El Niño and the impact on aquaculture

According to Food and Agriculture Organization of the United Nations (FAO) State of World Fisheries and Aquaculture (SOFIA 2026 report) estimates, global fisheries and aquaculture production reached a record 235 million tonnes in 2024, of which 195 million tonnes aquatic animals, which are increasingly central to diets. Almost 90% of production of aquatic animals goes to human consumption, supplying at least one-fifth of the animal protein consumption of 3.1 billion people, becoming key in the fight against food insecurity.

The sector also supports more than 600 million livelihoods worldwide and could generate between 13 to 22 million new jobs by 2050 only if stakeholders capitalise on the $1.5 trillion dollar investment opportunity in the sector during the same period. Aquatic animal production has continued to grow, averaging 3.2% annually since the 1950s with aquaculture production of aquatic animals surpassing 100 million tonnes for the first time (valued at $371 billion at farm gate) in 2024. Capture fisheries reached about 92 million tonnes and have remained within the 86–94 million tonnes range since the late 1980s.

As fish farming practices intensify, the aquaculture industry is facing growing demand for fishmeal and fish oil, core aquafeed inputs especially for salmon and shrimp. Increasing vulnerability to supply shocks, particularly those linked to climate change and recurring El Niño events, is impacting fishmeal/fish oil supply and increasing feed costs in anticipation of future disruption.

Peru’s anchoveta fishery is an example of El Niño’s impact. It depends on the Humboldt Current, a cold, nutrient-rich upwelling system that is responsible for roughly 8% of the global marine catch and around 10% of the world’s total anchovy harvest. The 2023 and mid-2010 El Niño events drove shortfalls, and, according to the FAO in May, Peruvian quotas for the first 2026 and second 2025 seasons, total 3.5 million tonnes, 30% less year-on-year.

Super prime fishmeal FOB Peru reached $2,500 per tonne in May 2026, against around $1,400 a year earlier, while feed-grade fish oil reached $4,100 per tonne FOB Peru, a 64% year-on-year increase. That was before Peru’s Ministry of Production officially terminated the first 2026 North-Central anchovy season by closing the fishery on 19 August, leaving over 1.4 million metric tons of the quota completely uncaught.

Investable solutions to El Niño-exacerbated problems

Alternative feed sources

According to Rabobank rsearch, fishmeal shortages are projected to emerge as early as 2028, while fish oil scarcity is expected to intensify throughout the decade, and alternative feed sources will play a critical role. Enthos is a waste to feed business that uses Black Soldier Fly larvae to upcycle organic food waste into a high-quality fish meal and fish oil, addressing a critical need for sustainable protein sources for aquaculture as well as animal feed.

Tilabras, a farm in Brazil that produces thousands of metric tons of fresh tilapia a year benefiting from the outstanding water conditions of the Parana River, is insulated from the escalating costs of feed costs because its fishmeal-free formula is made of locally sourced grain. Tilabras’ natural way of tilapia farming described in this Investment Spotlight, both lowers the CO2 footprint but also provides more sustainable and healthier alternatives to normal fishmeal.

Advanced genetics

The Peruvian and Chilean aquaculture industries are not the only ones being impacted by El Niño. In Thailand, the aquaculture sector is on alert for reduced water quality and increased disease pressure in shrimp specifically, as well as feed/ingredient supply chains tied to the drought and heavy-rain cycles that become more pronounced.

One way to alleviate increased disease pressure exacerbated by El Niño is via enhanced genetics that improve growth and survival, driving greater farming efficiency, reducing waste and enabling increased environmental sustainability and profitability. By increasing yield per hectare per year, relative land requirements are reduced. By improving feed conversion ratio, consumption per unit of production of scarce resources, such as fishmeal, is reduced.

Characterised by advanced genetics, precise nutritional formulations, and complex global supply chains, global shrimp production has increased from less than 75,000 metric tons in 1980 to more than 6.1 million mt in 2025. The market size for the global shrimp industry is estimated to range between $65 billion and $80 billion in 2026.

