Rabobank analyst Gorjan Nikolik believes that changing trends in the aquaculture market and the possible future scarcity of fishmeal, could see it move from a commodity to a strategic ingredient vital for fish farming, with a premium price.
Speaking at the Global Aquaculture Alliance GOAL 2015 conference in Vancouver last week, Nikolik said that if enough observers believe that conditions have shifted and the change happens, then it’s likely fishmeal prices will behave more like fish oil prices do.
“Fishmeal is no longer correlated to soybean meal prices. For decades people were benchmarking the two commodities,” he said.
Such a change could have far-reaching implications for feed producers, pelagic catchers and the wider aquaculture industry. It would particularly affect aqua feed producers because only the largest players would be able to finance the R&D necessary to create feeds that maximize high performance, whilst minimizing fishmeal use.
Nikolik predicted that as a result, the industry could see more consolidation such as the recent acquisition of EWOS by Cargill.
The choice of new species for aquaculture would also be affected.
“I wonder if we would have fed fishmeal to salmon if it was this expensive 30 years ago,” he said. “The species that will be successful from now on, I say, are either things like tilapia or pangasius that naturally don’t need much fishmeal, or some species that are so expensive anyway that they can take a very high inclusion rate and still make the market work.”
Such species include sturgeon, grouper and bluefin tuna.
Nikolik further speculated that as fishmeal is more valued, the companies that catch small pelagic fish from which meal is derived will also be seen as having more importance.
“There could be strategic interest of catchers, countries and companies that want to control this access because it’s very important to them strategically,” he said.
The development of alternative meals made from algae or krill may also see a boost, he said.
“They might see their business models become profitable sooner rather than later.”
Although fishmeal supplies have largely been stable in recent years, global production is down by about 2 million metric tons compared to 1997.
This is in part because small pelagic species that were once used exclusively for fishmeal are now being consumed directly or have been overfished, and also because pet food, particularly for cats, is increasingly incorporating trimmings.
Source: Jason Smith, Undercurrent News. (Subscription or 8 free reads per month)
