Upsurge in fishmeal and fish oil prices

Christian Pérez Low catches (1% of the quota) in Peru in January, a fishing ban imposed on many Chilean fishing areas for most of this period, and the slow start of the season in Europe were the major causes of lower production, which caused prices of fishmeal and fish oil to rise, according to a recent report published by FAO Globefish. Production Fishmeal production from the top five supplying countries (Peru, Chile, Denmark, Norway and Iceland) was 17% lower in the first quarter compared with the same period in 2013. As usual, January was the last month for anchovy landing in North-Center Peru and for most of February and March there was no catch being reported from the South. According to IFFO, Peru alone produced 42.7% less fishmeal in the first quarter. The fishing ban on most Chilean fishing areas remained until early February, after which time the anchovy catch improved greatly. Accordingly, Chile produced 26.4% more than the same period of 2013. Iceland/North Atlantic produced less than half of the volume of 2013, due to the slow start and severe weather. For fish oil production, although Peru, Denmark/Norway and Iceland/North Atlantic produced significantly less in the first quarter (-41.2%, -39.6% and -61.3% respectively according to IFFO), Chile almost doubled its production - from 26,665 tonnes to 51,604 tonnes. In the first quarter, fish oil production from the top five countries dropped by 11.1% to 94,000 tonnes. Export Peruvian fishmeal exports for the first quarter were reported at 369,400 tonnes, which was 165% more than the volume reported during the first quarter of 2013. Exports to all major destinations increased considerably. This big increase was based on the extremely low export volume in the first quarter of 2013 as the result of low anchovy catch quota in 2012. China had the largest market share, accounting for 66.6% of Peruvian fishmeal exports. In Chile, the export volume fell slightly - from 63,800 to 62,000 tonnes. Although China still accounted for 44% of Chilean fishmeal export, their import volume dropped by 28% in the first quarter of 2014 compared with the same period last year. Japan also reduced its import of fishmeal from Chile (-64%) during the period. In the case of fish oil, Peru almost tripled its exports - from 21,700 in the first quarter of 2013 to 60,000 tonnes in the first quarter of this year. Exports to all the major destinations increased considerably and Chile regained its position as the top Peruvian fish oil export destination. By comparison, Chilean fish oil exports almost halved during the period. According to IFFO, Vietnam exported 4,200 tonnes of fish oil to China during the first quarter of 2014, accounting for a 67.2% market share and representing a 307.9% increase from last year. Outlook The demand for fishmeal and fish oil from aquaculture and the terrestrial farming industry will remain strong in the long-term. Demand in Vietnam will continue to strengthen, and it has become the fourth largest export destination for Peruvian fishmeal due to the fast aquaculture development in the country. Increased demand for direct human consumption will also continue to push up the price. As the investigation over anchovy stocks is still ongoing, there is no news yet about the quota for 2014, which will obviously affect production and prices. Although the fear of a strong El Niño effect in 2014 has subsided, the sector is still faced with significant uncertainty this year.