Fishmeal market figures

Low small landings in South America

Landings of small pelagic fish for fishmeal production were very low in the first quarter of 2007, as previously forecast. Landings reached 2.7 million tonnes, some 20% below the previous year and around 14% below the five-year average. Landings were extremely limited in Peru, and also disappointing in Chile and in the Scandinavian countries. As a result of limited landings, fishmeal production declined by 21% during the first quarter of 2007 to only 505,000 tonnes. Demand for fishmeal was limited in March 2007, but prices stayed stable at over US$ 1000/tonne.

High prices continue

The volume of Peruvian fishmeal exports fell slightly in March 2007 when compared to the same month last year. Nevertheless, revenues grew 46.4% given the increase in pricing in the international market. Furthermore, total revenues for the first quarter were up to US$ 377.7 million, a 25.2% increase from last year. The main destinations for fishmeal from Peru include China with 52%, Germany 19% and Japan with 6%. Demand for fishmeal was reported low in the early months, as China had some inventories, but prices stayed surprisingly stable.

Aquaculture industry looks for alternatives

The world’s farmed fish industry no longer relies entirely on fishmeal to feed its most valuable products such as salmon and trout. This is mainly a reaction to prices that surged from the US$ 700/tonne to US$ 1,400/tonne in the course of 2006. These high prices for fishmeal are likely to continue, making alternatives such as soy protein concentrate and wheat gluten affordable alternatives.

In addition, higher prices for fishmeal will stimulate innovative approaches to recovering protein from seafood processing by-products, much of which is currently discarded. Decades of research have shown that proteins derived from grains such as corn, wheat and barley can provide the protein-rich ingredients needed in feeds for farmed salmon and trout.

Growing ethanol production, particularly the use of corn to make the alcohol-based fuel, could be a boon to some types of fish farming. Dried distiller grains contain the 28 to 30% protein that fish such as tilapia and catfish require. Trout and salmon need 40% protein in their diets and that, too, can be eventually met by ethanol producers.

Will La Niña bring more fish?

In the meantime, some scientists forecast a La Niña to develop within the next few months which may lead to a reduction in the price of fishmeal. La Niña phenomenon brings colder water temperatures off Peru and enhances upwelling. This in turn is likely to lead to an improvement in anchovy fisheries, and some easing of the shortage of fishmeal.

Already there is talk that by autumn, fishmeal prices will come down, as there are some reports that China still has inventories and that there has been a rapid move away from use of fishmeal in animal feeds in China. So indicators would be for a reduction in fishmeal prices, but this decline, if at all, will be of a rather temporary nature.

More Chinese investments in Peru

In May 2007, China Fishery Group, a subsidiary of Pacific Andes Corp., purchased Pesquera Pocoma SAC, a Peruvian company that owns three purse seiners and associated fishing permits for anchovy. The acquisition will increase China Fishery’s Peruvian fleet capacity by about 10%, to a total of 26 vessels with fish hold capacity of 7,363 cubic metres. China Fishery Group has been aggressively building up its fishmeal catching and processing capacity, and is becoming a main player on the world fishmeal market.