Brazil has “all the ingredients to become an aquaculture superpower" with the long term potential to compete with China's tilapia industry, according to a report published by Rabobank called Feeding Nemo.

Rabobank predicts that Brazilian tilapia production will increase by 10% a year, getting close to 500,000 metric tons by 2020, driven partly by a new entrant. 

“The entry of Regal Springs – the world’s largest tilapia farming company – may be the final ingredient to boost future production of the industry in Brazil,” the company said. 

Last year, Regal Springs and Axial Holding created a new company called Tilabras with the goal of producing 100,000 metric tons of tilapia in Brazil by 2020. 

“With all the necessary components in place, Rabobank forecasts tilapia production in Brazil to surpass 490,000t by 2020. This would make Brazil the world’s fourth-largest tilapia producer, after China, Indonesia and Egypt,” the report said. 

Major feed companies, including Nutreco, InVivo NSA and Cargill, have taken notice of the country's potential and have already entered Brazil. 

AquaGen, a fish genetics company and a part of EW Group, also recently entered the Brazilian tilapia genetics industry after acquiring a local producer. 

Brazil’s tropical climate and freshwater resources are ideal for growing tilapia and other Amazon species such as tambaqui, the report said. 

“In Brazil, tilapia is now the largest aquaculture industry and one with a particularly bright future,” the report said, adding that in the long term, Brazil may even be able to compete with the Chinese frozen tilapia fillet market. 

A key factor in the growth is the country's rapidly expanding grain production which will likely drive production growth in its tilapia and tambaqui, a native Amazon species. 

“Much of the expansion will be supported by rapidly expanding Brazilian grain production, particularly in the Midwest, where abundant supply coupled with underdeveloped logistics, acts to keep the local grain prices low,” the report said. 

Combined corn and soybean production in Brazil has increased from 88 million metric tons in 2006 to 160m metric tons in 2016. 

The country has “unmatched” potential for expanding its grain production, especially corn and soybean -- the two most used grains for fish feed -- which helps put the country in a position to “fulfill the market’s growing demand for fish products”. 

“The opportunity to source grains at competitive prices from [Brazilian regions growing them] has been enticing for fish producers. This is especially significant, as feed accounts for around 70% of tilapia and tambaqui production costs,” the report said. 

"[Brazilian grain producers] have already taken the step of adding value to their grain by producing other animal proteins, such as beef cattle. It now seems that aquaculture will also attract their attention," the report said. 

Currently, Brazil still trails behind countries like China, India, Chile and Ecuador in terms of aquaculture exports, however since 2014 Brazil’s economic environment has become more conducive to aquaculture development. 

Its ongoing political turmoil and economic turndown -- accompanied by high inflation and rising unemployment -- as well as a considerable devaluation of the country’s currency will likely aid development of the aquaculture sector, the report said. 

The Brazilian Real has decreased in value from BRL 2 per dollar at the beginning of 2013 to nearly BRL 3.3/USD in June 2016, “and it is even expected to decline further to BRL 3.5/USD during the second half of 2016”, which has strong implications for domestic industries competing with imports, particularly its aquaculture sector. 

According to the report, the sector is expected to evolve first to supply the domestic market and possibly substitute imports which have been falling. 

“As a locally farmed and relatively low-cost fish, tilapia is ideal for the current recessionary environment,” the report said. 

In the medium-term, the next stage of development will be to enter the fresh fillet export market, after which it will be able to grow and “it may even be possible to compete with China on the frozen fillet market”. 

Emerging market for Amazon speices 

Production of tambaqui, a native freshwater species also known as cachama, has significantly increased over the last few years and “has become the local champion in Brazil”. 

The species is easy to farm, has few diseases and a strong resistance to environmental changes with a feed conversion rate similar to poultry. 

Although the fish is more expensive to produce due to the higher feed conversion rate, the prices for the fish also tend to be higher. 

Another emerging Amazon species is the pirarucu also known as paiche. 

“At the moment, a very young industry of piarucu farming is expanding rapidly,” the report said. 

The species is known to grow quickly, with the ability to reach 12 kilograms in one year. The fish are also “sturdy” and able to breathe air and can be farmed intensely. 

“As challenges around juvenile production are solved and improved feed is developed, this industry should grow rapidly,” the report said. 

There are no large, established companies that have experience farming these species, so all knowledge will have to be developed by local farmers, companies and research institutions. 

There is, however, an established local market for wild caught fish. Whole fish can be sold in local markets with minimal processing and there is little direct competition from imports. 

“Rabobank believes that tambaqui production in Brazil has the potential to surpass 330,000t by 2020,” the report said. 

Publicado em 16/08/2016