equipment.

Permittivity required in the process and environmental impact assessments are identified as barriers to entry and growth. Though there a bunch of producers who are capable of renting equipment from larger enterprises yet the smaller producers are left at a disadvantage.

The lack of low-cost and readily available raw materials is another challenge that encapsulates the fish feed industry.

Producers have a difficulty in sourcing micronutrients like vitamins, proteins and good quality fishmeal which in turn leads to the inconsistencies in finished feeds.

From the producers’ perspective, feed is represented as biggest production cost and hurdle. Increasing feed capacity and quality can play a crucial step in strengthening aquaculture ventures.

Storage of the feeds in a proper should be a priority too. Manufactured diets consists of perishable nutrients and it is essential that feed storage period on the farm prior to feeding should be kept with adequate storage facilities.

Dry feed lines demand to stores under clean dry ventilated conditions which must be within a room with a concrete floor and walls. High humidity and direct sunlight can hamper the quality and nutrient.

The feed must be consumed within two months of manufacture. This industry has got to feed billions of farmed fish. Considering the fact that it must be prevented from hunting or foraging, they are left to watch hail of nutrients tossed from above.

One of the reason that drives consumer interest in eating fish is particularly salmon which consists omega-3 fatty acids.

The consumers are largely unaware of the fact that the amount of omega-3s in farmed salmon has been declining since the past few years. This decline has also resulted in the decrease of fish meal in fish food.

The remaining supply of fish meal is getting thinner as the industry is growing.

There is a very limited supply of alternative sources of fish-free omega-3s which will feed the aquaculture industry and there will come a time when the world’s oceans will not be able to keep up with the demand for forage fish. This in return could result in major supply chain disruption.