The quota of the second fishing season in Peru was set at 2.78 million tonnes and catch activities have been progressing quite well. Global supply is sufficient and demand, so far, has been stable. Prices are expected to moderate due to the ample supply.

Production

Peru formalized the quota of the second anchovy fishing season starting from 2 November 2020 at 2.78 million tonnes in the north-central zone. Combined with the 2.41 million tonnes quota for the first season, the total allocated quota of 2020 reached over 5 million tonnes, up some 6 percent compared with 2019. The season will conclude upon the scientific advice from IMARPE (Instituto del Mar del Perú).

As of writing time (5 January 2021), Peru had reported a total catch of around 2.1 million tonnes for the second season, fulfilling more than 75 percent of the quota.

Although COVID-19 has created considerable uncertainty for many industries and impeded the transport of products from fishmeal plants in 2020, the sector itself was fortunate to be among those less affected, mainly as a result of Peru’s good performance. According to preliminary estimates, the annual production quantity of fishmeal in Peru increased from 0.8 million tonnes in 2019 to 1.07 million tonnes in 2020, up by 33 percent. Cumulative fish oil output saw a year-on-year increase of 37 percent.

Good landings of sprat, Norway pout, and sand eel in Denmark, together with a high quota fulfillment in Norway gave an additional rise to the global fishmeal supply. Combined fishmeal and fish oil production from Denmark and Norway reached 284 000 tonnes (+13 percent) and 81 000 tonnes (+11 percent) respectively in 2020. The performance of Chile was quite positive as well, fishmeal production reached 330 000 tonnes in 2020, slightly lower than 2019, but fish oil production saw an increase of 5 percent at 141 556 tonnes.

Exports

Peru remained the main exporter of fishmeal, by a far margin over other countries. For the first three quarters of 2020, Peru exported 764 618 tonnes of fishmeal, a decrease of 11 percent compared to 2019. However, this output was still considered an achievement under the pandemic. Nearly 80 percent of the Peruvian exports were destined for China, followed by Japan with a 5 percent market share. Chilean exports increased from 150 000 tonnes in 2019 to 238 000 tonnes in 2020 for the review period, demonstrating growth of 58.7 percent.

Denmark has been leading fish oil exports with 108 950 tonnes, with most of its products shipped within Europe to countries with marine fish farming, namely Norway (salmon), Greece, Italy and Turkey (seabass and seabream). Peruvian exports of fish oil reached 103 582 tonnes in the first nine months of 2020, 33 percent lower than the same period of 2019, the shrinkage is mainly attributed to the reduced demand from traditional markets.

Markets

For the first nine months of 2020, approximately 43 percent of Chinese fishmeal imports totalling 469 327 tonnes were from Peru. This 27 percent decline in exports from Peru was mainly a result of the pandemic since international trade was largely affected in the first half of 2020.
Norway’s imports of fishmeal decreased slightly in the review period while imports of fish oil remained strong at around 154 000 tonnes.

Prices

Starting from early 2020, prices have been gaining upward momentum. Although the pandemic has been impeding the economic performance of many countries, recovering demand in China and other economies keep absorbing the products. Since the start of the first fishing season in Peru, the bump harvest started to soften the hiking trend of prices, which has been further confirmed with the good progress of the second fishing season in Peru.

Fishmeal and fish oil prices in China have been generally stable so far, however, there are sporadic COVID-19 cases related to imported fisheries and aquaculture products, which may have repercussions on prices.

Outlook

Peru’s second fishing season is still ongoing and it is predicted that sufficient raw materials will be translated into ample supply at least until mid-2021.

International fish trade in the context of COVID-19 has continued for almost a year, enabling most players on the market to better understand how to avoid documentation issues from different customs and how to conduct safety checks. Accordingly, the trade of fishmeal and fish oil is expected to globally normalize. China was the only economy with positive growth in 2020, and with the upcoming festival season, many analysts predict an even further rebound of the Chinese economy.

In the short term, prices are expected to drop due to the plentiful supply from Peru. However, the extent of this decline depends on the evolving pandemic as well as demand from China and other main market players. Prospects of the upcoming aquaculture season and recovered terrestrial farming sectors will play a big role in future trends.