The report analyses the market situation until January 2017. 

Globally, there was an overall decline of fishmeal production in 2016. For Peru, the most significant fishmeal producer, 2016 was a wild ride, with a number of up and downs for the anchovy industry. Now El Niño is coming to an end, and with no forseeable factors putting the upcoming fishing season at risk, the market is anticipating a rebound. However, with demand ever growing, it would not be surprising to see demand topping supply, leading to a price rise in the short term.

By the end of January 2017, the second fishing season in the central-north region in Peru had ended with 98 percent of the quota fulfilled, which means that 30 percent of this quota were taken in just one month. This is a very encouraging sign and surprised many in the industry as most market players did not expect the quota to be even close to met. At the same time, the Peruvian Government initiated the season for the southern area with a TAC of 515 000 tonnes, an increase of 35 percent compared with last year.

With El Niño now over and an expected strong reproduction of anchovy stocks, some in the industry are expecting landings of anchovies between 2–2.5 million tonnes in 2017 for the first season. Consequently, the first fishing season in 2017 is expected to be positive and strengthen South America’s position as the leading fishmeal and fish oil producer.  

The global shrimp aquaculture sector as well as the Norwegian farming salmon sector is expected to expand in 2017, leading to further demand for fish feed. With this strengthening demand, it is likely that prices for fishmeal and fish oil will continue to rise in 2017 so long as the TAC for the first fishing season in Peru usually set in April is not surprisingly high. In the long-term, it remains to be seen whether prices will level off or trend down if anchovy stock levels become more normalized in post El Niño.