Rand News

Peru’s seafood exports nearly double in 2018

logo

In the first five months of 2018 Peruvian fish exports for human consumption rose 80% compared with 2017, according to the fisheries and aquaculture committee of the country's national society of industry (SNI). This trend is expected to continue in the coming months, according to government agency PromPeru.

"In the last ten days giant squid catches dropped significantly and prices rose. At present raw material is priced between $1,000 and $1,400 per metric ton by the fishermen," one industry source told Undercurrent News on June 13.  The seafood exports target can continue to increase, Karl Berger, coordinator of the fisheries product department at PromPeru, told Undercurrent News.

"Production of shrimp --both aquaculture and reprocessed-- is increasing, but with low market prices maybe the increase will not be that visible. Scallops are also coming more especially in July, August, September so we will perform better for sure, despite price fall. Giant squid production in March, April, May was pretty good," said Berger, adding that output was "sensitive to ocean conditions" and it was therefore difficult predict future catches.  "Other products are important in the context of Peru's seafood exports, but not in volumes to change figures. Trout volumes will be slowly growing. Tuna also is driving exports to some markets," Berger added.

Peruvian landings of fish for human consumption showed "an important improvement in 2018 so far", with a rise in exports helping the sector to "start a strong financial recovery", Milanovitch said, pointing out that the industry has been severely affected by low catches recorded between the second semester of 2016 and November of last year.  Processing plants in Paita had been working at 15% of their installed capacity, due to shortage of raw material, pressuring the finances of most specialized companies in the country. 

Milanovitch indicated that the seafood for human consumption sector involves the freezing, canning and dry-salted fish industries, which concentrates 85% of employment in the fishing sector and that contributes to more than 51% of the fish exports' revenue in foreign exchange.  The committee's new board requested an appointment with the president of the council of ministers, Cesar Villanueva and Peru's new production, Ricardo Perez-Reyes, with the goal to get further support to the sector.

Milanovitch also wants to propose the restructuring of state institutions such as the Peruvian health body Sanipes, which "today suffocates the industry with regulations and useless, unenforceable demands that are causing the collapse of the fishing industry", he said, as well as the reduction of "high taxes imposed on companies" and "simplification of the multiple obstacles and administrative costs".

Restart Blur Revolution

logo

Aquaculture holds the future, but at the same time is facing challenges such as pressure on the environment and the control of diseases like sea lice.  Disease challenges, environmental pressure, overall reputation of the sector, use of antibiotics and the need to ‘simply’ produce more fish for a growing world population are just a few key challenges for today’s fish and shrimp farmers around the world. We started the so-called ‘blue revolution’ in the early 2000s (when the term was introduced by magazine The Economist). Nesse now says it is time to restart this revolution.

What do you mean with re-starting the blue revolution. Is aquaculture not growing fast enough?

“Since the late 90s, aquaculture has seen tremendous growth figures of 6-7% year-on-year around the world, spurred by the high demand for more animal protein. Fish is often mentioned as one of the preferred choices (as all cultures can eat it) and aquaculture is projected to supply over 60% of the total fish to consumers by 2030. However, aquaculture seems to have come to a standstill now, reflected in only a 1.4% growth over the last 5 years. The year-on-year growth in shrimp is only 1%. In salmon farming we only see moderate growth figures in the past few years. It seems that something is not working like it should. One important factor is that we lack in the ability to manage diseases properly. This is why we have to invest more in research and development in looking at new production systems, such as contained solutions. This will enable us to better control the animals and the environment.”

This means that innovation and new technologies are in high demand for aquaculture. Is this the reason why you have set up Nutreco NuFrontiers?

“Yes, certainly. Nutreco NuFrontiers is an exciting mission we started last year, spearheaded on innovation and collaboration. We focus, for example, on start-up and scale-up companies to give us better access to biotechnology and new insights and research on functional ingredients and new commodities. We also focus on new, sustainable concepts and models (game changers) and if we get granted the development licenses then we can move forward with 2 exciting pilot projects we have selected in Norway. One project is a contained solution in the Norwegian fjords (it will be the first in Norway). The innovative thing about this is that it is suitable for different fish species. The second pilot is aimed at moving salmon production from the fjords to the open ocean. If these pilot projects work, we can scale up and Norway can be, once again, an example for other countries. It is the start of a new type of fish farming. Within Nutreco NuFrontiers, collaboration is also very important. Think of the Global Salmon Initiative, SeaBOS, the Pincoy Project in Chili and the Sustainable Shrimp Partnership.”

The aquaculture industry in Norway is changing as well. What are the challenges here in the land of Salmon?

“We see that the salmon industry in Norway is also experiencing challenges in terms of growth. Since 2012, we have seen flat growth. Traditionally, many salmon farms are based in the fjords, but partly because of environmental pressure and consumer perception salmon farmers are having trouble getting licenses for further growth. So the trend is to move the farms more to the open sea. Because there are limits to how much we can still grow in Norway, Nutreco is very active in looking for growth outside the country. Over the last few years, we have increased our fish feed production sites and have now have production sites in 20 countries around the world. We see growth in Ecuador and several countries in Africa, like Nigeria. We invest where we can grow.”

