Global Aquaculture Update 1H 2023: Recession and Inflation Creating Uncertainty
After a positive 2022, demand is reaching an inflection point as recession follows inflation. Salmon is proving to be a resilient species, with demand holding firm even as other species are affected by recessionary consumer behavior. Meanwhile, softer demand and high supply have generated a low-price scenario for shrimp that will persist in 1H 2023. An ongoing global scarcity of feed proteins means fish meal prices are expected to be firm, despite the partial correction of soymeal prices.
Salmon prices are expected to remain high but will fall below 1H 2022’s peak. In contrast, low shrimp prices are likely to bottom out in 1H 2023 or later in the year. Fish meal prices remain supported by good demand and limited supply growth.
Demand drivers: Recessionary behavior is established in both retail and foodservice in the US and Europe, with shrimp demand more affected than salmon. Demand for shrimp and fish meal in China has increased, partly due to the relaxation of Covid-related restrictions. But new outbreaks and fear of infection may yet impact China in early 2023.
Supply drivers: Salmon supply will remain tight in 2023, with normalized growth not expected until 2024. Moreover, the proposed Norwegian tax adds uncertainty. Meanwhile, shrimp supply growth in 1H 2023 will be much lower than in 2022 but will still be positive, mostly due to Ecuador. Even though Peru starts 2023 with an 11% higher quota, a 100% catch rate is needed for fish meal supply to improve. Overall costs are still high despite recent corrections in feed commodity, energy, and freight costs.