July 14, 2003

 

Fish Meal Prices in China Generally Stable During Week 28

 

An eFeedLink exclusive report

 

Prices in China's fish meal market for the week ending July 11 remained essentially stable. Currently, the quotation for imported fish meal at Shanghai (64% protein) remains close to RMB5,400/ton. The port transaction price is at around RMB5,330/ton, with the lowest deal concluded at RMB5,300/ton, while the lowest transaction price for FAQ fish meal (63% protein) is RMB5,200/ton. Imported fish meal (64% protein) at Huangpu port, Guangdong province is quoted in the range of RMB5,450-5,500/ton and transacted at RMB5,380-5,400/ton. The quotation for imported fish meal (64% protein) at Dalian and Tianjin ports in the north remains at RMB5,450/ton, while the actual transaction price differs little from last week's.

 

Fish meal prices at Chinese ports this week did not fall any further and essentially kept to last week's levels. This is mainly attributed to the fact that the significant fall in market demand, compared to the same period last year, was accompanied by a relatively lower stockpile of fish meal at Chinese ports and lower import volume lately, thereby keeping supply and demand in equilibrium.

 

According to industry insiders, there has been a rise in fish meal stocks leaving China's domestic ports, with daily departures closing in on the 2,000 tons mark. This implies a gradual shift in market demand towards more favorable pricing, and with the gradual stepping up of aqua feed production and resumption of livestock feed production, market demand is certainly poised to rise further. Fish meal stockpile in all the Chinese ports currently stands at 11,000 tons, of which about 35,000 tons are at Shanghai port and 30,000 tons at Huangpu port.

 

Market rumors this week of the possibility of a one-million increase in fishing quota by Peru's new Minister for Industry has till date not been confirmed. With the fishing season nearing its end, and the fact that raising the quota is no easy feat, a quota increase, according to many market insiders, is not likely. Furthermore, a quota increase does not guarantee fish haul.

 

At present, industry insiders hold diverging views with regard to the direction for China's fish meal prices in the near term. The first camp holds that a price hike is likely, given the depleting stockpiles in the domestic ports and feed enterprises and the huge plunge in import volumes due to the fishing ban, which will precipitate a strong increase in demand.

 

On the other hand, the second camp foresees that falling demand by the feed mills who were in the market due to the current high fish meal prices, followed by the subsequent arrivals of big quantity of fish meal at the ports, will cause fish meal prices to fall further.

 

Traders said that market pricing is determined by supply and demand conditions. When demand exceeds supply, there will still be takers even if it is for RMB7,000/ton. When supply exceeds demand, no buyer will pay even if price is at RMB3,500/ton. Thus, the direction of fish meal prices in the near term will depend on the balance between supply and demand then. Based on the present overall market conditions, supply and demand are relatively even; the market is likely to remain stable for the time being.

 

Market prices for China's imported fish meal

                 Date: Week ending July 11                                                                        Unit: RMB/ton

Destination

Country of origin

Protein

Last week's price

This week's price

Rise/fall

Dalian port

Peru

64%

5380

5380

-

Tianjin port

Peru

64%

5380

5380

-

Shanghai port

Peru

64%

5330

5330

-

Huangpu port

Peru

64%

5380

5380

-

 

Remarks: Prices refer to port transaction prices

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