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GLOBEFISH-专注世界渔业贸易分析与信息

Fishmeal and fish oil - July 2015

01/07/2015

With the irreversible trend of increasing demand for fishmeal and fish oil, pressure on supply pushed up prices for both commodities during 2014. While production in the USA, Europe, Africa and Asia remained neutral or even positive, global fishmeal production only grew by 13.2% as there was significantly lower production from Peru, the largest fishmeal producer.

In Peru, the second anchovy fishing season of 2014 was cancelled, which will likely impact Peruvian fishmeal processors’ earnings negatively in 2015. However, there is evidence that the anchovy biomass will recover before the first season in 2015, and as a result the market forecast for 2015 is optimistic.

Fish oil is still mainly consumed by trout and salmon farms, however direct human consumption is catching up drastically. Scientific research on alternatives to fishmeal and fish oil in the feed industry has made steps forward though scalability remains a challenge.

Production

In anticipation of a potential El Niño effect on anchovy catch in early 2014, Peru opened the first fishing season one month earlier in April, and extended it until 10 August. Nevertheless, only 1.8 million tonnes out of 2.53 million tonnes of the TAC were caught during the first season. The El Niño effect, although quite moderate, drove anchovy to cooler and deeper seawater or south closer to the shore, where industrial fishing is not permitted. To worsen the situation, the second fishing quota was cancelled based on a negative finding by IMARPE on anchovy biomass. Fortunately, catch from the second season in 2013 could be used throughout 2014, with Peruvian fishmeal production coming in at a total of 525 000 tonnes according to IFFO.

For 2015 in Peru, it is expected that anchovy catches will increase by 30%, with the Ministry of Fisheries estimating landings to amount to at least 2.9 million tonnes. However, oceanographers are saying that another El Niño could hit again soon, and are advising the fleet to be active during the up-coming season.

In Chile, a recent resource survey revealed that the anchovy and sardine biomass has been reduced by 33% since last year. For sardines, the biomass was estimated at 1.9 million tonnes, while for anchovy, the estimate was only 120 000 tonnes (Source: FIS.com).

Globally, total production is 1 672 000 tonnes, with Peru/Chile accounting for 54% of this total.

Fish oil faced more or less the same situation. The aggregated fish oil production of Peru and Chile amounted to 255 000 tonnes in 2014, or 40% more than 2013, though this volume is still lower than annual yields between 2009 and 2011.

Exports

Peru exported slightly less fishmeal in 2014 than compared with the previous year, but its destinations have become more diverse. Although China remained the largest consuming country, its share dropped from the previous year’s 63.2% to 52.8%. Viet Nam noticeably more than doubled its intake of fishmeal from Peru. Fishmeal exports from Chile increased slightly in 2014 compared with 2013, at 257 700 tonnes. In general however, these export volumes from both major producing countries do not reflect the recent supply constraint of raw material in late 2014.

Fish oil exports faired well in Peru, Chile and the USA. In Chile, total fish oil exports reached 86 700 tonnes, the highest volume since 2009. The USA exported 77 800 tonnes in 2014, more than in any year since 2009. The significant demand of fish oil for aquaculture as well as for human direct consumption is driving these export volume growths.

Markets

China has been the largest client of Peruvian and Chilean fishmeal exports for many years. However, China reduced its share from 75% in 2013 to less than 60% in 2014. This decrease can be explained by the fact that China built up their stock in early 2014 to 253 000 tonnes, and with the unclear situation on anchovy catch in the first fishing season, ceased to import further volumes.

All of the traditional fishmeal markets, such as Germany, the UK and the USA managed to import more in 2014. The USA sourced more than half of its fishmeal from Chile, which is significantly more than compared with six years ago when Chile supplied less than 17%. Germany imported 22.6% of its fishmeal from Africa, whereas six years ago African fishmeal represented less than 2% of its total fishmeal imports.

Prices

Up until June 2014, prices for fishmeal in international markets did not respond significantly to the anticipated supply shortage implied by the low anchovy catch in Peru. This quiet was broken shortly after the first anchovy fishing season in Peru was over in August. Indeed in October 2014, the FOB price for super prime fishmeal in Peru was recorded at USD 2 400 per tonne. High market prices were then further confirmed by the cancellation of the second fishing season. Prices of fish oil followed the same trend.

In anticipation that the anchovy biomass will recover before the first fishing season can start in May, the markets seem to have consensus that the fishmeal and fish oil supply will return to normal levels for the year. As a result, starting in December 2014, prices for both commodities have gradually dropped.

Outlook

According to the latest reporting on both climate and anchovy biomass, 2015 will not be another poor year for anchovy catch. However, without any raw materials due to the closed second fishing season in 2014, Peruvian fishmeal producers’ earnings will definitely be impacted negatively in 2015.

The 2014 Atlantic Menhaden Stock Assessment confirmed that Atlantic menhaden is not overfished, which may indicate a positive menhaden quota expectation. According to IFFO, domestic fishmeal production in China dropped by 25% due to a recent consolidation, which led to the withholding of licenses for small firms. In general, one can expect a slightly better supply situation taking into consideration output from Africa and Europe.

Efforts to find alternative ingredients for fish feed never cease. Seaweed, mushrooms, beef tallow, cottonseed flour and wheat gluten are now alternatives on the top of the list. If soymeal prices did not demonstrate significant competitiveness in 2013 and early 2014, with the price ratio between fishmeal and soymeal staying at 2.8:1 to 3.6:1, the said ratio recorded at 4.2:1 in March 2015 should be much more convincing.  Diversification and alternatives are the only solutions to the ever-growing demand for fishmeal and fish oil for the agriculture sector and direct human consumption.

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