Due to high juvenile presence, Peru’s Ministry of Production announced the end of the second anchovy fishing season in the centre-north region on 15 January 2020. This early closure is a preventive measure to maintain the sustainability of the species and environment.

The second anchovy fishing season of 2019 in the centre-north region of Peru began in November 2019, with a total allowable catch set at 2.79 million tonnes, up 38 percent from the second session of 2018. However, in the second half of December 2019, abnormal weather conditions caused a high presence of juvenile fish along the coast and fishing activities were subsequently suspended in January 2020.

Production

The first anchovy fishing season in Peru concluded in July 2019, with zero catching activities occurring in the centre-north region until November 2019. For the first nine months of 2019, 2.43 million tonnes of anchovy were landed, a 41.5 percent decrease compared to landings during the same period of 2018. Consequently, the shrinkage of raw materials corresponded to an identical drop of fishmeal yield in Peru, registering only 564 122 tonnes in January-September 2019 when compared to the same period in 2018. Other reduction fisheries experienced similar declines during the review period, although not as significant as in Peru.

In Chile, fishmeal production levelled off, while decreased landings from the Nordic countries is contributing to a global shrinkage of fishmeal production. The plunge in fish oil production did not come as a surprise. For the first nine months of 2019, Chile was the leading supplier of fish oil, with more than 100 000 tonnes recorded. Following in second place, Peru produced 98 295 tonnes from January-September 2019, in contrast to 171 359 tonnes in the same period of 2018.

Exports

Peruvian fishmeal exports registered a healthy gain in the first half of 2019, up 12 percent (627 000 tonnes) when compared to the same period in 2018. However, this positive trend did not continue in the third quarter of 2019, as the final figure for the first nine months of 2019 (859 000 tonnes) recorded a 9.75 percent decrease from the same period in 2018. The decline in exports can be largely attributed to the outbreak of African Swine Fever (ASF), which has slowed down the pace of China’s imports in the third quarter of 2019. Peru’s exports of fish oil for the first nine months of 2019 were down 12 percent. Elsewhere, Denmark’s exports of fish oil remained steady, with 76 percent of exports destined to the Norwegian market.

Markets

In China, approximately 54 percent or 645 000 tonnes of fishmeal imports were sourced from Peru in the review period, a slight decrease (-1 percent) compared with the same period in 2018. Currently, the stocks at Chinese ports have been rapidly absorbed by the market partly due to the bleak performance of Peru’s second fishing season. On the other hand, a traditional peak in pork consumption is expected with the onset of the 2020 Spring Festival. In order to boost supply, the Chinese government has implemented a set of favourable industry policies, including farm subsidies and preferential tax treatment. Moreover, the rebound of the pig farming industry is also likely to absorb more fishmeal. 

Norway’s imports of fishmeal decreased by 13 percent, while fish oil imports increased by almost 20 percent. By the end of September 2019, the standing biomass of salmon, which requires high inputs of fish oil for their feed, was on track for 6.7 percent growth year-on-year, albeit due to higher average weights. 

Prices

Fishmeal prices have hovered at around USD 1 500 per tonne since June 2018 with occasional oscillations. However, from June 2019 onwards, fishmeal prices have shown an obvious downward trend. The price decline was attributed to several factors such as the positive prospect for the second fishing season, high stocks in China, and a weaker Chinese yuan. However, the descending trend of fishmeal prices did not last long, as prices picked up momentum in November 2019. The poor performance of the second Peruvian fishing season translated into a global supply shortage of fishmeal and fish oil. Prices are trending upward, due to a shortage of supply and increasing demand from China.

Outlook

At 2.9 million metric tons, the fishing quota announced for Peru's second anchovy season of 2019, is one of the largest ever. However, due to the high presence of juveniles, preventive early closure of the season is having a repercussion on global fishmeal and fish oil price. It is expected that prices will go up in the coming months, at least until the Peruvian government announces the quota for the first fishing season in early 2020. The outbreak of 2019 Novel Coronavirus (2019-nCoV) in China is having a great impact on the animal farming sector. Firstly, the Chinese government has prolonged the holiday and most workers are staying home. Secondly, the virus was thought to have originated from a seafood market, although not scientifically examined, and people started to fear purchasing animal products, including fish. In addition, many cities have now suspended all public transportation and outdoor activities, hindering the distribution of fish and fishery products. It is still unknown to what extent the 2019-nCoV outbreak will affect the animal feed sector, however weaker demand is foreseen in the short-term.