Market Insights: Marine ingredients supply off to a swimming start in 2023

The report concludes there were record highs in production of fishmeal and aquafeed in the first months of 2023, while there was a reduction in fish oil production.

The analysis found that overall fish raw material was about 15% higher in February 2023 compared to the same month in 2022.  IFFO suggests that better catches in all regions, bar Spain and the Icelandic and North Atlantic region, were the cause of this.

Dr. Enrico Bachis, market research director at IFFO, states: “Fish raw material depends on fish availability rather than demand, and this year we happen to have more landings in the countries under consideration in our reports.”

However, total cumulative output of fish oil in January and February 2023 was down by 20% in comparison to the same months last year. This is credited to the drop in fish oil production reported in the Icelandic and North Atlantic areas.

The drop was a result of a smaller capelin quota being granted in 2023 after a record-high quota was fixed in 2022 in line with estimated biomass. Bachis explains this is a “natural consequence” of the difference in the quotas granted.

This does, however, mimic the downward trend of fish oil output from 2022, at which time output had decreased by almost 6% in the nations examined by IFFO’s report.

But as Véronique Jamin, communications director of IFFO explains, a drop in fish oil production shouldn’t have a knock-on effect in the supplement industry. She states: “The nutraceutical segment has enough stock of eicosapentaenoic acid (EPA) and docosahexaenoic acid (DHA) to manage the lower-than-expected production of fish crude oil.”

She elaborates that those shortages, much like with any other stock, will guide the market value, stating: “Generally speaking, fishmeal and fish oil utilisation is influenced by market forces. Fishmeal and fish oil are diverted to those markets that can afford to pay the highest price for them.”

Europe​

In Northern European countries, fish oil output in 2022 increased by 45% year on year, mainly on the back of the record-high capelin quota granted in 2022. 

However, Bachis notes: “It is notably too early in the year to evaluate the performance in 2023, as fishing operations for most targeted fisheries tend to speed from the end of March. However, the reduced capelin quota [this year] has had a negative effect on the output of quarter one.”

Fish oil supplements remain popular in Europe, but since Europe is one of the most mature markets, not much growth is expected.

Additionally, according to Bachis: “The pandemic and the high inflation in recent years have not favoured the growth of products that are not perceived as essential by European consumers.”

Peru ​

The IFFO report notes that Peru and China are the industry leaders.

Peru’s second fishing season in the North-Centre region was officially closed on 5th February, with only 84% of the 2.283 million-mt quota landed. 

According to Jamin: “Quotas are imposed in those countries and regions where societies have matured an understanding of the importance of responsible and sustainable management of the fisheries resources.”

Despite the unmet quota, the analysis concludes that cumulative total fishmeal production during the first two months of 2023 was up by more than 55%, compared to the production reported through February 2022. 

It is suggested in the report that the high percentage increase in fishmeal production in Peru is due to the late start of the second fishing season in the North-centre area of the country, so most regions have started the year with improved availability of raw material.

China​

According to the report, China’s marine ingredients and aquafeed production remain subdued, with little time left before the routine fishing ban along the Chinese coastline will be re-imposed on May 1st.

Jamin states: “The immediate effect has been the halving of its domestic supply of marine ingredients over the last 5 years. The aim of imposing such stricter environmental regulations is to allow the domestic fish stocks to rebound and provide more fish for the direct human consumption markets.”

On how the industry combats this, Jamin says: “Only by-products coming from the processing facilities and the fish not considered suitable for the consumers´ markets will be used for the production of marine ingredients.”

The report states that these by-products are getting increasingly important as a source of raw material, together with imports of marine ingredients.