A spate of new investment in aquafeed facilities across China in recent years may be about to taper, according to a new Rabobank report.
Future aquaculture production growth in Asia will be limited by environmental constraints, according to “Swimming in a Crowded Market,” which was authored by Lief Chiang, the bank’s Shanghai-based grains and oilseeds analyst.
Regional aqua-farming production is slowing as a result of stricter environmental regulations and reaching a ceiling on the natural resources available for fish farming, Chiang found.
“This provides opportunities for industrialization and innovation along the value chain, in which aquafeed players can play a crucial role and achieve value growth,” Chiang wrote.
Aquafeed producers like Tongwei Group and Guangdong Haid are key sources of nutritional advice for Chinese farmers of fish and shrimp, but China's feed market is often characterized by fierce competition based on price, Chiang found.
A high occurrence of disease and rising labor costs in Asia mean that production of high-value aquaculture products like shrimp will increasingly center on Latin America, Chiang noted.
“Asian aquaculture needs to offer more value-added options. Quality, food safety, and traceability will be increasingly emphasized, thus requiring the development of functional feed and the utilization of advanced digital technology,” Chiang wrote.
Rabobank projects an increasing use of plant protein meals and other protein sources to replace fish meal in aquafeed formulas. To achieve more sustainable but cost-effective aqua-farming, more R&D efforts are needed on feed formulation, genetic improvement, and animal health.
The Rabobank report notes a shift away from a traditional dependence on exports among Asian aquaculture producers to more emphasis on domestic markets. The Rabobank report noted intraregional trade within Asia has been increasing to feed growing Chinese demand for high-quality aquaculture products, with an emphasis placed on food safety and traceability, Chiang said, pointing to Vietnam and Indonesia as the primary beneficiaries from this trend.
“Domestic consumption of fishery products is also likely to increase in Southeast Asia, which is expected to boost domestic aquafeed use, particularly in Indonesia, Vietnam, and Myanmar,” Chiang wrote, saying he expects increased aquaculture-related outbound investment and M&A activities in these countries.
Photo courtesy of Guangdong Haid
