GOED: Omega-3 market sees modest growth amid supply challenges
In 2023, the total global volume of omega-3 ingredients reached 124,480 metric tons, marking a 1.4% increase from 2022.
The dietary supplements sector continued to dominate, consuming more than half of the total global omega-3 volume in 2023, Aldo Bernasconi, PhD, vice president of data science at GOED explained.
However, the demand for refined oils in dietary supplements remained flat “due to supply constraints.”
Meanwhile, the pet nutrition segment saw rapid growth, particularly in China and the United States, due to increased pet adoption rates. Other applications, such as pharmaceuticals and infant formula, were found to play a significant role, with smaller volumes but higher-value ingredients driving the market forward.
EPA and DHA
Omega-3 EPA (eicosapentaenoic acid) and DHA (docosahexaenoic acid) are long-chain polyunsaturated fatty acids abundant in fish, shellfish and some microalgae and genetically engineered plants.
The human body needs EPA and DHA during development and to function optimally in every stage of life.
Research links EPA and DHA to favorable pregnancy outcomes, healthy baby and child development, as well as heart, eye, brain and joint health in adults.
Regional Performance
The largest demand for omega-3 demand was reported for the United States and Europe, followed by China, which experienced rapid growth in 2023, expanding by 10%.
Two main factors drove this growth, Bernasconi explained: the expanding middle class in China, which increased demand for omega-3 products, and a recovery from a challenging 2022, when a late COVID wave slowed economic growth and consumer confidence.
The market's recovery in 2023 reflected the catch-up from this slower-than-expected growth in 2022.
Modest growth
Bernasconi said that 2023 saw only modest growth due to ongoing supply issues, particularly affecting the Peruvian anchovy fishery, a major source of crude omega-3 oil.
"The reduction in available crude oil volumes impacted the entire supply chain, making it difficult for manufacturers to meet global demand," Dr. Bernasconi added. "This led to price increases, which in turn drove the sharp rise in the overall market value."
The report also noted that supply shortages forced many omega-3 manufacturers and brands to rely on existing inventories, which dwindled to critically low levels by the end of 2023.
As a result, the industry witnessed an acceleration in the shift from common refined oils to concentrates and specialty oils, which offer a different value proposition to consumers.
Peruvian anchovy fishing
The Peruvian authorities recently set a quota of 2.475 million metric tons for the 2024 anchovy fishing season, signaling a rebound in supply after a challenging 2023. Organizations such as IFFO and GOED welcomed the news, as it indicates a return to healthier biomass levels.
The previous year saw low quotas, largely due to the El Niño event, which impacted anchovy stocks and drove up prices in the omega-3 oil industry.
El Niño is a climate phenomenon where trade winds weaken, causing warm water to shift eastward toward the Americas. It can affect marine life by weakening upwelling, reducing nutrients in the water and disrupting the food chain. Warmer waters may also attract tropical fish species to colder regions.
In 2022, Peru exported nearly 43 million kg of refined fish oils, but in 2023, exports dropped significantly to 19.5 million kg, with prices more than doubling from $4.48/kg to $11.12/kg.
Concerns remain, however, about the potential lower fat content in anchovies due to El Niño’s impact on their diet, which could lead to higher manufacturing costs.
In 2023, authorities canceled the first Peruvian fishing season, and the second produced low yields due to lean fish, creating further strain on the industry.
