April 25, 2014

 

Peru's fishmeal sellers hold off on orders on firm market ahead

 

 

Peru's fishmeal sellers are holding off on booking too many orders for now in anticipation of a firm market ahead as the year's first anchovy season in Peru kicks off to an early start.

 

A potential high level of small anchovy in the catch could see Peru's first fishing season hit by several 'mini-bans' on fishing, three large Peruvian producers said.

 

This, combined with uncertainty over this year's El Nino effect and over demand in China, coupled with relatively low inventories in Peru and a moderate fishing quota, mean prices are expected to remain firm if not go up in the coming months, said the exporters.

 

Prices out of Peru recently settled at around US$1,600-US$1,620 per tonne for super prime fishmeal, a big jump from US$1,450-US$1,460 last December.

 

One producer said they had sent vessels out as soon as the season opened at midnight on Wednesday (Apr 23), but had not caught anything yet.

 

Research from Peru's marine institute Imarpe has suggested that the stock will have high levels of juvenile fish, said this supplier.

 

An exporter said he expects prices to be in the range of US$1,600-US$1,700 for this year's season, freight on board (FOB) Peru, super prime meal.

 

Prices in Shanghai are now said to be around RMB10,000 (US$1,618) per tonne, compared to RMB9,600 (US$1,500) last December. Prices in China are up by RMB100-500 (US$16-80) depending on the port and the grade, said one exporter.

 

Peru is said to have pre-sold some 90,000 to 100,000 tonnes of fishmeal from the coming season -- representing catches of around 420,000 tonnes. The total allowable catch (TAC) for the year's first season was set at 2.5 million tonnes.

 

Although there is room to book more, the sellers said they are not in a hurry to seal orders right now, and buyers are also waiting to have a better overview of demand in China.

 

The demand in China, the biggest fishmeal market, will be a key factor. Last year, a poor aquaculture season sent Chinese demand plummeting and prices dropping -- albeit from very high levels - in the second half of the year.

 

According to the Peruvian producers, demand in China is looking firm at the moment, but weather conditions are still uncertain. China is reporting to have some 253,000 tonnes in inventories, he added.

 

The fishing situation in Peru will become clearer in the next few days, while the situation in China will become clearer by May-June.