In the first anchovy fishing season in Peru, the world’s major fishmeal producing country, more than 95 percent of the catch quota (3.32 million tonnes) has been taken. This Total Allowable Catch (TAC) was the highest since 2011. Almost all of this catch goes to fishmeal production. The market expects a positive second fishing season and the outlook for next year is also very positive.

Production

The first fishing season of anchovy and longnose anchovy in the north-central area of Peru ended officially on 10 August, with more than 95 percent of the quota fulfilled. In comparison to the first fishing season in 2017, this year saw an increase in both the quota and the landings.

The Marine Ingredient Organization (IFFO) held its 58th annual conference in Rome in October. The main message delivered was the stable status of the fishmeal and fish oil industry worldwide, particularly in Peru. So far the good fishing performance in Peru is attributable to governmental decisions. The industry is monitoring whether there will be another El Niño, but overall the market is stable and is expected to stay so in the near future.

Globally, fishmeal production during the first eight months of this year increased by 13 percent, compared with the same period of 2017, except a slight decrease in Denmark and Norway. The growth is greatly credited to Peru, where approximately 960 000 tonnes of fishmeal were produced for the first two thirds of this year, up by 32 percent compared to the same period in 2017. Some progress was also made in the United States of America as there was a good amount of trimmings from salmon and other fish for processing to fishmeal and there were good landings of menhaden, an important raw material for fishmeal and fish oil production.

Exports

Peruvian exports of fishmeal were around 565 000 tonnes during the first half of 2018, about 10 percent less than during the same period in 2017. China was the dominant market for Peruvian fishmeal, absorbing more than 85 percent of Peruvian exports.

Peru’s exports of fish oil decreased to 68 000 tonnes, following the trend of fishmeal, but the proportion destined for Denmark increased by 24 percent to 28 000 tonnes in the first six months of the year, compared with the same period last year.

Denmark, the second largest exporter of fish oil products in quantity terms, reported nearly unchanged exports, with a total amount stable at around 65 000 tonnes for the first half of the year.

Markets

At the end of September 2017, Chinese fishmeal stocks in the main ports reached a record high of 200 000 tonnes due to the low fishmeal price and sufficient shipments from Peru. However, the stock this year is much lower. High temperatures and heavy rains are likely to be the reason for this. In addition, the African swine fever occurrences in some parts of China added to the slowdown of the imports of fishmeal.

In the context of the trade war between China and the United States of America, an update of particular interest is that under the second amendment of the Asia Pacific Trade Agreement, China unveiled a plan to remove or reduce import tariffs on goods including soybeans from several Asian countries, namely India, Republic of Korea, Bangladesh, Laos and Sri Lanka. The cuts effective on 1 July indicated that China has been taking steps to reduce its dependence on US soybeans amid the mounting trade dispute between the two countries. Soybeans are China’s biggest agricultural import from the 

United States of America by value. Both soybean and fishmeal are important ingredients for feed and therefore the raised price of soybean in China could have repercussions on the fishmeal market, but to what extent the market is going to be affected is still unclear.

Price

The high quota set for the first fishing season followed by massive landings, gave the market a sense of relief and the market price for fishmeal and fish oil products started to decrease in February this year. The price normalized as the first fishing season ended. Current FOB Peruvian super prime fishmeal price is around USD 1 600 per tonne. The price is likely to stabilize at this level for a while, at least until the announcement of the quota for the second fishing season.

Outlook

The successful first fishing season in Peru confirmed its leading role in the global fishmeal industry, In the second half of the year, sea conditions are reported as optimal and good reproduction is reported, thus a quota for the second fishing season of 2.0–2.5 million tonnes is reasonable. The market is optimistic for the coming fishing season in Peru. Fishmeal and fish oil prices are stable now and are anticipated to remain at current levels in the near future provided the quota for the second fishing season is set at the expected level.