Rabobank: Challenging conditions begin to improve as demand increases and costs normalize

According to a recent RaboResearch report, the global aquaculture industry is experiencing positive trends as demand for salmon and shrimp begins to improve in the second half of 2024. Despite ongoing biological challenges in farming these species, the industry is supported by the recovery of Western economies. Feed costs are anticipated to decrease, thanks to a rebound in fish meal supply, providing a silver lining for the sector.

Salmon market: Tight supply and hopeful signs for demand ahead

According to Gorjan Nikolik, senior global seafood specialist for RaboResearch, the salmon market continues to face a tight supply, with prices expected to remain high through the latter half of 2024. Seasonal patterns will influence pricing, but the overall trend suggests that costs will stay above average. Norway and Scotland are poised for a supply recovery, although this remains tentative due to unresolved biological issues. The US and Asia are experiencing depressed demand, which has not allowed prices to offset the high costs resulting from weak biological performance. However, the anticipated reduction in feed costs should offer some relief to producers.

Shrimp industry: Tentative recovery with lower feed costs

“In the shrimp sector, there are indications of a turnaround, particularly in Western markets where demand and prices are gradually increasing as inflation eases,” said Nikolik. The industry is set to benefit from lower farming costs due to improved fishmeal supply. However, the recovery remains fragile, with Chinese import demand expected to decline. The positive supply growth from Ecuador, India, and Vietnam could potentially lead to an oversupply, casting doubt on the possibility of a price recovery in the second half of 2024. The depressed profitability of shrimp farming continues to favor large, sophisticated operations, leading to increased industry consolidation.

Fish meal prices to soften as supply increases

Q2 2024 marked the recovery of the Peruvian anchoveta fishery sector with strong fishmeal and fish oil production. Prices for fishmeal declined, although they have not yet corrected back to pre-El Niño levels. “It may take another good fishing season for the full price correction to occur. Given that La Niña conditions are expected, we also assume good fishing in 2H 2024. This could mean further normalization of fishmeal prices as the commodity remains relatively expensive compared to soybean meal,” Nikolik said.

Source: Aquafeed