And what about innovation in fish feed? What are the game changers here?

“We invest a lot in optimising our fish feed and we focus on new sustainable raw materials and new specialty ingredients. 10 years ago, it was quite normal to include 60-70% of fish meal and fish oil in fish diets. Now, we try to minimise the dependence on marine ingredients as much as possible (even to 100% in salmon) and focus more on plant-based protein sources (such as sustainable sourced soy) and new types of ingredients that are being developed. Think of algae meal and oil for example. Another focus of ours is to develop preventive health concepts. Fish should be as strong as possible, with a healthy immune system and gut. This will help us to control and prevent disease outbreaks and hence reduce the need for antibiotics as much as possible. So gut health is a very important topic from us. We can learn from our livestock feed business Trouw Nutrition using the insights and R&D from pigs and poultry about how certain feed ingredients can have a positive effect on the intestinal health, for example. In this aspect, aquaculture is behind the conventional livestock sectors. But we are stepping up and developments are moving quicker than ever.”

You are leaving the company in an era where aquaculture is back on the agenda. Do you regret this and will you be active in the business?

“I am leaving Nutreco as of October 1st, 2018 after spending 23 years in this company. I was relatively young when I became CEO of Skretting, now 12,5 years ago. 6 years ago I became CEO of Nutreco. The reason I am stepping down is that I want to do things differently now after spending many years dedicating myself to the company. The company is very well organised and in excellent shape, so I am therefore not sad on behalf of the company. But I feel a bit sad at a personal level. It is hard to leave a company where you have spent so many years. What I will do next? I will move back to my home country Norway with my family after living in the Netherlands for many years. Norway is known for aquaculture, so don’t be surprised if I remain active in the business. 

Vietnam’s rapid expansion of pangasius farming draws concerns

Vietnamese authorities and industry players have expressed concerns as many farmers in Mekong Delta have rushed to develop new pangasius farming areas with the hope of cashing in on prices that have been at or near all-time highs since last year.  Vietnam’s Ministry of Agriculture and Rural Development recently sent a letter to officials in provinces and cities in the Mekong Delta, asking them to take actions against what it called “the massive expansion of pangasius farming areas.”

As prices of fingerlings and raw pangasius have risen sharply since early 2017, many farmers in the region have converted their rice fields to fish ponds, despite their lack of training or experience in farming fish. Their unplanned expansion, their use of fingerlings of low quality and their lack of farming skills will potentially result in environmental pollution, spread of disease, and imbalance of demand and supply, the Agriculture Ministry said.

The increase in demand and insufficient supply of raw pangasius have together translated in the average price in Vietnam in April reaching VND 30,000 (USD 1.32 or EUR 1.10) per kilogram, around 1.5 times higher year-on-year. The massive expansion of pangasius farming areas also drove demand for fingerlings, with average price jumping to VND 80,000 (USD 3.51 or EUR 2.94) per kilogram in the month, up about three times from the same month in 2017, the ministry said in another statement.  The expansion’s epicenter is in Long An Province, which saw the farming area increasing by 800 hectares between the end of 2017 and April 2018. Most of the new ponds were converted from rice fields, according to local media reports. 

Profit from pangasius aquaculture is currently about 10 times higher than rice farming in the Mekong Delta, the country’s most important rice-producing region, driving the surge in pangasius farming. The newcomers are different from large-scale operations who have been in business for many years, and whose farming processes are strictly in compliance with international food safety and quality management standards, the Agriculture Ministry said. Much of Vietnam’s exports of high-quality pangasius products come from these suppliers.

The Vietnamese government in May last year issued a decree which demanded that any pangasius ponds be located in accordance with land use plans approved by local governments. The government also asked aquaculture facilities to get certificates on identification number for ponds farming pangasius.  To ensure the sustainable development of the pangasius industry in 2018 and the coming years, the provinces and cities have been told to closely monitor the expansion of pangasius farming in their areas and strictly punish those who break the rules, according to the Agriculture Ministry’s letter.

Industry analysts are concerned the oversupply that took place in Vietnam in 2011 will reoccur if the rapid unplanned expansion of fingerling and raw pangasius farming areas continues.  Prices of fingerlings are expected to fall starting in May and June 2018, while the rates of raw pangasius are likely to go down in late 2018 or early 2019, VietnamPlus reported 27 April, quoting the Fisheries Department.

Ong Hang Van, deputy manager of local processor Truong Giang Fishery Company, agreed. He warned that oversupply of raw pangasius is likely to happen in November or December this year and price declines are inevitable, according to the daily.  China has become the biggest buyer of Vietnamese pangasius recently, and this huge market is ready to buy a “very large amount” of pangasius from Vietnam, Van said. But he added that those who do not have certificates on identification numbers for farming ponds and other necessary certifications will have difficulties in selling their products. They may be forced to sell at low prices in the future.