Update on Asian tilapia production

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Production rising but with stagnant international demand, producers seek local markets

 

Asia leads the world in tilapia production, consumption and exports, said Dr Kevin Fitzsimmons, University of Arizona, USA, as he presented his paper at the 12th International Symposium of Tilapia in Aquaculture (ISTA 12), held in conjunction with Asian-Pacific Aquaculture 2019 in Chennai, India. In his overview on tilapia production and markets in 2019, Fitzsimmons noted that leading players in the global tilapia industry have remained relatively unchanged.

Kevin Fitzsimmons is based in Myanmar and is leading the coastal team for the Myanmar Sustainable Aquaculture Program. At ISTA12, he said, The best estimate on global production in 2018 was 6.5 million tonnes, which comprised a combination of red hybrids and black tilapia farmed in different systems; from cage farms to rice field culture.

China 

China continues to be the leading producer, consumer and exporter with 1.8 million tonnes per annum. Rapid increases in input costs (land, utilities, feed and labour) amidst stagnant prices have discouraged new production in virtually all the tilapia farming regions in China led by Guangdong, Hainan, Guangxi, Yunnan, and Fujian provinces. As international sales levelled off, domestic demand for value added tilapia products have been increasing.

Fitzsimmons said that, although slow, there has been a steady increase in tilapia farming in the Philippines and Thailand. Production hovered around 300,000 tonnes in 2016 for the Philippines and 250,000 tonnes in Thailand. Some of the largest hatchery companies are in Thailand, and they export fry to regional farmers. Bangladesh is also a large producer at an annual production of 350,000 tonnes but essentially for local consumption. In Indonesia, the Ministry of Marine Affairs and Fisheries (MMAF) is encouraging more production; throughout 2015-2018, national production increased by 13%, from 1.084 million tonnes in 2015 to 1.185 million tonnes in 2018. The major tilapia growing provinces are West Java, Sumatra and North Sulawesi (liputan6.com). Fitzsimmons noted that despite the increased production, there has been minimal increases in exports. However, MMAF recognises the economic importance of tilapia farming with regards to employment; Regal Springs Indonesia one of the largest tilapia producers in the world is employing 4,000 workers.

Vietnam, Myanmar and India

These are three countries to watch, according to Fitzsimmons. In Vietnam, the government is encouraging the production of more tilapia, thus reducing the reliance on pangasius exports. Ex-farm, black tilapia fetches USD 1-1.6/kg versus USD1.08/kg for the pangasius. In April 2019, the Ministry of Agriculture and Rural Development (MARD) reported that in 2019, there are 30,000 ha of commercial tilapia ponds and 1.2 million m3 of cages with the majority in the northern areas (Hai Duong, Bac Giang, Bac Ninh, Phu Tho, Hoa Binh, Hanoi) and some Mekong Delta provinces. The target is to increase the farming area to 40,000ha of ponds and 1.8 million cm3 of cages to produce 400,000 tonnes by 2030. Production in 2018 reached 255,000 tonnes, up 1.1% as compared to that in 2017 (Vietfish Magazine, 2019).

There are large players farming tilapia such as Nam Viet (NAVICO) with cage culture in rivers and Mavin Aquaculture (see cover photo) which is targeting 4,000 tonnes in 2019. Farms prefer red tilapia where there is a large local demand for live fish sold at up to USD2.7/kg ex-farm. Fitzsimmons reported that cage culture in large reservoirs is a significant contributor to national production. Today, virtually all of Vietnam’s current production is consumed locally with very small volumes for export.

