2011 was a good year for the industrial fishery in the Southeast Pacific. After several disappointing years Peru’s fishing fleet landed about 7.1 million tonnes of pelagic fish species, mainly Peruvian anchovy (Engraulis ringens). Compared to the previous year that was an increase of 127% and it gave a good boost to the country’s fishmeal production. Chile, too, landed more fish than in the previous year: 2.7 million tonnes, equal to a rise of 10%. With this solid raw materials basis the fishmeal industries in Peru and Chile, the world’s main producer countries for this much sought after product, were able to increase production by 40% in 2011. Peru produced 1.6 m t of fishmeal, Chile 0.5 m t.
Unfortunately, this welcome increase was largely used up by contrary developments in northern Europe. Due to stormy weather at the end of the year fishing fleets in some regions of the North Atlantic were forced to stay in harbour for longer than usual. Danish industrial fish landings fell by 17% to 250,000 t and Norway faced similar problems. The lack of raw materials meant that less fishmeal was produced. In Norway and Denmark total production fell by nearly one quarter to 256,000 t. Fishmeal factories in Iceland, UK and Ireland also struggled with various problems whose effects were admittedly not so drastic as in Norway and Denmark but nevertheless led to an 8% fall in production to 134,000 t. Hardest hit, however, was South Africa: their fishmeal production fell by 36%. This led to severe economic losses for their fishmeal industry, with total production in 2011 finally amounting to only 57,000 t instead of the usual 80,000 or 90,000 t. Low raw materials catch figures were blamed for this drop in production, too.
Overhasty fears that the lower catch levels in several marine regions might possibly be an indication that industrial fish stocks were being overfished were denied by the International Fishmeal and Fish Oil Organisation (IFFO). IFFO represents about 60% of global fishmeal production and 80% of related trades throughout the world.) The low landings were the result of natural stock fluctuations that are known to occur fairly frequently in pelagic school fish such as Peruvian anchovy, blue whiting, Chilean jack mackerel, Arctic capelin or Gulf menhaden. The fact that these highly productive stocks were able to regenerate within just a short time could be seen in the abrupt rise in landings off Peru and Chile last year.
Despite this, raw materials availability for fishmeal production is by no means certain for the coming years since more and more fishes, and particularly herring, mackerel and capelin, are today no longer used for fishmeal production but directly for human consumption. In the public debate on the use of fish landings a lot of people still assume that quantities amounting to about 30 m t are processed to fishmeal every year. Such raw materials volumes from fisheries have not been available to the industry since the mid-1990s, however. Since then, landings from the industrial fishery have fallen constantly so that today’s industrial fish catch level can only be somewhere around 20 m t. In the years 2015 and 2020, when El Niños are to be expected again, raw materials volume could even fall to as little as 18 m t. The fact that, in spite of these developments, fishmeal production remained more or less stable (worldwide production of fishmeal totalled 4.35 m t, of fish oil 0.991 t, in 2009) is mainly due to the proportionally stronger use of slaughter waste and trimmings. The volume of these raw materials that is used for fishmeal production is currently probably about 5 to 6 m t.
IFFO: Responsible Supply standards for sustainable fishmeal
As the representative body of the global fishmeal and fish oil industry the IFFO vehemently repudiates allegations that the industrial fishery is not managed sustainably. With regard to developments towards more sustainability the Peruvian anchovy fishery which, with annual catches of 6 m t is the biggest single fishery in the world, is even considered a global model. Prior to 2009 there were considerable overcapacities in the fishing fleet and attempts were made to compensate for this by cutting the fishing season to 50 days. During this relatively short fishing period fishermen fought hard to claim as many fishes as possible as their own. They concentrated more on quantity than on quality and the fishery constituted a high risk for the vessel crews. In spite of stable catches and rising fishmeal prices a large number of companies in the fishmeal sector were struggling. After the fishing fleet was reduced from 1,172 to 868 vessels and pressure on stocks was reduced the situation improved noticeably, however. Fewer vessels block the harbours, the fishes are landed more quickly, and they are of better quality than before. This development is reflected in higher prices which have since then risen by an average 200 USD/t. Whereas in the past it was mainly the fishmeal producers who benefited from rising demand on the world market, the fishing companies’ profitability has risen now, too.
Since it is apparently hard to get by in any field of business these days without sustainability labels, the IFFO has in the meantime developed sustainability standards, too, according to which companies operating within the industry can have themselves certified by independent institutions. Their Responsible Supply standard requires among other things responsible fisheries management, reliable, traceable production methods, and the exclusion of raw materials that come from IUU fisheries. All fishes that serve the purpose of fishmeal and fish oil production have to fulfil the criteria of the FAO Code of Conduct for Responsible Fisheries. After the programme was introduced in October 2009, within just a very short time 15 companies from the four main fishmeal producing countries applied for certification according to the Global Standards for Responsible Supply. Just one year later the Peruvian Tecnológica de Alimentos, the biggest fishmeal producer in the world, became the first company to gain the much sought after label. In the meantime about one third of the fishmeal available on the world market is certified according to the IFFO Standard.
