Salmon is poised to maintain its status as the most lucrative sector in aquaculture throughout the first half of 2024, according to the latest Global Aquaculture Update from Rabobank, based in the Netherlands. The report, titled “The new normal,” indicates that the global salmon industry will continue to outpace other aquaculture sectors in terms of profitability. Meanwhile, the shrimp farming industry is grappling with ongoing challenges, including oversupply, low prices, and weakened Chinese import demand.

In contrast to the struggles faced by shrimp farmers, the forecast brings positive news for salmon farmers. The global fishmeal supply is anticipated to improve, leading to the normalization of prices. The impact of El Niño in Peru is waning, although potential risks persist. The demand for fish meal remains robust, but the influence of lower-priced vegetable alternatives may come into play.

The report emphasizes that normalizing salmon supply, coupled with improved fish meal and fish oil production, will result in a marginal softening of prices in 2024, establishing a new, higher price normal. Conversely, for the shrimp industry, the persistently low prices may become the new normal.

In 2023, the shrimp farming industry faced one of its most challenging years in over a decade. Weak shrimp demand in the West, combined with a continuous oversupply from Ecuador, resulted in price levels even lower than the lowest point during the pandemic in the second half of 2020. Elevated feed prices further compounded the industry’s woes.

Gorjan Nikolik, Senior Global Seafood Specialist at Rabobank, warns that without a reduction in supply, shrimp prices will remain at these low levels. The weakened Chinese import demand, high inventory levels, and a slightly lower renminbi are expected to hinder a recovery in shrimp prices. Despite expectations of increased demand in China following the easing of Covid-19 lockdowns, the actual consumer demand for shrimp fell short of projections, potentially reducing imports to the country.

The report anticipates a global reduction in shrimp production, particularly impacting producers in Asia. Even the most efficient producers are struggling to break even at current price levels, according to Rabobank. While the outlook for US shrimp imports appears optimistic after a 20% year-on-year fall in value in October 2023, growth in demand is not expected to be significant. Similarly, demand in Europe is projected to remain soft.