Global Aquaculture Update 2H 2023: Between a Rock and a Hard Place
With demand softening and El Niño driving fish meal prices higher, 2H 2023 is expected to be the most challenging period for global aquaculture since the peak of the pandemic in 2020.
Salmon prices have largely corrected to more normal levels but remain high compared to historical levels. The slump in shrimp demand may even get worse in 2H 2023 as Chinese demand softens. And due to El Niño and high fish meal and fish oil prices, aqua feed prices will not experience the correction that had been expected given lower soymeal prices.
On the demand side, soft demand driven by inflation in the US and Europe is continuing, with salmon appearing relatively better placed than shrimp. Chinese demand is not recovering from the pandemic as fast as expected, resulting in low protein prices and high inventories. Fish meal and fish oil demand seem robust for now, but high prices will force rationing and substitution for many.
On the supply side, salmon supply will return to growth after nearly two years of contraction in Q3. The Asian shrimp industry is facing a challenging period of record-low prices due to oversupply caused by Ecuadorian growth. Finally, El Niño conditions have caused the cancellation of the first fishing season in Peru creating an acute fish meal and fish oil shortage. Aqua feed prices will be supported due to this scarcity of fish meal and oil.