Outlook for fishmeal and oil through the balance of 2008
The picture for fishmeal and fish oil is not great this year in terms of prices, reports the GROWfish web site, which continues: "A series of factors, different from its use in aquaculture, can explain the volatility in this market. According to the general manager of Exapesca, Victor Mitrano, in order to explain the behavior of the two markets last year (fish meal and oil), and thus forecast what could happen in 2008, one must analyze the causes of price variations and product availability in different markets. For Mitrano, China's consumption of 1.3 million tons annually make this country the most important consumer and thus the engine for this market. On the other hand, Peru produces more than 1.6 million tons annually and it's the main supplier worldwide. Whatever happens in each of these two countries will determine this market's global behavior. Last year, prices in Chile maintained a downward tendency and are now also below the levels achieved in late 2006 with a slight gain during the last quarter of 2007. Moreover, prices of fishmeal in Europe experienced a downward trend throughout 2007, though it wasn't as bad as in Peru with prices averaging US$1,277/t and finishing at US$1,088/t. Mitrano believes that fishmeal prices in 2008 must show a sign of recovery. The quota in Peru is already known and equal to last year. In Chile, although quotas are slightly higher than in 2007, the mackerels fishery is potentially a problem. Prices for fish oil have skyrocketed since May 2007 due to structural causes, and it is very probable to sustain these levels during all of 2008. As with protein meals, between 2006 and all 2007, vegetable oil has shown a constant increase on pricing. The most important cause, though not the only one is the increase in demand for vegetable oil as biofuel, and as long as oil prices continue their upward trend, prices for vegetable products will follow the same tendency. If industrialized countries are to eliminate their subsidies on vegetable products that are aimed towards the production of biofuels, demand for these products will start to decline and prices could drop; however, nothing like this is on sight in the short term. In addition, fish oil is also used for human consumption. According to many market studies such consumption has shown at least a 20% increase annually. Now, fish oil is a rival for aquaculture productive practices and adds another variable to the volatility of price. Estimates reveal that consumption of fish oil worldwide will be similar to that of last year, with slight variations on its use but with similar production levels. The lead taken by vegetable oil, and the competition of producers of Omega 3, are the pillars of this industry. Unfortunately, the price for vegetable oil has a direct correlation with the value of oil, and as such, there is no relief on sight in the short term. On the other hand, the use of marine products in the Omega 3 market is growing, and possibly to this source of demand could become major competition to traditional users. Aquaculture currently consumes 76% of the world's production of fish oil, decreasing 7 points when compared to last year due to the increase of direct human consumption".
