Peru's poor anchovy catch tightens global fishmeal squeeze
13.12.2016 13:15:43
Peru's poor anchovy catch tightens global fishmeal squeeze
August 10, 2016, 3:06 pm
Matt Craze
A shorter first season for Peruvian anchovy fishermen in the key center-north has left fishmeal inventories perilously low, driving up prices.
Prices have surged to as much as $1,900 per metric ton for fishmeal since the center-north fishing season ended, up from around $1,500/t two months ago when fishing began, according to two executives who work for fishing companies in the South American country.
One executive said prices have reached $1,900/t. Another said prices shot up from $1,600/t when the season ended to $1,800/t while negotiations are now taking price at a level of $1,850/t FOB.
With a weak biomass reading of 4.4 million metric tons in a first survey of Peru's territorial waters in the southeast Pacific, the government delayed the fishing season by a month, blaming El Nino weather pattern that raises ocean temperatures and drives anchovy towards the coast.
A second reading in June showed a better situation and the government designated a better-than-expected 1.8m-metric-ton fishing quota, leading to a drop in prices.
The price of fishmeal shot up again when it was announced that fishing companies had only fished 50% of the quota, as the government ended the season at the beginning of August to make way for the traditional spawning season.
"Taking into considering that situation, prices started to rise," one executive said. "We expect this situation to normalize later this year."
The catch of 920,000t was the lowest in 10 years, after the shortest recorded season in that time period.
Prices had been approaching $2,000/t as the market awaited the results of the second survey in late June, when Rabobank predicted prices would drop. They started to fall when Peru gave a biomass measurement of 7.3m metric tons, a big improvement on the first reading.
Rabobank analyst Gorjan Nikolik had predicted fishmeal would start to rebound if the total allowable catch was not caught. The first season of the center-north area usually runs from May to July.
Peru's production minister Bruno Giuffra said Aug. 9 that the government would reassess how it defines the 10-mile nautical limit between industrial and artisanal fishing fleets after the El Nino effects on ocean temperatures drove most of the anchovy further towards the coast.
The big hope of the Peruvian fishing industry is a return to normal ocean temperatures later this year.
Signs of improvement are already beginning to show, with measurements already showing colder waters and the return of new phases of Kelvin waves that indicates the end to El Nino, fishing company Exalmar said in a second quarter report on July 26.
Peru's second fishing season in the center-north runs from November to January.
"Judging by history, the second season will be better," one executive said. "Historically the quota has been between 2m and 2.5m [metric] tons."
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