Following an 18% drop in the fishmeal production of the five most important producing countries in 2013 compared to the previous year, and a 26% decrease in the production of the two main producers Peru and Chile from 1.15 m tonnes to 0.855 m. tonnes, there was reason for cautious optimism again in 2014. It was possible to increase the Peruvian fishing quota for anchovies in the winter season 2014 by one quarter to a good 2.5 m t. Although the catches were initially not as high as expected the announcement alone was already sufficient to temporarily send the fishmeal price plummeting. In January 2013 the price for a tonne of fishmeal was sometimes at an all-time high of over 1,900 USD. In the first six months of 2014, however, it gradually fell and in June even touched the 1,500 level. Analysts give several reasons for this development. On the one hand, demand from the shrimp industry was lower than usual because a lot of companies are still suffering from the consequences of the EMS epidemic. And on the other hand, a lot of importers delayed their buying decisions because instable weather conditions with unusual water temperatures at the beginning of the year led to fears of lower demand. China, in particular, kept purchases of fishmeal very low at the beginning of the year.
Catch fluctuations and sporadic falls in industrial fishery landings were normal and no cause for real concern, said Enrico Bachis from the International Fishmeal and Fish Oil Organisation IFFO whose members represent nearly 60% of worldwide fishmeal and –oil production and 80% of world trade thereof. These fisheries, which supply the major share of raw materials for fishmeal production, are in the meantime on the whole well managed almost everywhere. The IFFO sustainability standard guarantees that the raw material comes from secure resources and not from IUU fishing. Only three categories of fish were generally considered for the production of fishmeal:
- Industrial fishes that are not accepted for human consumption because they are too small, have too many bones, are not sufficiently tasty, or are unknown to a lot of consumers (e.g. sandeels)
- Fishes that are edible but whose use for human nutrition is limited because of a lack of the necessary logistics or because their use is not cost-effective or it is impossible to achieve the necessary prices (e.g. Pacific anchoveta)
- Valuable consumption fish of which more were caught than can be absorbed by the markets or whose quality is insufficient. Such fishes are often then processed to fishmeal. The share of the catch that is used for fishmeal varies from species to species. For herring it is on average 10%, for sardinella 15%, jack mackerel and horse mackerel 20%, pilchard (sardine) 25%, blue whiting 30%, sprat 40% and capelin nearly 50%.
After the industrial fish catches of the five most important fishmeal producing countries were still below 10 m t in 2012 and 2013 the IFFO is expecting a slight increase again to 11.2 m t in 2014. The final annual results for 2014 are not yet available but from January to June the five main producers already produced over 1.1 m t fishmeal – more than in 2012 and 2013. However, even this increased volume is still nearly one third behind the results of 2009, 2010 and 2011. The expected increase in 2014 might thus relieve the tension on the supply market slightly but it is ultimately little more than the much quoted mere drop in the ocean. Without an even stronger use of slaughter waste and trimmings the fishmeal industry would already now no longer be in a position to satisfy the growing demand for fishmeal. According to IFFO-figures the share of slaughter waste in raw materials for fishmeal is currently already about 40 per cent and today’s forecasts expect it will rise to 50 per cent by the year 2022. This will probably be necessary to be able to supply the rapidly growing aquaculture sector with sufficient feed in the future, too.Already now, about 68% of worldwide fishmeal production goes to aquaculture; the share of fish oil is even higher at 74%. And that is a significant decrease, for in the previous year it was even higher at 78%. This is already a clear indication of a shift in the use of fish oil: more and more fish oil, particularly the high-quality Omega 3-rich types, is being used directly by human beings. The share of fish oil that is used for fish oil capsules and other nutraceuticals has risen from 19 to 22%.
