FAO Fisheries and Aquaculture Technical Paper No. 541

FAO FISHERIES AND AQUACULTURE TECHNICAL PAPER No. 541

Impact of rising feed
ingredient prices on
aquafeeds and aquaculture
production


Krishen J. Rana
Sunil Siriwardena

Institute of Aquaculture
University of Stirling
Stirling, United Kingdom of Great Britain and Northern Ireland

and

Mohammad R. Hasan
Aquaculture Management and Conservation Service
Fisheries and Aquaculture Management Division
FAO Fisheries and Aquaculture Department
Rome, Italy



FOOD AND AGRICULTURE ORGANIZATION OF THE UNITED NATIONS
Rome, 2009

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© FAO 2009

Rana, K.J.; Siriwardena, S.; Hasan, M.R.
Impact of rising feed ingredient prices on aquafeeds and aquaculture production.
FAO Fisheries and Aquaculture Technical Paper. No. 541. Rome, FAO. 2009. 63p.

Abstract

It is now widely recognized that the rising demand for aquatic products will have to be met by aquaculture. The future of aquaculture will depend on how well it meets this challenge. The contribution of aquaculture to total fishery products (excluding plants), globally, has steadily increased from 4 percent in 1970 to 36 percent in 2006 and is continuing to increase. The growing importance of aquaculture in overcoming production limits of capture fisheries can be judged from the fact that Chinas 2004 aquaculture production was about 70 percent of its total fisheries production. By 2020, global aquaculture is expected to contribute about 120130 million tonnes of fish to meet projected demands. The types of species/species groups dominating fed aquaculture production and the recent focus to increase and intensify production of crustaceans, marine finfish, and diadromous fishes, reflects a tendency to increasing reliance on aquafeeds, for their production, and particularly commercial diets. It is, therefore, crucial that aquaculture is sustainable and that the resources required for promoting aquaculture are secured. Key resources required to meet this challenge are aquafeeds and the ingredients used in their production. These resources, together with high transportation costs as a result of costly energy, form the central part of this study.

Fed aquaculture relies on a basket of common input ingredients such as soybean, corn, fishmeal, fish oil, rice and wheat, for which it competes in the marketplace with the animal husbandry sector as well as with use for direct human consumption. Many of these key ingredients traditionally used in recipes for commercial or on-farm aquaculture feeds are internationally traded commodities. Therefore, aquafeed production is also subjected to any common global market shocks and volatility. Since 2005, the basket commodity price index (CPI) rose by about 50 percent and the prices of soybean meal, fishmeal, corn and wheat rose by 67, 55, 284, 225 and 180 percent, respectively. Similarly, the cost of major oils used in the aquafeed industry has increased by up to 250 percent. The aquaculture industry is, therefore, not immune to this global phenomenon and the major concern is how it will impact aquaculture. Specifically, smallholders and rural farmers may particularly be susceptible to these global changes and the fallout may further contribute to their poverty and vulnerability. Considering such developments, this technical review evaluates the underlying reasons for the recent dramatic rise in prices of these commodities used in aquafeed production and its consequences for the aquafeed industry and, in particular, on demand and expectations from aquaculture in securing current and future fish supplies.
This technical paper also discusses issues related to availability of and access to land and water resources, and the impact of other sectors using these resources on the direction of aquaculture both in terms of species produced and the production systems. In the light of probable increase in competition for land and water in many aquaculture producing countries in Asia, there will inevitably be increasing pressure to intensify aquaculture productivity through the use of more commercial feeds than farm-made feeds. Urbanization has influenced both the level and distribution of income and dietary habits which are driving upwards the demand for high-value fish species with significant implications for feed supplies. Due to the increasing prices of ingredients, aquafeed prices, especially the prices of compound aquafeeds, may increase further and a shortfall in the local supplies will compel importation of aquafeeds. Of the ingredients, fishmeal and fish oil are highly favoured for aquafeeds and aquafeed production is under increasing pressure due to limited supplies and increasing price of fishmeal and fish oil. This review also outlines initiatives that are searching for substitutes for fishmeal and fish oil so as to position the industry to meet the challenge of securing aquafeed for sustaining aquaculture.
To regulate the rising commodity prices would require governmental interventions.
A brief overview of coping strategies to strengthen national capacity to address the issue of aquafeed supply and to mitigate rising prices of aquafeed ingredient is given. These strategies include policies, research and private sector and farmers’ initiatives.


Contents


Preparation of this document (Download pdf 243 kb)
Abstract
Contributors
Introduction
Abbreviations and acronyms

1. Assessment of aquaculture production with special reference to Asia and Europe  (Download pdf 826 kb)
1.1 Recent trends in aquaculture production
1.2 Projected global aquaculture production with contribution from Asia and Europe and the implications for aquafeeds
1.3 Emerging trends in aquaculture practices and the implication for feed demand
1.4 Fish consumption patterns in Asia and Europe and the implications for the use of feed in aquaculture
2. Status of and trends in aquafeeds with special reference to Asia and western Europe  (Download pdf 2,170 kb)
2.1 Impacts of recent market volatility on aquafeeds in western Europe and Asia
2.2 T ypology of compounded aquafeed production in western Europe and Asia
2.3 T ypes and composition of aquafeeds used
2.4 Positioning of the industry to meet the challenge of securing aquafeed to sustain aquaculture
2.5 Research aimed at sustainable supplies of aquafeeds
3. Potential impact of nutrient substitutes in aquafeeds on fish health and on the food safety of aquaculture products  (Download pdf 55 kb)
3.1 Impacts of rising aquafeed costs and price volatility on the health and productivity of fish
4. Coping strategies and management measures to strengthen national capacity to ensure aquafeed supply  (Download pdf 74 kb)
4.1 Government and policies
4.2 T he role of regional/international organizations
4.3 Role of the private sector
4.4 Farmers’ coping strategies to mitigate the rising costs of aquafeed
References  (Download pdf 163 kb)