In the latest Rabobank Research article released on September 15, 2025, Hooked on scarcity: Navigating aquafeed nutrition amid looming marine ingredient shortages, author, Novel Sharma, Seafood Analyst noted that the aquaculture industry is facing growing demand for fishmeal and fish oil, driven by the expansion of high-value species and the adoption of more intensive farming practices. However, this rising demand is colliding with stagnant marine ingredient availability and increasing vulnerability to supply shocks -particularly those linked to climate change and recurring El Niño events.
From 2024 to 2033, the production of mid value and high value fed aquaculture species is projected to grow at a compound annual growth rate (CAGR) of 3%, resulting in an increase of approximately 12 million tonnes over the next decade (Figure 1). The current supply of commercial feed ingredients such as fishmeal and fish oil will be insufficient at current inclusion rates for this growth to materialise.
Higher demand inelasticity for fishmeal and fish oil
In recent years, supply disruptions have had a more pronounced impact on fishmeal and fish oil prices, as the narrowing supply-demand gap has made demand more inelastic. While supply tightening does not change the underlying elasticity of demand, it can magnify the effects of inelastic demand already present in aquaculture.
Fishmeal: Shortage to come sooner than expected
Looking ahead, fishmeal shortages are projected to emerge as early as 2028, while fish oil scarcity is expected to intensify throughout the decade. Sharma said that the stagnating fishmeal supply and limited capacity to divert volume from other sectors could expose a shortage sooner than expected. As shortages deepen, demand inelasticity is likely to increase further, leading to greater price volatility and establishing higher price benchmarks during future supply shocks. Sharma said,
“If Inclusion rates remain at recent levels, fed aquaculture demand is projected to grow by around 3% annually through 2033, adding 1.2 million to 1.3 million tonnes of fishmeal demand which is equivalent to about 25% of current global supply,”
Looking ahead to this decade, Rabobank Research conducted a scenario analysis to forecast the fishmeal supply demand gap in aquaculture, assuming feed inclusion rates remain consistent with recent years. The analysis shows that if aquaculture continues to use 90% of total fishmeal supply, as in 2023, a shortage is likely by 2028 (Figure 2). If aquaculture increases its share of fish meal, a shortage is even likely by the end of the decade.
Fish oil: Reduced availability for aquaculture
In the coming decade, fish oil faces most severe constraints, than fishmeal. While fishmeal consumption is mainly limited by supply growth, fish oil availability is increasingly strained by high prices and competition from industries with inelastic demand. Aquaculture currently uses about 65% to 70% of global fish oil, with salmon farming alone accounting for roughly 55%. To meet this demand, aquaculture would need around 200,000 tonnes of fish oil by 2033, assuming inclusion rates remain unchanged ( Figure 3)
Aquaculture demand has already exceeded available supply, and if aquaculture maintains a 65% share of this fish oil use, a shortfall of around 20,000 tonnes is likely in 2025. If aquaculture increases its share of global fish oil supply to 70% or 75%, a shortage remains inevitable and is likely to emerge sooner than expected, potentially as early as 2027. This underscores the growing urgency to address the growing demand supply imbalance.
Climate variability
Like any other natural feed ingredient, fishmeal and fish oil are highly dependent on climate conditions. As climate battles become more erratic the risk of further disruptions to the supply and the resulting price volatility is set to rise.
The report discussed the effects of warmer water during El Nino events. Peru supplies about 20% of global fishmeal and fish oil. For omega-3 fatty acids (EPA and DHA) its share rises to 25% to 30% due to the higher EPA and DHA content. During El Nino events, warmer waters suppress nutrient upwelling reducing plankton availability, the main food source for sardines, leading to biomass declines. Research indicates that global warming is intensifying both in frequency and severity of El Nino events.
Rising unpredictability
According to Sharma, historically fish meal prices closely mirror global supply trends. However, recently, the Peruvian fishmeal supply shock is expected to have a greater domino effect on prices.
“In more recent years, this dynamic began to shift as demand growth started to outpace supply, largely due to diminishing flexibility in further lowering inclusion rates in feeds. A drop in Peruvian output could push prices beyond USD2000/tonne, potentially setting a new benchmark.”
An inelastic point for fish oil and fishmeal
For years, the industry relied on flexible feed formulations to reduce fish oil inclusion rates, thus creating a buffer to absorb supply shocks and stabilise prices. As inclusion levels reach their practical minimum, this flexibility disappeared leaving the market more exposed to volatility.
Between 2018 and 2020, prices rose steadily- 12% in 2018 and 22% in 2020 -despite strong recoveries in both Peruvian and global supply. These developments suggest demand side rigidity rather and supply volatility alone was starting to shape price dynamics.
Proactive strategies and collaboration across value chain
To support sustainable growth, the aquaculture sector must adopt proactive strategies to secure access to essential feed ingredients. Novel feed sources will play a critical role –not merely as alternatives, but as essential components of future feed formulations. Embracing these innovations will be key to building resilience and ensuring long-term viability in a resource-constrained environment. Sharma concluded,
“The core challenge is not in the cost of alternatives like algal oil or insect meal but in the growing volatility of traditional marine ingredients. This instability creates uncertainty for feed formulators and producers. Novel feed ingredients offer more stable pricing and dependable supply of essential nutrients. To build long term resilience, stronger collaboration across the value chain is essential,”