Share of marine resources in salmon feed has fallen further
Salmon and other salmonids are in addition to shrimps and marine fish species the biggest consumers of fishmeal and fish oil in aquaculture. But although the available quantity of fishmeal has been constant for years and is even showing a tendency towards a downward trend, salmon production is steadily rising. The explanation behind this rather surprising phenomenon lies in the composition of the salmon feed, for it contains less and less fishmeal. In 2009 standard feed for salmon still consisted of about 30% fishmeal whereas today the share of fishmeal is around 20%. This already constituted a tremendous success, said Jan Sverre Røsstad, the Vice President of feed producer BioMar in March 2014 in his lecture at the North Atlantic Seafood Forum (NASF) in Bergen. BioMar sells aquafeed for more than 30 fish and seafood species in over 60 countries and generated sales of 1.1 billion euros in 2012. Salmon is the most important fish species for the company, accounting for about two thirds of sales. Røsstad said the annual average increase in demand for salmon feed was 6%. In spite of limited fishmeal resources he was very optimistic that the feed industry would be able to meet the growing demand in future, too, for raw material supply to the aquafeed industry had in recent years become more independent of marine resources like fishmeal and fish oil and this process would become stronger in the long term. Feed manufacturers worldwide are confronted with the problem of finding viable alternatives for fishmeal and fish oil. Not only on account of the limited supply but also due to drastically increased prices. The price of fishmeal has risen threefold in the last decade, the price of fish oil almost fivefold. In the wake of these developments the price of soy meal, one of the most common fishmeal alternatives, has also risen strongly. At the start of the millennium soy meal cost below 250 USD per tonne, but in the meantime the price has reached a good 500 USD, i.e. more than twice that.
The total annual volume of feeds that are produced worldwide for aquaculture is currently nearly 45 m t. Based on provisional estimations that would mean that 66.5 m t fish, shellfish and crustaceans were farmed. Although aquatic feeds account for only 5% of the total feed volume that is used worldwide particularly for agricultural uses, this share is likely to increase disproportionately in the coming years. Based on the current state of knowledge, in spite of conceivable alternatives it will not be possible to do completely without fishmeal and fish oil. Probably demand will even rise when the farming of new species with high protein requirements such as tuna begins on a large scale. And fishmeal and fish oil will continue to be indispensable in fry production. In the early development phase even the young of vegetarian species often have high protein requirements that are best met with fishmeal.
The production of fish feed was today much more knowledge-based than ever before, said Røsstad. In Norway alone the feed industry had invested about 1 billion NOK, or about 125 m euros, in research and development in the last decade. In his estimation Norway’s salmon industry had been able to save about three times that amount in production costs through the partial substitution of fish meal. In Røsstad’s opinion large resources that can be considered as alternatives for fishmeal are:
- Plant raw materials from agriculture. They would be available in the necessary quantities but the quality and the price were not always right. In addition, consumers reject genetically engineered raw materials but it is often exactly these which fulfil the special requirements.
- Other marine raw materials that could be isolated from algae for example. The available quantities are still too low for industrial applications, however, the techniques are too expensive, and appropriate technologies for commercial preparation are lacking.
- Animal raw materials such as bone or blood meals. Their usage would be sustainable but consumer acceptance is currently low.
IFFO standard “Responsible Supply“ for sustainable industrial fishing
The general trend towards more sustainability in the industrial fishery, too, which among other things is expressed in certification according to the IFFO standard “Responsible Supply” (RS), could at least temporarily serve to additionally exacerbate raw material problems. More and more feed producers are committing themselves to the exclusive use of certified fishmeal in their feeds. The problems the fishing fleets sometimes have to face today could be seen in 2014 in the example of the Peruvian industrial fishery. Although theoretically sufficient fishes were available the vessels often remained in harbour because the stocks had moved southwards in search of deeper cooler water layers due to the unusually high water temperatures. Industrial fishery is prohibited there, however, within a 10 sea mile zone. And in the accessible fishing regions the management authorities forbade the fishery for several days because the share of young fishes in the catches was too high. Such developments that are difficult to foresee inevitably reduce landings of raw materials for the fishmeal factories but they also show how seriously the topic sustainability is taken in the world’s most important fishmeal region.
The most important fish species for fishmeal producers in Peru is the Peruvian anchovy Engraulis ringens, also called anchoveta. About 84% of all landings consist of this fish species for which transferable fishing quotas were introduced in 2010. Peru has for over a decade tried to achieve a more sustainable anchoveta fishery. In 2001 satellite monitoring was introduced on large fishing vessels, in 2003 monitoring and control programmes at sea and on land began, and since 2008 there have been maximum catch levels per ship (Leg. Dec. Nr. 1084). The breakthrough came in Peru only with the introduction of transferable fishing quotas however. These are divided up according to fishing shares and capacities of the vessels in earlier years. Since then the fishery has been more plannable, and work on board has become safer. The fishmeal producers can select and purchase the raw materials more specifically, and the quality of their products has risen noticeably since then. Fishmeal in Prime and Super Prime Quality today accounts for about three quarters of total production. The introduction of the quota system led to consolidation of the industry and the industrial fishery has become more profitable. Importantly, the pressure on the resources is now lower because the fishing quotas are based solely on the condition of the fish stocks that are monitored by Instituto del Mar del Perú (IMARPE). A study by the University of British Columbia which compared fisheries management in 53 states put Peru in first place in 2008.
