Japan's aquatic feed market is expected to grow at a compound annual growth rate of 1.64% over the forecast period to reach US$665.703 million by 2027, from US$593.874 million in 2020. Aquatic food commonly refers to food prepared specifically for aquatic animals. They are formulated with a vast array of ingredients to provide the animal with a sufficient supply of proteins and nutrients necessary to perform normal physiological functions. Some of the most commonly used aquatic feeds are fishmeal, fish oil, soy protein, wheat, peas, and wheat gluten. Japan is situated on a chain of islands, called an archipelago, and comprises four main islands and thousands of smaller ones. As its terrain is mountainous, suitable land for farming is limited. Thus, due to its geographical limitations, the majority of the Japanese relied on the sea for their livelihood for decades. Thus, Japan's aquaculture market has seen rapid development ever since the Second World War and is now occupying a dominant position in the fisheries sector. With the rapid development in aquaculture, the aquatic market feed size is also bound to increase. At the same time, due to limited agriculture, Japan has to depend upon imports for raw materials for aquatic feed. Nonetheless, in the past 20 years, though the aquaculture industry in Japan has matured, it has also stagnated due to changing demands.
MARKET TRENDS
Japan’s update in its strategies to expand its production and exports is promoting the aquafeed market size in the country.
According to the statistics reported by the Food and Agriculture Organisation of the United Nations, Japan occupies the ninth position in terms of marine capture and production. The Japanese government has decided to increase the exports of seafood, as there is a great potential in the steadily increasing global market. According to the OECD, exports in the last decade increased by 36%. Furthermore, according to the Japan Fisheries Agency (JFA), a subdivision under the Ministry of Agriculture, Forestry, and Fisheries (MAFF), the exports of food items, agricultural, forestry, and fishery products collectively saw a record high leap to 98 billion yen in 2020. The government plans to boost exports by 2 trillion yen and 5 trillion yen by 2025 and 2030, respectively. The collaborative plans within the countries are also expected to increase sales. For instance, in April 2022, the Japanese and Russian governments entered into negotiations over the fishing quota for salmon and trout spawned in Tokyo rivers earlier. The results of the negotiations are also expected to affect the market during the forecasted period. Coupled with these factors, a rise in intensive farming, feeding management practices, and advancements in stocking and feeding densities are also anticipated to proliferate the aquatic feed market growth.
The strategic initiatives and collaborations undertaken by companies across the country are also bound to propel market sales.
Inspired by the rise in demand for salmon across the globe, the Conservative Fund’s Freshwater Institute strived to use this chance to aid the salmon farmers to propel the development to meet this demand. With such an objective, the institute decided to collaborate with Cargill, a global leader in animal feed solutions and announced a multi-year agreement to evaluate, develop, and enhance feeds for the growing land-based aquaculture industry in September 2021. Several such initiatives taken by companies are propelling the market growth in Japan.
Restraints
Demands for food, in particular livestock, are expected to expand with global population growth in coming years and with increasing incomes and livelihoods from economic advancements in developing nations. Consequently, feed materials are being significantly impacted by the changing global trends in aquaculture resources as well. And Japan predominantly depends upon imports for the majority of its food resources. The challenges for the feed market in Japan are numerous, such as a shortage of labor, abolition of tariffs concerning multinational economic partnership agreements, and so on.
Japan’s aquaculture has developed significantly and matured in the past two decades. But in the past few years, its production has stagnated and declined. Stagnant and declining aquaculture production has also affected the aquafeed market. One of the major reasons for this setback is that Japan, which was once one of the top consumers of seafood globally, has been on a steady decline in the past couple of years. The increasing western influence on dietary and living conditions in the country could be one of the reasons. Nonetheless, the government has strategized several initiatives to counter this and expand the seafood market. Thus, in the past few years, Japan’s seafood market has seen a rise yet again.
Covid-19 Insights
The impact of COVID-19 on Japan was moderate. As a home to many top ten global feed-producing countries, the largest growth was observed in the Asia Pacific with a 2% growth factor amidst the global pandemic according to the 2021 Global Altech Feed Survey. In particular, the aquafeed industry showed steady, impressive growth and increased by 3% in the Asia Pacific. The increasing prevalence of RAS (Recirculating Aquaculture System) and the rising consumer demand for fish are factors responsible for significant growth in the sector. About 65% of the survey’s respondents remarked the steady development of RAS was ongoing within their countries.
Key Market Segments