According to estimates by the World Wide Fund for Nature (WWF), nearly three billion people already rely on fish and seafood as their primary source of protein – either from wild-caught fish or from aquacultures. The Food and Agriculture Organization of the United Nations (FAO) projects that global fish consumption in 2030 will be 18 percent above 2018 levels. However, more than 90 percent of fish stocks are already either maximally sustainably fished or overfished. Against this backdrop, aquacultures have become much more important in recent years. According to the FAO, aquacultures have been the main source of fish for human consumption since 2016. In 2018, the share was 52 percent and will likely continue to rise in the long term, the organization expects.
Last year, 768 million people were facing hunger
“Although aquacultures have become indispensable for feeding the world’s population, they are also associated with major problems. These include the feeding of fish meal and oil, which leads to overfishing, the massive use of antibiotics, and the CO2-intensive long logistics chains, since aquacultures are usually located in cold-water areas. However, the industry is currently at a turning point thanks to numerous innovations such as alternative feeds and better disease prevention for the animals. This is enabling sustainable growth that can feed a large and possibly increasing number of people,” Paul Buchwitz, portfolio manager of the DWS Invest SDG Global Equities, says in view of World Food Day on 16 October. On this date, as many people as possible should be made aware of the global food situation: Last year, about 768 million people worldwide were facing hunger. In the shadow of the coronavirus pandemic, the number has thus increased by around 118 million compared to 2019. October 16 was chosen as the date because it was on this day in 1945 that the FAO was founded to ensure global nutrition.
"Zero Hunger" is also one of the 17 Sustainable Development Goals (SDGs) of the United Nations. They are intended to ensure sustainable development worldwide at the economic, social and ecological levels. The SDGs came into force on January 1, 2016, and run until 2030. With DWS Invest SDG Global Equities, portfolio manager Buchwitz aims to ensure that on average at least 50 percent of revenue contribute to achieving the 17 SDGs.
Extraction of fish meal and oil causes sardine stocks to dwindle
However, the advent of new technologies in aquaculture is not only improving the outlook for the global food situation, it is also creating attractive investment opportunities, for example in the production of feed. "Basically, food is better converted by fish than by other animals. Atlantic salmon in aquaculture, for example, needs 1.2 to 1.5 kilos of feed to gain one kilo in body weight. A cow, on the other hand, needs six to ten kilos," says Buchwitz. However, the production of food also accounts for around 55 percent of the greenhouse gas emissions of aquacultures, as the feed is partly made up of grain, for which fertilizers, land consumption and transport routes have a negative impact. Another component of the diet, he said, is fish meal and oil. "However, fishing for the production of these two components of the diet has already led to massive overfishing of key species such as sardines in West Africa, for example," the portfolio manager says.
This is why alternative feed is so important. For example, the larvae of the black soldier fly can be used to produce a foodstuff with a protein content of 55 percent, which can not only be fed to fish but is also suitable as a substitute for the controversial palm oil. In addition, omega-3 fatty acids for fish food could also be produced on an industrial scale by fermenting the marine microalgae Schizochytrium sp.
Fighting bacteria with viruses instead of antibiotics
"Another problem, as with all factory farming, is the extensive use of antibiotics and the development of resistance to these drugs," Buchwitz says. But here, too, great progress has been made recently. For example, there are now vaccinations for fish kept in aquaculture, a market that is currently growing by ten percent a year. In addition, bacteriophages, viruses that specialize in bacteria as host cells, are increasingly being used to treat bacterial infections, thus avoiding drug residues in the animals.
Buchwitz sees another important growth market in technologies for optimizing and monitoring the sustainability of aquacultures. "For example, one company is using video cameras and artificial intelligence to track feed pellets as they move through the water to optimize their use," he says. In addition, blockchain technology is already being used for greater transparency in supply chains, he adds.
About DWS Group
DWS Group (DWS) is one of the world's leading asset managers with EUR 859bn of assets under management (as of 30 June 2021). Building on more than 60 years of experience, it has a reputation for excellence in Germany, Europe, the Americas and Asia. DWS is recognized by clients globally as a trusted source for integrated investment solutions, stability and innovation across a full spectrum of investment disciplines.
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