In the medium term the increasing sustainability of the industrial fishery in the South East Pacific will probably lead to less anchoveta being fished and less fishmeal being produced. With that, Peru and Chile, the main producer countries, will have lower quantities available for export which will further reduce supply on the world market.
Consumer concerns complicate the search for alternatives
Even with the available fishmeal alternatives feed producers are often pushed to their limits because useful substances are rejected by consumers for very different reasons. This applies in particular to genetically modified raw materials but also to some animal materials. Sufficient soy is produced worldwide but the share of GM-free soy is decreasing all the time. In the most important producer countries like Brazil, the USA or Argentina over 90% of agricultural land is in the meantime used for the production of genetically modified soy beans. This makes for huge problems for Europe’s feed producers when buying their raw materials because consumers strictly reject genetically modified components in food production. Bottlenecks in fish oil supply are an even greater risk than for fishmeal. Here too, alternatives exist, but for similar reasons as in the case of fishmeal and other reservations they cannot be used fully at the moment:
- Although fermented microorganisms contain the necessary DHA and EPA fatty acids their production is still much too expensive.
- Microalgae would also be suitable but it will take years until sufficient capacities for the production of the necessary quantities have been built up.
- Genetically modified vegetable oils would be the most elegant, least costly, and probably the quickest solution but there is hardly any acceptance among the public for this path.
And so in the end the only thing feed producers can do is stretch the available fish oil through dilution with vegetable oils. In the meantime, however, the options offered by this method are largely exhausted.
The problems with which the industrial fishery and the fishmeal industry are confronted in Europe were clearly portrayed by Esben Sverdrup-Jensen, CEO of the Danish Pelagic Producers Organisation (DPPO), at NASF 2014. The companies in his organisation fish both industrial fish and fish for human consumption with 11 large trawlers (3 more are just being built). Together they hold more than 80% of the Danish fishing quota for pelagic fish species. In 2013 their TAC allowed them 400,000 t of fish, and about 175,000 t of this total were used directly for human consumption. Here, too, a trend becomes visible: that more and more fish is being used directly for human consumption… which further decreases the available raw materials volume for the fishmeal factories. In order to get sound stock data, reliable fishing quotas and a certain planning security the DPPO cooperates closely with fisheries scientists. In this context the international disputes over the mackerel and herring in the North East Atlantic were not exactly helpful. To ease the situation in the fishmeal industry Esben Sverdrup-Jensen demanded that all ecologically and scientifically reasonable resources be used. His organisation thus welcomes the discard ban that came into being with the reform of EU Common Fisheries Policy because it can be expected to enable the use of raw material quantities that were so far unused. Apart from that, the DPPO is examining the possible usage of boarfish stocks (Capros aper).
In the subsequent panel discussion at NASF 2014 Audum Lem (FAO) pointed out what great changes organisations such as the IFFO and numerous companies in the fishmeal industry had recently undergone. In the past they would sooner have acted defensively and tried to reject the accusations of their critics and NGOs. In contrast, they were today much more transparent and tried to enter into dialogue with the public. Perhaps that is why statements by Egil Magne Haugstad (Pelagia) led to open controversy in the discussion. He claimed that there were still some “dark zones” within European fisheries. When determining catch weight, for example, there were various different methods of weighing and not all of them were as accurate as they should be. He accused the Icelandic fishery of partly “drying” blue whiting at sea to achieve a 10 to 15% lower landing weight. Other fishermen filleted their catches at sea and then based the calculated catch volume on too high yields. And when fish were moved from one ship to another the opportunity was often taken to reduce the catch weight. The black sheep in the industry were creative when looking for loopholes to avoid controls. For that reason fisheries controls were urgently in need of improvement. Most other participants in the panel discussion considered these accusations exaggerated, however. The current control system was strict enough and quite sufficient.