July 24, 2014

 

 

Demand for fishmeal and oil has been dampened by the uncertainty of Peru's anchovy fishing season, according to industry players.

 

Super prime fishmeal prices from Peru (FOB) are in the US$1,930/tonne range as just two-thirds of the season's anchovy quota has been caught, with less than ten days to go until fishing ends.

 

Some producers feel prices could reach the US$2,000/tonne mark once the season ends and buyers realise that the quota will not be met.

 

On the other hand, prices could go down as normalised sea temperatures are revealing signs of a better second season (November – January) ahead. On July 21, Peru's El Nino institute, Enfen, said that the El Nino phenomenon affecting catches should ebb away in August, with little risk of coming back by the end of 2014.

 

With no hopes of catching the full quota by July 31, there is talk that the season could be extended by a week or more.

 

By July 21, just 66.2% or 1.63 million tonnes of the total allowable catch of 2.53 million had been caught, said one leading fishmeal producer.

 

The producer estimated that companies would be able to catch 1.8 million to 1.9 million tons of the TAC by the end of the month.

 

However, he is skeptical that authorities will extend the season, citing the high levels of juvenile anchovies in catches. "I think they will not extend the season to protect the spawning of the anchovy," he told Undercurrent News. "Last Thursday we had a ban for five days and the landings during the weekend were poor."

 

He said prices were in the US$1,930/tonne range (FOB, Peru) for super prime meal (minimum 68% protein). That's a jump from levels of just around US$1,600- US$1,620 at the start of the season in late April, and up from levels of $1,880/tonne in June.

 

Prices from the World Bank, tracking CIF prices for fishmeal and pellets out of Peru with 65% protein, shows a large spike in June to just over US$2,000 (CIF Peru) from $1,820 in May. The season's uncertainty has dampened demand, and is keeping prices from climbing further, said exporters.

 

"The demand is very quiet, waiting for news," said one Peruvian exporter. "Prices remain at US$1,930 while no transactions at higher levels are registered. Some producers are trying to build up the price to US$2,000 but the reality is that the buyers are not responding."

 

However, he added that prices will reach up to US$2,000 when the season is over. Demand is expected to come at that point of time.

 

Another unnamed source from a key producer believes that prices could return to the levels of late 2013 if authorities confirm that El Nino has passed by the end of August.