In Myanmar, there have been several starts and stops and the government is pondering on allowing farming in reservoirs and lakes. Production in 2018 was 20,000 tonnes, mostly in polyculture with carps. The monoculture of tilapia in Myanmar has been constrained by the lack of access to quality seed and in 2015, the Worldfish Center sent genetically improved farmed tilapia (GIFT) to be raised into brood stocks by 2017. The US Soybean Export Council (USSEC) has been helping to develop tilapia farming; over three years (2015, 2016 and 2017), it brought delegations of farmers and industry leaders to Vietnam, the Philippines and Indonesia. It conducted training on hatchery technology and on tilapia grow-out, followed by a market seminar linking local and foreign seafood buyers to meet local processors and farmers (worldfish.org; ussec.org).

Farming the tilapia is gaining traction in India. Estimates of production volumes differ; Fitzsimmons reported only 20,000 tonnes in 2018 while a feed supplier in India estimated 60,000 tonnes. Tilapia is farmed in tanks, ponds and cages in reservoirs in Andhra Pradesh, Tamil Nadu, Karnataka and Kerala and West Bengal. Nile, Mozambique and red hybrids are farmed. Juveniles are from government and private hatcheries in Andhra Pradesh as well as from imports as aquarium fish from Bangladesh, reported Fitzsimmons. Tilapia has also been incorporated into polyculture with shrimp.

State governments are working on regulating tilapia farming such as on the development of protocols for the quarantine transfer of fry and juveniles. In general, a recent preference is to farm tilapia over that of carps in India. At this ISTA12 session, Dr Atul K. Singh noted that the Marine Products Export Development Authority (MPEDA) has been focussing on increasing tilapia production over the past few years. It is increasing fry supply with imports of GIFT brood stocks for the nucleus breeding programs of eight private and state department hatcheries belonging to fish farmer groups like Aresen Bio Tech, Aqua Exports in Andhra Pradesh; Indepesca in Maharastra and CP Aqua (India) in Tamil Nadu (Atul Singh, 2019). Indian reservoirs have good potential for tilapia farming which MPEDA wants to exploit to increase farmed tilapia production. Private fish exporters are planning to invest over INR100 crore (USD15 million) in rearing tilapia in cages in lakes in Maharashtra and Rajasthan in the next four years with technical support from MPEDAs Rajiv Gandhi Centre for Aquaculture (RGCA).

Misinformation on the tilapia 

At ISTA12 as well as during World Aquaculture 2019 in February, Fitzsimmons expressed concerns on how tilapia demand and prices in the US, Canada and parts of Western Europe have dropped yearly since 2015. This drop seems to be completely attributable to several misleading reports posted on the internet with claims that tilapia is worse than bacon for your health. Sites with more accurate and valid information are buried lower in the search results. It is the misleading statement – worse than bacon that seems to garner the most attention, even though the claim has been discredited by nearly every nutrition expert, medical doctor and dietician. The comments were included in a technical paper comparing omega 3 to omega 6 fatty acid concentrations in farmed tilapia and other fishes. The first figure in the article shows the omega 3 levels in farmed tilapia to be much higher than many common warmwater wild caught marine species. But a focus on the relatively high ratio of omega 6 to omega 3 led to the spurious comments.

However, despite the weak demand in the most lucrative markets, global production and consumption have continued to rise. Production and consumption have increased in several countries, for example in Indonesia.

Tilapia demand vs supply and forecast

Although a lower consumption volume has been observed in the international tilapia market in past years, demand for frozen fillets continues to capture consumer traction owing to increasing preference for tilapia fillet dishes and lower prices of frozen varieties as compared to fresh tilapia. Some trends on demand/ supply for 2018-2019 reported by various organisations are listed below:

The average unit value of frozen Chinese tilapia into the US was USD1.71/kg (CIF) for January-Septembers 2018 which was a small increase from USD1.67/kg in the same period in 2017. This marks a substantial decline from a peak of USD2.22/kg in 2014 (Source: Globefish Highlights January 2019).

