Salmon supply growth ‘will slow through next two years’
Limited expansion in Norway and Chile may open the door for Faroes and Iceland, says Rabobank
Salmon production growth will slow in the coming years, Rabobank said today in a new global aquaculture report summarising the key takeaways from the Global Seafood Alliance (GSA) GOAL Conference 2022.
After a volatile 2021 that saw Norway expand year-on-year supply by 11.9% and Chile contract by 7.7%, this year is expected to deliver the first overall salmon production decline since 2016.
“Slow growth in 2022 is expected to be followed by volume expansion of roughly 4% in both 2023 and 2024,” said Rabobank seafood analyst Novel Sharma. “Supply for Norway and Chile in 2022 is expected to decline by 0.9% and 0.3%, respectively, followed by normalisation of growth from 2023 to 2024, as both countries use regulatory controls to moderate supply growth.”
Cumulative supply growth for Norway and Chile between 2022 to 2024 is expected to drop to 3.1%, compared to the previous decade’s 7% compound annual growth rate.
“These lower growth expectations for Norway and Chile create an opportunity for Iceland and the Faroe Islands to become more relevant drivers in global supply this decade,” added Sharma.
The Faroe Islands experienced strong growth in 2021, expanding supply by 31% versus 2020, but volumes for 2022 and 2023 are expected to decline by 4% and 1%, respectively, followed by a 10% increase in 2024, which would put Faroe Islands production above its previous 2021 peak production volumes.
Iceland increased its volume by 44% in 2021, making it the fastest-growing producer in percentage terms.
Expectations are that the country will reach 51,000 tonnes by 2023, exhibiting year-on-year growth of 7.8% in 2022 and 6.2% in 2023.
The report also predicted that global shrimp supply could reach a record 6 million tonnes next year.
Ecuadorian shrimp production is set to top 1.35 million tonnes this year. This would give Ecuador its largest single-year volume growth recorded, adding over 300,000 tonnes in supply – only slightly lower than Thailand’s total annual production. Continued growth driven by Ecuador will lift the Americas over the 2 million tonne mark by 2023.
Asia, the largest shrimp producer, is expected to experience its first production decline (-0.1%) since 2013. In 2023, however, Asian production is expected to rebound, lifted by higher production in China and India and a slight increase in Vietnam, pushing Asian production above 4 million tonnes.
Sharma said: “Overall global shrimp supply in 2022 is expected to increase by 4.2%, driven primarily by Ecuador and the Americas, which compensate for flat growth in Asia. The industry remains optimistic about supply in 2023, as Ecuadorian supply growth is expected to be supplemented by a strong recovery in Chinese production of 9.5%.”
Aquafeed and market prices have consistently been the top concerns for fish farmers over the past few years. Market prices were the key concern in 2021, according to Rabobank’s 2021 Global Seafood Alliance GOAL Survey. “However, the markets for feed ingredients have been volatile since start of the war in Ukraine,” said Sharma. “This has pushed aquafeed prices to the top as fish farmers’ primary concern heading into 2023, with low expectations for prices to decline in 2023.
“Industry participants also highlighted growing concern about feed quality. Producers are also increasingly worried about their access to credit as central banks raise interest rates in order to combat inflation and lenders curtail credit.”