A recent Investment Spotlight highlighted how SyAqua, a Singapore-based supplier of genetics and early-stage nutrition to the shrimp hatchery market, offers a proprietary ‘balance’ line that is an attractive blend of both good growth and disease resistance. This has the potential to have a significant impact on the sustainable intensification of shrimp farming, by improving disease resistance without overly compromising growth. The resultant high average crop yields enable reduced resource consumption per unit of production.

With a historical focus on Asia, SyAqua opened a new hatchery in Bangpakong, Chachoengsao in October 2024 that significantly boosts shrimp production in Thailand and extends its reach to customers across the eastern, central, and upper southern regions of the country.

Digital Transformation

Via patented IoT devices and fintech services, Aqua Exchange currently automates large areas of shrimp farming operations in India. While Aqua Exchange, profiled in this Investment Spotlight, does not currently operate in Thailand, its digital transformation technology could be applied to transform the Thai shrimp sector.

Once generating more 100 billion (approximately US$2.8 billion) in annual export revenue, disease-driven production costs have left Thai shrimp roughly $1 per pound more expensive than rivals from Ecuador and India. This is why the Thai Shrimp Association has called on the government to take urgent action. Having raised $8 million in series B funding, Aqua Exchange is currently validating its regional model in Indonesia.

In 2024, Thailand was the ninth largest exporting nation of fish and fishery products with exports worth $5.6 billion. Cage fish farming, of species such as Nile tilapia and climbing perch, has become a popular form of aquaculture in the Northern part of Thailand, contributing to improving livelihoods, food supply, employment, and income of the local population.

For this reason, in addition to Thailand’s shrinking shrimp industry, AquaManager, a comprehensive software solution supporting all stages of fish aquaculture production from hatchery to harvest, could potentially be an ideal productivity enhancing tool for the region. The company, explored in this Investment Spotlight, already has pilot collaborations are with SyAqua and Tilabras, although not with deployment in Thailand.

Harmful algal blooms

Another El Niño side effect are the harmful algal blooms (HABs), where a marine heatwave combined with nutrient loading can produce a deadly overload of algae. In 2016, such an event hit Chile, the world’s second biggest salmon exporter, killing 23 million of farmed salmon by March that year. The economic impact from lost production reached $800 million. For this reason, Sernapesca, Chile’s national fisheries authority, has been coordinating with the salmon industry since March 2026 over blooms of Heterosigma akashiwo that have affected 11 fish farms in the Reloncaví Sound area of the Los Lagos region.

Sofar Ocean, unlocks ocean data and for marine sensing and its extensible Spotter platform, a solar-powered uncrewed surface vehicle, delivers real-time surface and subsurface data to power climate research and solutions. Spotter Scout is the mobile version of the Spotter platform that can track harmful algal blooms.

Most data collection instruments are designed to follow currents to track phenomena like HABs, pollutant dispersion, or surface transport patterns, but they either must be recovered or are lost. Sofar’s Spotter Scout is deployed as a drifter to follow currents and collect data along the way, and when the mission is complete, it can be commanded to return to its launch point or any designated recovery location.

Recirculating Aquaculture Systems (RAS), such as those used by The Kingfish Company, are one of the more resilient production models against exactly the kind of stress El Niño is creating, with a controlled environment that is only minimally affected by climatic factors, including rainfall variation, flood, drought, global warming, cyclone, salinity fluctuation, ocean acidification, and sea level rise.

Closed, treated, recirculating systems mean the fish are not sitting in ambient seawater as they would in open net-pens that are more vulnerable to HABs, such as those happened in Chile’s Reloncaví Sound this year. Closed, bio secure water treatment removes most of the pathogen-introduction pathway that open systems are exposed to, allowing companies like Kingfish to operate without the use of antibiotics or vaccines. That said, RAS does not help to mitigate feed/fishmeal cost inflation or energy costs for the power needed to cool down tanks during a warming event.

