GLOBEFISH - Information and Analysis on World Fish Trade

The sector remains confident

16/07/2021

The Marine Institue of Peru (IMARPE) concluded its evaluation of the anchovy biomass along the coast in April, with the Peruvian Ministry soon to announce the quota for the first anchovy fishing season. Thus far, there is no negative news concerning the upcoming fishing season and the sector is confident. Overall, 2020 has been a positive time period for the fishmeal and fish oil industry, as the annual production quantity of fishmeal in Peru reached 1.07 million tonnes in 2020, up by 33 percent compared to 2019. Meanwhile cumulative fish oil output saw a year-on-year increase of 37 percent.

Production

In anticipation of the first anchovy season of 2021 in the north-central area of Peru, ongoing fishing activities are occuring in the south of the country with the quota of 409 000 tonnes. Until mid - April, over 30 percent of the quota was reported to be landed. So far, the overall condition of the anchovy biomass along the coast is quite promising, both in terms of climate and biomass situation and the upcoming season will likely have a positive quota. COVID-19 cases in Peru reached a record high in April, yet implications for the industry still have to be explored. Summary of 2020 It was believed that COVID-19 would have upended the global fisheries and aquaculture industry in 2020, and the production of fishmeal and fish oil was no exception. However, the fishmeal sector itself was fortunate to be less-impacted by COVID-19, mainly as a result of Peru’s positive performance. The first fishing season in the north-center area in 2020 was set at a quota of 2.41 million tonnes which were almost fulfilled completely; while the second season was even more positive with a quota at 2.78 million tonnes which resulted in total landings of 2.45 million tonnes (88 percent). Apart from the lead producer, other market players, like Chile, the United States of America and European Union, performed well in 2020, and jointly contributed to the successful season of the fishmeal and fish oil sector. With total landings of anchovy amounting to over 4.45 million tonnes in 2020, Peru’s output of fishmeal reached 1.04 million tonnes, up by 30 percent compared to 2019. Nordic countries also reported good progress in fishmeal production, for example, the combined quantity from Denmark and Norway totalled 355 476 tonnes, equivalent to an increase of 12.8 percent compared to 2019. Meanwhile, Chile’s production slightly shrunk to 329 025 tonnes (-7 percent). The yield of fish oil has observed the same progressive pattern, with the leading producers all reporting positive growth.

Exports

The tonnage exported from Peru in 2020 (855 887 tonnes) dropped by 20 percent compared to 2019, which was mainly a result of the poor second fishing season in 2019. Nearly 77 percent of the Peruvian exports were destined to China, followed by Japan with a 5 percent market share. Exports from Chile increased from 193 000 tonnes in 2019 to 297 000 tonnes in 2020, demonstrating a growth rate of 53.88 percent. Denmark has been leading fish oil exports accounting for 151 187 tonnes in 2020 compared to 146 090 tonnes in 2019, with most of its products shipped within Europe, to countries with marine fish farming, namely Norway, the Faroe Islands and United Kingdom of Great Britain and Northern

Ireland (salmon), Greece, Italy and Turkey (seabass and seabream). Peruvian exports of fish oil reached 12 779 in 2020, 30 percent lower than 2019. Markets China, the largest consumption market for fishmeal, seems to have recovered from the pandemic, and the government has set a GDP growth rate of over 6 percent. Meanwhile the International Monetary Fund (IMF) is slightly more positive, predicting a GDP growth in China at 8.2 percent in 2021. Given the recovered demand in China due to growing pig farming and aquaculture, its domestic supply is insufficient to fill the gap. Thus, fishmeal imports will still be a necessity in the short term. More specifically, in 2020, Chinese fishmeal imports totalled 1.43 million tonnes, of which over 45 percent was sourced from Peru, a far margin over other producing countries. Upturned imports are seen in some European countries as well. Norway’s imports saw minor decreases in 2020, but due to the higher demand of processed fish products, the export value for salmon in 2020 ranked among the second-highest, and in terms of volume it was a record. It is likely that feed demand will remain high, particularly for fishmeal and fish oil which are indispensable in salmon feed for the time being. Prices Since the start of the first fishing season in Peru in 2020, the bumper 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. Until early 2021, the prices of fishmeal and fish oil have been stable with minor oscillations. Fishmeal and oil prices in China have been generally stable as well.

Outlook

The cumulative production quantity of fishmeal and fish oil in 2020 exceeded industry expecations, and the first fishing season of 2021 in Peru will likely have a quota of around 2.5 million tonnes. The upcoming aquaculture season in China and the recovered hog farming sector will allow for a further absorption of fishmeal and fish oil globally. A trend observed in 2020 was China diversifying its sources of imports of fishmeal worldwide. With the normalization of fishmeal reduction in Peru, it is expected that its market share will increase in China. Prices have been stable, and to a great extent this trend will probably continue.

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