This year’s IFFO October webinar for its 235 members across the globe was held from October 19-21. This was in lieu of its annual conference.
Industry experts discussed market trends, nutrition, fish health and growth, sustainability and climate change in relation to the global marine ingredients sector. The opening session addressed the role of blue foods in ensuring food security and how marine ingredients will continue supporting the growth of the aquaculture sector. The market forum had an overview of the main trends both in terms of demand, with a focus on China, Peru and major farmed species. The technical forum gave an update on omega3 research projects, requirements from the Label Rouge standard and Fishery Improvement Projects (FIPs). There was also a focus on fish oil, shrimp farming in Ecuador and an update on the omega3 market. The webinar ended with a panel discussion, focusing on climate change, looking at potential impacts at each stage of the value chain and how the industry has been taking action to mitigate them.
Marine ingredients are now being considered in food related discussions and Anne Mette Baek, IFFO’s President underlined, ” Although, the complexity of the value chain makes it hard for this industry to be well understood at first sight, there is a clear recognition of marine ingredients’ nutritional value and availability at scale”. At a time when food security is being addressed through the lens of climate change, IFFO wants to provide evidence of its role in mitigating environmental and social impacts, she added.
A whole life cycle assessment of products is the way forward, she insisted, pointing to actions already taken by the marine ingredients industry, from using by-products to produce fishmeal and fish oil, to reducing emissions when sourcing raw materials. Moreover, impacts of the activity on oceans biomass is monitored and specific programs exist to reduce by-catch with strict limits and onboard observers.
Blue foods have a bright future
The webinar opened on blue foods, highlighting the potential from oceans and building on the conclusions of recent research papers such as the Blue Food Assessment papers and the Blue Papers commissioned by the High-Level Panel for a Sustainable Ocean Economy: better management and technological innovation can enable a six fold increase in the supply of food from the ocean compared to current levels. “Where do marine Ingredients stand? Our message is clear: blue foods should be considered as a key part of the global food system. And with marine ingredients supporting the production of blue foods, it is obvious that marine ingredients should follow the same path. It is just impressive to think that with 1kg of marine raw materials, 5 kg of farmed fish are produced,” said Petter Johannessen, IFFO’s Director general.
Update on global demand of fishmeal
Dr Enrico Bachis, Market Research Director, IFFO reported that in 2020, Peru remained the main fishmeal exporting country, while China is the biggest importer. No changes to this are expected in 2021 and 2022.
Globally, in 2020 it was aquaculture which consumed the biggest share of both fishmeal (86%). In 2021, no changes expected other than a further growth of the shrimp and pig feed’s consumption of fishmeal; pet food might also continue to grow. In 2020, Asia and China consumed more than 70% of the global fishmeal, mainly because of the aquaculture, although the highest growth rate was reported by the pig-feed (in China) and petfood (worldwide).
Update on global demand of fish oil
Bachis said that in 2020, Peru was the main fish oil exporting country while Norway the biggest importer. Trade was driven mainly by the aqua sectors worldwide. In 2021 and 2022, questions remain open on the trade of fish oil for direct human consumption given the uncertain regulations in both the EU and China.
Globally, in 2020, the aquaculture consumed the biggest share of fish oil :70%. In 2021 a further recovery of the shrimp and salmonids consumption of fish oil is expected. Petfood might also continue to grow, but this might not translate into a higher demand for marine ingredients given the competition from other sectors. Demand for crude oil by the pharmaceutical sector may not grow either, as the demand is moving from crude oil to concentrates.
In 2020 Europe and Latin America dominated with their aqua sector with a combined consumption of 55% but Asia followed suit with 30%. In 2021 and 2022 we don’t expect significant changes in the geographical breakdown of fish oil consumption, unless of some unexpected shocks in the shrimp and salmonids sectors.
Christian Meinich, Managing Director at Chr. Holtermann AS, explained that, looking at fish oil supply and demand, there is a general trend of continued price rises. This has been driven by disruption in certain markets such as hurricanes in the USA and sea temperature rises in West Africa. World fish oil production remains stable but the Peruvian and Icelandic markets are the ones to watch. Regarding the consumption from alternative sources of EPA/DHA, algae-based products have seen a steady rise since 2019, but have still not reached a sizeable factor.
With rapeseed oil, the market remains strong but has been affected by the global energy crisis and the poor Canadian canola crop due to heatwaves. The narrowing price gap down to rape seed oil could have a potential effect on feed reformulations. In summary, there is a potential for balanced markets 2021 and there could be slight oversupply 2022.
Update on China
Maggie Xu, IFFO’s China Director gave updates on China’s output and consumption of fishmeal and fish oil. In terms of the 2020 output, fishmeal was 4% lower year on year and 70% was from whole fish. Following a nationwide crackdown on overfishing and fishing moratoriums, wild catch output went down 5.4%. In the case of fish oil, the output was 2% lower year on year and 74% came from from whole fish. Imports of pollock from Russia have been badly disrupted by the extremely tight sanitary checks for COVID-19 virus traces on seafood imports. Pollock processing of China had lost its competitiveness. “The prospects of this sector are believed to be worrisome by Chinese analysts. The by-products generated from the pollock filleting are traditionally used to produce fishmeal and fish oil in northern and eastern China. A substantial decrease is thus expected this year in terms of white fishmeal produced here,” said Xu.
