Dutch financial giant Rabobank predicts a challenging landscape for the global aquaculture sector in the second half of 2023, influenced by economic and climate factors, amidst softening seafood demand and persistent high feed costs.
Analysts from Rabobank anticipate that economic and climate-induced issues will make the latter half of this year the most strenuous for the global aquaculture industry since the height of the pandemic in 2020.
In their latest research, “Global Aquaculture Update 2H 2023: Between a Rock and a Hard Place,” Rabobank cautions of a cooling global appetite for seafood, concurrently with the projection of persistent high costs for feed.
The study reveals that, despite returning closer to normalcy, salmon prices are still high compared to their historical average. The decline in shrimp demand may deepen in 2H 2023 due to weakening Chinese consumption.
As the research highlights, despite the decline in soymeal prices, aqua feed prices won’t see the expected decrease due to high costs of fish meal and fish oil. The El Niño effect, a periodic Pacific coastal current affecting global weather, has prompted the termination of Peru’s initial fishing season, causing a significant scarcity of fish meal and oil. According to Rabobank, this will uphold the high prices for aqua feed.
The research also observes that inflation in the US and Europe continues to suppress demand, with salmon faring relatively better than shrimp. The Chinese market’s recovery from the pandemic has been slower than anticipated, leading to depressed protein prices and high stock levels. While fish meal and fish oil demand currently appears sturdy, high costs will likely instigate rationing and substitution for many.
From a supply perspective, Rabobank predicts a resurgence in salmon supply in Q3 following almost two years of shrinkage. Simultaneously, the Asian shrimp industry is bracing for a difficult phase of record-low prices due to an oversupply triggered by Ecuadorian growth.