Less industrial fish for Europe’s fishmeal industry
The IFFO seal can confirm the sustainability of this industry but it can’t produce more fishmeal. And demand for fishmeal is rising, particularly in those countries where aquaculture is well developed. China alone imported more than 1.2 m t in 2011 – that is about half of the total fishmeal traded freely on the market. A considerable share of the produced fishmeal, between 2 and 3 m t annually, does not enter international trade at all because it is used by aquaculture and other user groups in the producing countries. This can be seen in Chile, for example, whose exports fell by 14% to 240,000 t in 2011. Chile’s salmon farming is regaining strength after the ISA crisis and feed requirements are rising. This development is likely to increase in the coming months. Another problem is that, over time, fishmeal’s nutritional value and quality decrease and so it should be used as fresh as possible. Storage of products that lose quality so quickly is hardly worthwhile. And this can be seen in China, where nearly all of the fishmeal that China imported in 2011 was fed to fishes shortly afterwards. At the end of the year there were only 160,000 t in storage.
European demand for fishmeal was lower in 2011 than in the previous year. Germany, the key turntable in the European fishmeal business, imported only 98,000 t during the first nine months of that year or 61% less than in 2010. British imports fell, too, by 17% to 66,000 t. In the USA, imports have been falling for several years in succession. The reasons for this could differ from region to region but the partial substitution of fishmeal with agricultural raw materials probably plays a significant role here. Fishmeal and fish oil in fish feed are increasingly being replaced by plant alternatives. At present this is the only way to keep aquaculture production stable and remain competitive alongside other protein-rich foods in the face of the high prices that are demanded for the two marine raw materials. Nearly all animals that are produced in aquaculture can make use of the same feed components as terrestrial animals. However, fishes, crustaceans and shellfish make much more effective use of these and, given the same feed input, result in much higher yields than is possible with terrestrial animals. If it was only a question of the efficiency and economic yield of the feed then much more seafood would have to be produced rather than cattle, pigs and poultry… particularly since fish is much healthier. But although 47% of global primary production takes place in the world’s oceans we only take 3% of our food from this environment.
Feed industry makes increasing use of plant alternatives
From a nutritional viewpoint fishmeal is more or less superior to all other feed raw materials. Its composition meets the fish’s needs best. It is highly digestible and is not only an optimal source of nutrition for the fishes but also keeps them healthy in the long run. Mixed correctly, however, soy, rapeseed, barley, wheat and other agricultural raw materials can also achieve comparable results. Experiments carried out in Norway have shown that it is possible to produce salmon without using fishmeal and fish oil. This production method is still much too expensive and thus not profitable but it gives an indication of the direction in which developments are going.
Prices for cereals and other agricultural raw materials have risen considerably in recent years, however, too. Although this development has slowed down since 2010 the general trend seems unbroken. Several reasons are given for this rise in prices, for example the use of cereals in the production of biodiesel, speculation on the stock exchange, or the scarcity of production space because more maize is needed for the booming biogas industry. The main reason, however, is likely to be the worldwide demand for meat for human consumption which is increasing strongly. Feed requirements for terrestrial animal production are constantly rising which drives raw material prices upwards.
This makes it all the more surprising that an expert like Kjell Bjordal, the Director of the Norwegian feed producer EWOS, painted a confident picture of the future at the North Atlantic Seafood Forum at the beginning of March in Oslo, almost implying that the danger has passed and the situation is safe on the feed front. He was firmly convinced that there were sufficient raw materials for aquafeed available to ensure the expected growth in aquaculture sustainably. On the one hand there were reserves in some areas (about 7.3 m t of discards in the world fishing sector, for example, equal to about two and a half times the volume of raw materials needed for today’s aquaculture industry) and on the other hand we would soon be able to use resources that are still under development. Experiments had shown that it was possible to produce high-quality feeds from raw materials such as mussel meal, seaweed and microalgae. Every new raw material made a small contribution towards reducing dependency on fishmeal and fish oil
A particularly promising raw material that is available in very large quantities is cottonseed meal. It is very rich in protein and less expensive than fishmeal or soy meal. Cottonseed meal would be a good ingredient for fish feed if it didn’t contain gossypol which has a toxic effect on aquatic organisms. It has been known for over 50 years that there is a cotton variant that does not produce gossypol but this type of cotton is hardly grown because the plants are more susceptible to insect infestation. At present researchers are doing intensive work on developing gossypol-free cotton plants that are also resistant towards insect infestation. Based on optimistic forecasts this plant might be ready for large-scale production in just a few years. This would give the feed industry another large source of protein for aquafeed. In feed experiments with shrimp (L. vannamei) two thirds of the fishmeal have already been replaced by cottonseed meal without this having any negative effect on growth or FCR.
High demand for fishmeal keeps prices high
Due to numerous imponderabilities that might affect the future outlook experts are not very forthcoming with predictions on supply of fishmeal and fish oil or price developments for the present year. On the whole, most of them do not expect to see any big changes in the second half of the year. Although a lot of countries are still suffering from the economic and financial crisis demand for fishmeal and fish oil is likely to remain very strong. Both resources are not only required for aquafeed but also for terrestrial animal production. No one can predict how demand for fish species that are also used for human consumption will develop. If more herrings, sardines or sprats were to be marketed for human consumption this would put more pressure on the raw materials situation for North Atlantic fishmeal producers. Growth in aquaculture in Chile is also leading to higher requirements for fishmeal (and in 2011 the growth in global fish oil production of about 30% was almost fully absorbed by Chile’s salmon industry.)
Analysts’ price predictions are accordingly vague. Most of them don’t expect to see any great changes in either an upward or downward direction but hardly anyone wants to make definite statements one way or the other. Prices will likely remain at their current high level, but changes are possible at any time and the general trend will probably be upwards rather than downwards.