Lower fishmeal production
In the first ten months of 2007, some 2.0 million tonnes were produced, 5% less than in the same period of 2006. This was mainly due to lower production in Chile and the Scandinavian countries.
Chinese market turned around
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China continues to be the main market for fishmeal from Latin America. Demand from this country during the first ten months of 2007 was relatively low, due to swine fever and natural disasters that affected aquaculture harvests. In the third quarter of the year, Chinese traders were only buying what they needed to refill their stock and some of the shipments were just against old contracts. As a result of this bleak demand, fishmeal prices tended downward. This was outstanding in an international market of feed commodities which was growing in demand and price levels, in view of the huge investments in bio fuel. All main competitors of fishmeal reported increases in price levels. In mid November 2007, the Chinese suddenly showed buying interest, and the whole market turned around completely, with prices soaring.
The new Peruvian fishmeal catching season started on 17 November, again with two instalments of 1 million tonnes each, to be taken in November and December, the same quota as last year. However, when catches in the north showed a predominance of immature specimen, the fishing season in that area was closed at the end of November. In the remaining areas, however, fishing was very good during November with 1.2 million tonnes taken, which would have left for the December catch season only 800 000 tonnes. In mid December 2007, however, the Peruvian government allowed an additional quota of 300 000 tonnes. This increase was in view of the fact that the anchovies taken in most areas were big in size, indicating a good situation of the overall resource.
In the first ten months of 2007, total Peruvian anchovy catches for fishmeal production reached 3.84 million tonnes, slightly (+0.5%) ahead of the corresponding period of last year. This small increase was due to higher catches in May and June. The fishmeal production was practically stable at 880 000 tonnes during the first ten months of the year. Fishmeal exports during the same period declined by 9.5% to 1.09 million tonnes. In value terms, however, Peruvian fishmeal experienced a positive export year in 2007. In the first ten months of the year foreign exchange earnings from fishmeal were US$ 1.06 billion, 7% more than in the same period of 2006. This was caused by relatively strong fishmeal prices early in 2007.
Fishmeal usage in the feed production in Europe and USA declined sharply, in view of high prices and lower production. In the first nine months, US fishmeal imports declined sharply by 33%. This was mainly due to the disappearance of Peru as a supplying country to the US market. During the same period the unit value of fishmeal imports increased from US$ 680/tonne to US$ 840/tonne. As a result, the value of total US fishmeal imports stayed high at US$ 27 million in the first nine months of 2007.
Chilean fishmeal exports went down in 2007, in line with the decline in fishmeal production in the country. Exports were 390 000 tonnes in the first nine months of the year, some 50 000 tonnes less than in the same period of last year. Main declines were experienced by exports to the Japanese and Taiwanese (Province of China) markets, while China Mainland maintained its imports and its top position with 140 000 tonnes. In value terms, however, Chilean fishmeal imports reached US$ 444 million, a 5% increase over the January-September 2006 period.
Fishmeal usage in the feed production in Europe and USA declined sharply, in view of high prices and lower production. In the first nine months, US fishmeal imports declined sharply by 33%. This was mainly due to the disappearance of Peru as a supplying country to the US market. During the same period the unit value of fishmeal imports increased from US$ 680/tonne to US$ 840/tonne. As a result, the value of total US fishmeal imports stayed high at US$ 27 million in the first nine months of 2007.
European fishmeal imports declined further in 2007, as traders are unwilling to compete with Asian purchasers at these very high prices. Germany is still the main importer of fishmeal in the EU, but in the first nine months of 2007, imports declined by 15%. UK imports dropped even more, by 45 percentage points. Peru was the main responsible for this decline in the UK fishmeal market.
Higher fishmeal prices likely
Fishmeal prices declined in the course of the year, due to the sluggish demand in China. In early November 2007, fishmeal prices were US$ 900/tonne, which compared to US$ 980/tonne one year ago. In addition to the bleak market situation in China, the salmon disease problem in Chile and seasonal downturn of aquaculture activities created a stale market environment for fishmeal. However, with the sudden buying interest of China, prices went up within days to over US$ 1 000/tonne. Further price increases are likely to materialize over the coming months, in view of supply problems. La Niña – a cold Ocean current - is expected to hit the Peruvian anchovy fisheries in the coming months, which should lead to lower catches than anticipated.
December 2007
