October 13, 2003

 

 

China Fishmeal Market Weekly Report - Fishmeal Prices in China Remain Stable (Week Ended October 12, 2003)

 

An eFeedLink Exclusive Report

 

1. Market Overview

 

China's fishmeal prices for the week ended October 12 exhibited only modest fluctuations. Quotations in certain regions of China inched up marginally, but overall transacted prices did not change much from the period just before the National Day holidays.

 

At Shanghai port, FAQ imported fishmeal (64% protein) was quoted between RMB5250-5300/ton and transacted at about RMB5200/ton. FAQ fishmeal of over 65% protein was quoted between RMB5300-5350/ton and transacted at about RMB5250/ton. SD66% fishmeal was quoted at around RMB5350/ton. At Huangpu port, FAQ fishmeal of over 64% protein was quoted between RMB5300-5350/ton and transacted at about RMB5250/ton. Fishmeal of over 65% protein was quoted between RMB5350-5400/ton and transacted at around RMB5300/ton. Similarly, at Dalian port, 64% protein fishmeal was quoted at around RMB5350/ton and transacted at close to RMB5300/ton. At Tianjin port, 64% protein fishmeal was quoted between RMB5250-5300/ton and transacted at between RMB5200-5250/ton.  

 

2. Market Supply and Demand

 

Supply:

 

There was no new shipment of imported fishmeal at Chinese ports this week. All 8000 tons of imported fishmeal on Shuang Jiang ship had been unloaded during China's National Day holidays. At present, overall port inventories stood at 140,000 tons. 

 

Demand:

 

Production of livestock and poultry feed is still at its peak and there is no sign of a slide in the demand for fishmeal. Of late, there was little market activity, possibly due to the fact of some deals completed before the week-long China's National Day holidays.

 

The sharp rise in soymeal prices this week has a two-sided sword effect on China's fishmeal market. On the one hand, the soaring soymeal prices induced a rising demand for fishmeal. On the other hand, it prompted feed millers to speed up their procurement of soymeal, which in turn had a negative effect on the demand for fishmeal.

 

3. Overseas Markets

 

Peru's official newspapers affirmed that for two weeks, from October 15, 0000 hours to   October 31, 2400 hours, Peru will be conducting a thorough fishing exploration- which is tantamount to an announcement that the fishing ban will be lifted from October 15 onwards.

 

China has recently bought another 40,000 to 50,000 tons of fishmeal futures at a reported transacted price of US$520-525/ton.

 

4. Outlook for the Near Term


Currently,
favourable factors on China's fishmeal prices are analysed as follows:  

    • Demand for the month October is not likely to fall significantly for the time being; 
    • The sharp rises in soymeal and lysine prices are expected to give a strong impetus for China's fishmeal prices in the near term; 
    • Fishmeal inventories at Chinese ports have been falling day by day. There would be very little volume of fishmeal arriving at Chinese ports before the arrival of Peruvian fishmeal, which is produced in the new season; 
    • The alliance of the six major importers in issuing quotations continues to exert a certain effect on domestic fishmeal prices; 
    • While China's domestic fish haul has started to fall, prices have also begun to rise correspondingly. It is reported that prices of 62% protein fishmeal have now hit RMB4800/ton.   

Factors working against China's fishmeal prices are as follows:  

    • Firstly, Peru will begin trial fishing on October 15; and the quota for the new fishing season is estimated at around 3 million tons; 
    • Secondly, the Peruvian market has begun selling fishmeal in advance. China has recently procured 40,000-50,000 tons of Peruvian fishmeal at US$520-525/ton, which is translated to around RMB5000/ton. This would possibly exert certain pressures on China's fishmeal prices to drop for the near future;  
    • Thirdly, with the weather turning increasingly cold, demand for aqua feed is likely to fall, especially in the northern regions of China.       

According to market analysts, the output by Peruvian fishmeal market is not likely to affect China's fishmeal prices in the short term. Given that the demand for and supply of fishmeal in China market are now in a relative balance, China's fishmeal prices for the nearby term are seen would undergo correction within a band at the ongoing price level.

 

 

Fishmeal prices at China's Major Ports

Date: Ended 10 Oct                                                                                          Unit: RMB/ton

Destination

Origin

Protein

Previous week's price

This week's price

Rise/fall

Dalian port

Peru

64%

5300

5300

-

Tianjin port

Peru

64%

5250

5250

-

Shanghai port

Peru

64%

5200

5200

-

Huangpu port

Peru

64%

5250

5250

-

 

Remark: Prices refer to port transaction prices