IFFO Conference highlights on marine ingredient industry’s role global nutrition and fishery sustainability

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IFFO – The Marine Ingredients Organisation held its three day Annual Conference in Lisbon, Portugal, from the 21st to 23rd to October. Open to IFFO Members and non-IFFO Members interested in the marine ingredients value chain, the conference gathered a record number of 530 delegates from 43 countries.

 

Market update and Peru’s quota

The conference included two sessions looking at challenges and opportunities and two market sessions. Peru’s announcement on 22nd October that the second fishing season of anchovy and white anchovy in the North-Centre of the country for the year 2024 would start on 1st November 2024 was one of the highlights of the conference, with the quota for this region being fixed at 2.510 million tons. Peru accounts for around 20% of global fishmeal supply in an average year.

Nutrition, impact and social license

Close to 30 speakers discussed feed ingredient strategies for the future, supply and demand for marine ingredients, feed ingredients industry beyond fishmeal and fish oil and explored the role which marine ingredients play in human health. 

 We all recognize that quality feed leads to quality food, and that’s the foundation of everything we do” IFFO’s Director General, Petter Johannessen, noted. “Along with this contribution comes great responsibility. We must measure our impacts—both environmentally and socially—using science-backed frameworks to track progress. We’ve seen exciting examples of innovation and ambitious efforts already taking shape across the industry”.

The industry understands that its social license to operate is essential. Earning and maintaining this requires collaboration and investment in fishery sustainability, which were key themes throughout the conference.

Closing the conference, IFFO’s President Egil Magne Haugstad announced that next year’s would take place in Tokyo from 20th to 22nd October 2025. 

Below are some key takeaways from each of the three days. Details are available at: https://www.iffo.com/blog

Market Forum on fishmeal and fish oil demand

Dr Enrico Bachis, Market Research Director, IFFO presented IFFO’s 2023 data on the consumption of marine ingredients. Fishmeal exports declined, due to reduced fishing in Peru, but exports from India increased. Imports of fishmeal also decreased, with some reduction from China and the rest of the world were similar to 2022 figures. Total use of fishmeal reduced, with 90% going to aquafeed.

Looking at aquaculture species, there is a drop in consumption in 2023 across the board with the exception of marine fish. Consumption by pork markets in China has dropped dramatically due to negative margins in this industry. With pet food, consumption in premium dry pet food is slowly increasing, most notably in North America, Europe and Latin America, and a growing market in Asia.

Fish oil, exports were also down in most countries, but there was an increase in exports from China and Chile. For imports, again these dropped in China, but there was  a huge increase in the USA, mostly for Vietnamese pangasius oil to be used as biofuel.

The drop in consumption was mainly driven by aquaculture, with lower inclusion rates, apart from in marine fish, which will likely be a temporary situation. For consumption in aquafeed, salmon is still the main consumer and a reduction in use by crustaceans.

Financing growth for the salmon farming industry

Carl-Emil Kjølås Johannessen gave a viewpoint from investment banking from Pareto Securities in Norway. Global stagnation of salmon supply has led to increasing salmon prices and high profits for farmers. Production is increasing in areas such as Norway and Chile and is expected to slightly increase in coming years. Demand is growing in most markets and prices have now stabilised and will likely continue.

While tough market conditions have driven demand to increase production in land based, closed systems in sea, larger smolt and offshore but there is a lot of uncertainty, especially with recent regulations in countries like Norway. With land-based farming, success has happened with other species and focus is now on salmon, especially in Norway and the US, with some positive developments and production is expected in the next 10 years.

To increase growth, investment is needed in technology which will predominately need to be financed with equity. There are more proven technologies and new projects entering the market, supported by large infrastructure funds and private equity firms, so movement is expected here. With traditional salmon farming, investment is focusing on new technology, closed systems and production efficiencies. Consolidation is happening in this market which bring increased efficiency and productivity.

Mediterranean aqua farming

Giving a perspective from Greek aquaculture, Nikos Papaioannou, the Chairman of IRIDA, noted that the region is experiencing rising supply and demand, and key markets, including increasing demand for sustainably produced food of high nutritional value. Market is dominated by sea bass and sea bream produced in Greece and Turkey. Demand is growing for ready to cook fish and deli items. Growth is expected between these two countries of around 5% in the coming years. Challenges include regulatory restrictions. Prices are challenged by production costs higher, but it is expected to be more balanced going forward.

Fishmeal inclusion rates in feeds are stable at around 18% and for fish oil, around 7.5%. There are no trends to reduce inclusion rates. The industry is evolving with a market shift to certified products and producers, and the increasing quality of fishmeal and fish oil from this region.

China marine ingredient market

IFFO’s China Director Maggie Xu looked at recent supply and demand drivers. In terms of regulatory updates, the GACC permits are no longer required for fishmeal imports and have been replaced by a more efficient online platform, increasing convenience for exports into China. Marine captures in China have declined following the implementation of conservation policies.

