October 8, 2004

 

 

Peru Fishmeal Exports Driven By Record Catch, China Demand

 

Demand from China for fishmeal for cattle feed and fish farms has allowed Peru to boost exports of the silver-speckled anchovy and its by-products by more than 18 percent so far this year. Peru, the world's largest producer of fishmeal - made from an anchovy that grows to about 16 centimeters (6 inches) - exported $761 million through August.

 

Fishmeal exports are "helping total exports grow and that's good news for the economy,'' said Carola Sandy, Latin America economist at Credit Suisse First Boston in New York.

 

A surge in Peru's anchovy catch to its highest level since 2002 may help the country report its 15th consecutive trade surplus.

 

The increase in exports will likely contribute to a $150 million trade surplus in August. In July the country reported a surplus of $328 million.

 

Since June, fishmeal has replaced metals as Peru's fastest growing export, and total fishing exports are now about equal to the nation's exports of copper. Fishmeal exports more than doubled in August from the same month last year to $88.7 million compared with a 39 percent rise in mining exports.

 

The growth helped lift Peru's trade surplus to $1.3 billion in the first seven months of the year from $731.07 million in the same period last year, strengthening the currency to a five-year high against the dollar yesterday and helping Peru maintain its 38-month expansion. The central bank forecasts the economy will grow 4 percent this year.

 

El Nino

 

The fishing industry is tracking a warming trend in the Pacific Ocean known as the El Nino phenomenon, which cost the fishing industry $1 billion in lost exports in 1998 as warmer waters drove schools away from Peru's 200-mile limit fishing grounds, said Richard Inurritegui, president of the fishing association. Now the ocean along the coast is cooling.

 

"The fish came back to the waters in droves and we are now able to net more with fewer boats in fewer days,'' said Mate Baraka, chief executive of Pesquera Hayduk, Peru's biggest fish producer.

 

Peru, with 40 percent of the world's fishmeal production, will probably boost total exports 28 percent this year to $11.5 billion, generating a $2 billion trade surplus, the central bank said. Peru has annual fish produce exports of over $1 billion, according to the central bank.

 

The country expects to produce about 6.8 million tons of fish products this year compared with 5.9 million tons in 2003, the National Fishing Association said.

 

China, Japan

 

China buys about 35 percent of Peru's fishmeal, followed by Japan, 22 percent and Turkey, 10 percent. Chile buys about 39 percent of Peru's fish oil, which netted $90 million in exports through July, up 38 percent.

 

As the industry improves, supplier credit is cheaper and more available to fishmeal exporters, said Gonzalo Loayza, general manager at Pesquera Austral, Peru's third biggest fishmeal exporter. The company expects to ship as much as $60 million of fishmeal this year to Japan, Europe and Canada.

 

Fishing specialists such as Humberto Speziani, an adviser to Lima-based fishmeal exporter Tecnologico de Alimentos SA, say the industry has learned its lesson and is shutting unprofitable plants and beaching boats, as Peru's 120 fishmeal plants are running at 50 percent of capacity.

 

"The tendency in the fishing industry is to consolidate,'' said Speziani. "This will make the industry more efficient and cut costs by managing scale economies.''