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22 May

Using fishmeal for world domination?

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Fishmeal is one of those things that is so important it is ubiquitous. It is at the basis of livestock and aquaculture operation around the world. However, the Seychelles fishmeal industry is in the doldrums.

 Fishmeal is one of those things that is so important it is ubiquitous. It is at the basis of livestock and aquaculture operation around the world. However, the Seychelles fishmeal industry is in the doldrums. When the government of Seychelles turned over the animal feed factory to the Farmer’s Association there was hope that this vital production would be revived. But the venture collapsed and now livestock feed is being imported.

Prices for fishmeal on the global market have  skyrocketed from roughly USD 800 per metric ton (MT) a decade ago to more than USD 1,700 per MT in 2014, according to the World Bank with some reports showing prices peaking at USD 2,000 per MT recently.

When it comes to providing protein to livestock, high quality fishmeal is clearly the top contender. The recent IFFO report (Marine Ingredients Organization) finds that piglets weaned on super fishmeal outperformed and outgrew piglets fed other feeds such as average-quality fishmeal, soybean meal, fermented soybean meal, linseed meal and fermented linseed meal.

Fishmeal is also essential in the aquaculture industry. Increased aquaculture production is thought to be a way to ease global Food Insecurity . Aquaculture of carnivorous fish require fishmeal which is expensive and   in limited supply.

The South African firm Oceana’s recent  purchase of  the American company Daybrook Fisheries which is a harvester and processor of the menhaden fish should be seen against this background. It is the seizure of an opportunity to strengthen the company’s position in a key and highly competitive commodity market which supports livestock and aquaculture production :

The USD 382.3 million deal was announced last week. Oceana, one of largest fishing companies in South Africa, looked overseas for further growth opportunities. The location and size of the menhaden fishery were attractive to Oceana, The oily and bony menhaden (Brevoortia patronus) is not suitable for human consumption, at least not directly. The Gulf of Mexico resource is one of the key reduction fisheries fueling the growing global fishmeal and fish oil market

Without fishmeal and fish oil, there is no farmed salmon, no tilapia, no sea bass or sea bream.  Fishmeal is becoming highly strategic. Those firms which control the inputs in the food industry will have a lot of market power in future.

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Nirmal Shah

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