Domestic fishmeal production has risen to 17% production from by-products in 2023, driven by increasing prices, which has encouraged domestic production. Advancing technologies and sustainable policies is improving fishmeal quality. Domestic fish oil production has also increased with 29% coming from by-products. Imports have increased this year from Peru, Chile and Ecuador.

Aquaculture farmers are struggling with high prices and lack of confidence, causing a depressed market and decreasing aquafeed production. China’s pork market has been depressed but it is slowly improving this year with a steady rise in prices. Improving farming technologies is reducing dependency on fishmeal. Looking forward, lower local production of fishmeal in 2024 is expected to drive increasing imports in fishmeal. Fish oil exports may climb with support of the global direct human consumption markets.

Update on fish oil trade

Christian Meinich (Chr.Holtermann), gave an update on recent prices, which have dropped sharply and are now back at pre-Niña/Niño levels before 2023/2024, due to improved fishing conditions in Peru and carry-in stocks in 2024 feed segment. In omega-3 markets, the strained pipelines have partly refilled and feed markets have partly drawn on carry-in stocks to cover running consumption. He noted that there is still a two-tier market in feed grades depending on sustainability remains in place, with certified vs. non-certified oils.

For EPA and DHA, there was a lack of availability last year, but this will now balance again with increasing from Peru and the growing use of algae oil. In terms of 2025 market outlook, there is some potential for further restocking of omega-3 segment pipelines towards previous levels, depending on supplies from Peru. There will likely be gradually tighter supply/demand for certified feeds, with reduced Scandinavian fishing quotas vs some growth in the salmon feed segment. Finally, EPA/DHA supply/demand will likely be more balanced.

 Omega-3 Ingredient Market Update

GOED’s Aldo Bernasconi noted that omega-3 ingredient demand grew in 2023, at a slightly slower rate, but is expected to continue growing in coming years. The fastest growing regions are in Asia (except for APAC) and in the developing markets of the Middle East, with the US and Europe remaining essentially flat due to reduced supply, high prices and increasing refining of the oils. Growth in China was driven by fast-growing dietary supplement (DS) and pet nutrition segments. Most of the gains in ingredient demand were driven by increases in pet nutrition and specialty oils.

Higher crude prices affected particularly common refined oils, with most of the gains in volume going to pet nutrition, while pharmaceuticals and direct supply remained flat. The volume of EPA+DHA used by the omega-3 market also grew modestly during 2023. Most crude oils used for omega-3 products come from anchovies, sardines and similar reduction species, or by-product from the seafood industry.

Reduced crude oil supply and record fish oil prices in 2023 resulted in increased reliance on alternative sources, changes in production practices and in the market share of different ingredients. The need for the omega-3 industry to diversify and decrease reliance on Peru. Higher fish oil prices caused an increase in ingredient oil prices, but only a fraction of this was passed to the final consumers. Companies are now moving towards higher concentration premium products to retain cost vs price balance.

Market Forum on Supply 

In an update on the Peruvian Anchovy Fishing Quota for the North-Centre: IFFO’s Market Research Director,  Bachis, reported that Peruvian authorities had just announced the start of the second fishing season of anchovy and white anchovy in the North-Centre of the country for the year 2024 scheduled to be on November 1 2024. The quota for this region has been fixed at 2.5 million tonnes.

Rabobank’s Head of Agri Commodities Market Research Carlos Mera said soybean and corn markets in the US, and soybean in Brazil Argentina have had good seasons so there is an overwhelming soybean meal surplus. China’s demand of soybean has slowed greatly, and this is likely to continue. There is a global deficit for wheat, with a disappointing crop in the EU, UK, and Russia, and yields will likely be reduced in Ukraine. Wheat stocks in the US are doing well, but exports are not competitive due to issues with the Panama Canal.

La Niña can lead to a drop cereal crops in South America. The crop disruption in Ukraine means the country’s share in total exports is dropping. Exports through the Black Sea are however continuing to flow, but the outlook is unpredictable. Pests and diseases are the final challenge, which cause harvest havoc and on a global level we will expect these to be higher, mostly driven by weather.  

There is on-going growth for plant oils. Deforestation regulations for palm oil slow the market. Soybean oil and palm oil are traded at the same level, with palm oil going up and soybean oil going down due to less demand and the US election. Prices will likely go up. Rapeseed oil prices have also increased but again they will likely go down. Incoming EU regulations will ban any commodities grown on land converted after 2020.

Gertjan de Koning, Veramaris said that most of the demand for algal oil comes for EPA and DHA is  from aquaculture, the rest being nutraceuticals and pet food. On carbon footprint challenges of land-based algal oil, although they cannot beat carbon footprint of well-managed fishery, they have worked hard to reduce it down by 27% in two years. A huge share of the algal oil that is used is blended with fish oil.

 Focusing on the krill meal markets, Aker BioMarine’s VP Product and Sustainability Ragnhild Dragøy insisted that krill is an important ingredient due to its low levels of CO2, dioxin, and low in the trophic food system, so high in energy retention, and certified.

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