Based on China Customs data, Xu showed that cumulative fishmeal imports were higher in 2020 as compared to 2019, reaching almost 1.4 million tonnes in 2020. Imports were largely from Peru and Vietnam. Fish oil imports (largely from Peru and Vietnam too) also rose to almost 65,000 tonnes in 2020 and midyear in 2021, cumulative fish oil imports have reached close to the whole year’s imports for 2020. Port inventory of fishmeal is almost 150,000 tonnes in September 2021.
China’s aquafeed output was 20 million tonnes in 2020 and in 2021, production up to September 2021 was higher than in the same period in 2020. Based on species, the largest consumer of fishmeal in feeds were for large mouth bass, snakeheads, eel, marine shrimp, seabass and golden pomfret.
Update on major farmed species – Salmon and shrimp
Gorjan Nikolik, Senior Analyst – Seafood, Rabobank looked at developments in the salmon in the Norwegian market which has had a strong year while the Chilean market which has contracted. with regards to the shrimp market, Nikolik said that China has not reached its pre pandemic levels when it comes to imports while the US Market is booming. Shrimp is the winner seafood at retail and is on a long-term growth path.
“For me the success of Ecuador was how quickly they were able to pivot and to introduce value added. For a long time Ecuador was supplier of China. In 2020-they were depending 80% on China as an export market. China, if you remember, fell off the cliff when they started to make all the checks. With a couple of months, Ecuadorian products moved to Europe and to the US, which required much more processed products but the Ecuadorian producers were able to quickly deliver that. But now China is coming back but Ecuador has already a very strong position in Europe. So overall now it lowered it dependence on China.“
Gorjan Nikolik said that Ecuador has been able to pivot and add value to its products
On suppliers, he said, “It looks like India, another giant of the sector, will create a new record in supply growth this year. Shrimp prices in India are largely holding up despite the huge volume of exports.” He added that this is due to their dominant share of the US market, they have around 30-40% process peeled market in the US and that peeled market is really the retail market and that is doing very well. “In Vietnam there was a good performance in both 2020 and H12021 despite Covid lockdowns, with a trade deal with EU helping balance exports to all the main markets. Indonesia, which has a very big domestic shrimp market, had a strong 2020, with Q1 diverging shrimp from the domestic market to the US. Growth seems to be slowing down, and dependency on the US retail is a benefit in 2021, but a long-term risk.”
On the performance of Ecuador over these few years, José Juez, General Manager, Shrimp Division at NIRSA showed how exports have been increasing. A recovery in farming since 2006 by up to 564% to 2020, has been driven by a range of factors including: efficient pond stocking; stocking densities, aerator usage, automatic feeder; and recirculating pond systems. Export markets have also expanded beyond just the USA, to both Europe and Asia, which has allowed for more growth in the sector.
Marine ingredients’ footprint: a positive story
By-products already make up one third of fishmeal and fish oil. But much more will come with the growth of the aquaculture sector, itself producing by-products, thus relieving pressure on the terrestrial environment, according Baek. The marine ingredients industry relies on a low carbon value chain, from fishing methods to production and processing equipment. With climate change disrupting institutions, management systems, fishing operations, offloading/ processing, markets and consumption patterns, adaptation can be more than a zero-sum game, if properly implemented. This was discussed during the webinar’s climate change panel discussion, which looked at implications of ocean warming: a 4.1% decline in the maximum sustainable yield has been observed over the past 80 years, according to FAO’s Director of the Fisheries and Aquaculture Division, Manuel Barange.
Collaboration at all levels
Distributional changes in the biomass, although not geographically uniform, will make negotiations between states and regional frameworks even more instrumental. Adaptation should also be addressed through a value chain approach: adaptation becomes possible only if it is followed throughout the value chain. A library of actions taken by IFFO members towards meeting the Sustainable development goals, available on www.iffo.com, highlights the interconnection of challenges and opportunities.
Challenges such as IUU, potential of new raw materials or life cycle assessments, must be addressed through a collective lens. This is the aim of the newly launched Global Roundtable on Marine Ingredients, which IFFO and Sustainable Fisheries Partnership announced at the start of the webinar through a keynote speech by its independent chair, Arni Mathiesen.
2025 technical strategy
Dr Brett Glencross, IFFO’s Technical Director, presented the 2025 technical strategy, based on surveillance of sector intelligence, the implementation of innovation initiatives, delivery of member services, and advocacy and promotion support. Some of these are given below. Glencross updated on some processes pending such as on antioxidant regulations. The reauthorisation process for ethoxyquin (EQ) and BHT as a feed additive in the European Feed Safety Authority (EFSA) remains ongoing. For BHT, EFSA scientific opinion is due to be published and safety studies have been completed, final scientific opinion is expected in early 2022. Work on registration of tocopherols, for the International Maritime Organisation (IMO) bulk shipping (IMSBC) code is underway with trials and the IMO-IMSBC reference point is expected to be ready by early 2022.
He discussed IFFO’s projects. There is new antioxidant project on the use of two different oxygen bomb meters intended to quantify the stability of fishmeal treated with a range of different antioxidants compared against ethoxyquin. The final reports on the Fishmeal Holotype Collection are available to IFFO’s members, comprising 44 different samples from 19 species, including both whole-fish and by-product fishmeals with 159 different parameters analysed. Also available soon for members is a review on microplastics, examining the various methodologies of published studies on microplastics with findings indicating that that a standardised approach for assessing microplastics presently does not exist.
New projects will include studies on microplastic origins in fishmeal and impacts, a series of strategic Technical Workshops as well as a series of pilots for projects to support key areas such as product environmental footprint rules, sustainability, and product properties. Details on takeaways are available from IFFO’s Blog section.