A glut of frozen tilapia from China has hurt the fresh fish market in the US. Bob Tate, National Sales Manager for Miami-based Aquabest Seafood LLC said, “You have two categories of consumers one for frozen fish and usually buys on price and another consumer who does not mind paying more for fresh fish. Retailers still have tilapia at USD5.99-7.99/lb.” In today retail marketplace, variety is key; thriving departments have several items in both tray packs (self-service) and in the full-service case. One thing tilapia has going for it is its convenience. Tilapia usually takes 8 to 10 minutes to cook, and I think that is a convenience for the consumer. (Source: Supermarket Perimeter).

Chinese tilapia industry witnesses stagnancy in exports amid increasing preference for pangasius 

The US remains one of the largest importers of Chinese tilapia. However, according to the Food and Agriculture Organisation of the United Nations (FAO), in the first two quarters of 2017, global tilapia trade witnessed a decline of 6%, attributed to weakening consumer demand, increasing participation of other countries in the global tilapia trade and growing preference for other specialty fishes. A special palate for pangasius was witnessed among seafood consumers worldwide. Led by Vietnam, nearly half of the global supply of pangasius is held by India, Bangladesh, Indonesia, Malaysia, and China.

Tier 3 companies continue to account for over half the tilapia market share 

As one of the most popular farmed fish, a huge volume of tilapia for consumption, mostly fresh tilapia is met by domestic production. Especially in the Asian seafood industry, supply chain starts from small fish farmers to big city vendors. China, the world’s largest producer of tilapia exports only about 10% of its total tilapia production. In the highly unorganised market, small players continue to leverage opportunities in the domestic tilapia market with their strong local presence and limited regulatory constraints.

Tier 1 and tier 2 players add diversification to target high potential markets

Prominent market players and producers are diversifying their product offerings to target high potential markets in the US and the European Union 28 countries (EU28). Eco-labelling, low- antibiotic production processes and convenience packaging are some of the differentiated features highlighted in a bid to establish a clear distinction between commoditised and premium tilapia products.

Frozen tilapia fillets remain highly sought after with increasing demand on seafood aisles 

The market witnesses dominance of fresh varieties of tilapia whereas exports are mostly towards frozen varieties, as the nature of the fresh commodity is perishable. In addition, increasing palate for this fish has made tilapia one of the most popular fishes consumed in restaurants and seafood aisles. Although a lower consumption volume has been observed in the international tilapia market in past years, demand for frozen fillets continues to capture consumer traction owing to increasing preference for tilapia fillet dishes and lower prices of frozen varieties as compared to fresh tilapia. Source: Fact.MR Oct 2018

Cumin flavoured tilapia from Hainan

Market forecast 2018-2022 

Globefish Highlights (January 2019) expects lower tilapia sales to the US in 2019. The already declining popularity of tilapia in the US is set to take another hit if the proposed current 10% tariff on Chinese origin products is raised to 25% by the Trump Administration (although recent news have indicated a proposed withdrawal). In the expectation of this tariff escalation, trade was strong at the end of 2018. Latin America, Southeast Asia and Africa continue to increase in importance as both producers and consumers of tilapia. However, in its Global Tilapia Market 2018-2022, analysts forecast the global tilapia market to grow at a CAGR of over 5% during the period, according to their latest market research report. Growth prospects in e-commerce is one of the major trends being witnessed in the global tilapia market for 2018-2022. One of the key factors contributing to the growth of the global tilapia market is the growing demand for processed seafood. Canned and frozen tilapia are gaining popularity among consumers because of busy lifestyles and growing demand for ready-to-cook yet healthy products by millennials.

A senior analyst at Technavio for research on food said, Apart from the growing demand for processed food, new products launches are boosting the growth of the market. New and innovative products, in line with growing consumer demand, characterise the global market. Players launch new products to meet the changing consumer demands and to stay competitive in the market. For instance, in April 2018, Hainan Xiangtai Fishery, a leading tilapia producer in Hainan Province, China, launched an organic precooked range of tilapia products. Similarly, in March 2017, High Liner Foods launched 10 new value-added products through its Sea Cuisine line; the tilapia included, all with better flavours.

 

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