What does El Niño mean for future blue economy investing?

Marine heatwaves and the deeper impact of El Niño create three blue economy investing challenges. The first is carbon sink degradation. Warmer surface water absorbs CO2 less efficiently, which is a relevant consideration for any ocean-based carbon-removal technology investments.

The second is relevant for blue bond and debt-for-nature investors, who will need to price in the risks of elevated marine heatwave frequency. The frequency of marine heatwaves has doubled since the 1980s, and this could increase by a factor of four to eight by the end of the 21st century under continued warming, according to IPCC’s Sixth Assessment Report. And the third challenge is for future-proofing shipping and coastal infrastructure that are likely to face secondary effects such as storm intensity, sea-level rise and coastal risk over the long term.

All the challenges the summer’s heatwaves and upcoming El Niño event not-withstanding, it is time to double down on blue economy investing. Much like revising for exams, a last-minute cram is unlikely to move the needle. As mentioned at the start of the article, aquaculture alone is potentially a trillion-dollar investment opportunity.

Based on the sector’s current trajectory, business-as-usual investments of $500 billion could increase growth of aquaculture at a rate of 1.9% to 159 million metric tons, excluding seaweeds, and generate eight to 14 million new jobs by 2050. But by upping the ante and investing $1.5 trillion in more ambitious measures could increase global aquaculture production to 255 million metric tons by 2050, almost 100 million metric tons higher than the “business-as-usual” case and create between 13 and 22 million jobs.

Beyond aquaculture, food security, sustainable fisheries and alternative proteins and feed ingredients, blue ports and maritime infrastructure, ocean data, and the restoration of marine ecosystems are all potential investment themes.

Ocean plastics should be a win-win in terms of recycling and re-using plastics, but financing is lacking. Between 2018 and 2023, $32 billion of private investment was mobilised per year but more than $1 trillion is needed annually to reduce plastic pollution by 90% by 2040. Moreover, the finance that is available is not going to the right places with more than 80% of private investments going to downstream solutions.

The opportunities do exist. Bureo, which turns fishing net pollution into recycled raw materials, highlights what can be achieved just by focusing on one tiny niche of the circular plastic economy. Aion, which helps company solve their plastic challenges, and Novelplast, which creates useable raw materials from industrial plastic waste, are among the circular plastic investments in Ocean 14 Capital Fund 1.

The funding gap for Europe alone is estimated at €60 billion to €70 billion specifically in turning blue-tech innovation into bankable, scalable projects, driven by a shortage of late-stage private equity to help startups scale. The European Commission BlueInvest Investor Report 2026: The Next Wave of Blue Growth, mapped 159 private funds active in the EU blue economy, with about €3 billion in dedicated blue funds and roughly €11 billion in private capital from investors with partial exposure.

Over the next few terms, we will be taking deep dives into themes such as: offshore wind and marine renewables, which ticks the decarbonisation strategy box, as the EU plans to install at least 300 GW of offshore wind capacity by 2050; ocean technology and data; and ports and maritime infrastructure. The latter alone is estimated to be valued at $65.4 billion in 2026 and is expected to reach $101.7 billion by 2033, exhibiting a compound annual growth rate of 7.2% over the period. The growth will be driven by the steady growth of global trade and containerisation, increasing demand for efficient cargo handling, and expansion of maritime logistics networks, with rising investments in modernising ports with automation, smart technologies, and digital systems.

This summer’s heatwaves and upcoming El Niño have reinforced the indisputable link between the ocean and the climate crisis, highlighting that dollars spent on blue economy solutions can be the same dollars spent on climate mitigation. It is always worth remembering the High Level Panel for a Sustainable Ocean Economy’s Ocean Panel research, which suggested that investing $1 in key ocean actions could yield at least $5 in global benefits between 2020 and 2050, essentially a 450% to 615% return.