July 28, 2003



Lower Fishmeal Prices In China Market, Unexpected Development In Peru Market


An eFeedLink Exclusive Report


Market prices of fishmeal at Chinese ports continued to decline marginally for the week ending Jul 27. Market participants said that recent arrivals of large shipments of fishmeal had raised warehouse inventory levels. However, ex-warehouse volume had not improved. They said that this was the main reason for the continued slide in prices this week.


As at Jul 24, fishmeal stocks at Chinese ports totaled 131,000 tons. The inventory at the major ports is as follows: Shanghai (55,000 tons), Huangpu (26,000 tons), Dalian (13,000 tons) and Tianjin (12,000 tons).


Meanwhile, daily ex-warehouse volume was still hovering around the below 2,000 ton mark; in Shanghai and Huangpu ports, the figures were around 500 tons and 750 tons respectively.


As we approach the end of the month, the market has yet to see the strong growth in ex-warehouse volume in end-July that was previously forecasted by some market participants. We offer the following reasons why ex-warehouse volume has not increased:


1.       Demand from the animal production industry is still weak.


2.       With the current declining trend in prices, a cautious mood has prevailed among feed producers, resulting in lower interest in procurement.


3.       Adverse weather conditions such as the high temperatures in Shanghai and the flooding of the areas along the Huai River had also affected movement of goods.


During the week, an unexpected development was reported in the Peru fishmeal market.


Citing pressure from the built-up in warehouse inventories (currently estimated at around 80,000 to 100,000 tons), and low trading volume, a Peruvian fishmeal producer reportedly sold around 5,000 tons to a Chinese buyer at US$550/ton. Compared to the previous transacted price of US$570-575/ton, it is a significant decline of US$20-25/ton.


Before this transaction, many market participants had strongly believed that fishmeal prices will remain firm throughout the duration of the winter fishing ban which began on Jul 21. Now, they consider price fluctuations a possibility when this 5,000-ton transaction arrives in China.


From empirical evidence, demand for fishmeal from the animal production and the aquaculture industry will definitely be higher in Aug compared to the month of Jul. However, there will also be a corresponding increase in the arrival of fishmeal shipments at Chinese ports (industry estimates at around 120,000 tons).


As supply is expected to continue to outstrip demand, it is likely that market prices will continue to drift lower.


Offers And Transacted Prices For Imported Fishmeal At Chinese Ports





Week 29

Jul 14-Jul 20

Week 30

Jul 21¡§CJul 27




64 %



- 20



64 %



- 20



64 %



- 50



64 %



- 30

                    Note: Prices Indicated Are For Transactions At Chinese Ports

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