Reduced quotas and catches in Peru and Chile, combined with the increasing likelihood of another El Niño late in the year are driving fishmeal and fish oil prices higher this year, according to a Globefish report.
Processed catch volumes fell from 7.4 million metric tons in the first six months of 2011 to 5.1 million metric tons in the same period in 2012.
In Peru, total catches by July were 2.99 million metric tons compared with 4.74 million metric tons tons last year, a decline of 37 percent.
Most of the catches take place in the Northern and Central zones, with 2.5 million metric tons of the 2.7 million metric tons quota landed through July. The new quota for August-December is 307,000 metric tons.
In Chile, catches, mostly anchovies, in the Northern zone by July were at 489,000 metric tons, down from 935,000 metric tons last year. Southern zone catches reached 979,000 metric tons, down from 1.1 million metric tons last year.
Increased interest from Chinese buyers lifted Peruvian shipments during the first three months of the year. China's purchases of fishmeal from South America in the first quarter of 2012 were up by 102 percent, compared with the same quarter in 2011.
Germany, the principal fishmeal import market in Europe, showed strong growth during the first quarter, with shipments from Peru in particular up by 150 percent.
Most buyers were keen to secure supplies in a period of increasing uncertainty of supplies for the period of 2012 to 2013, leading to price rises.
Falling fishmeal and fishoil production
First quarter fishmeal production was up on 2011 by 21 percent. Production jumped in Iceland from 49,000 to 115,000 metric tons due to higher landings.
However, as the season progressed, volumes fell. As a result, meal production volumes fell to 1.1 million metric tons in the first six months of 2012, down from 1.1 million metric tons during the same period last year.
Despite some increased output during the first quarter, International Fishmeal and Fish Oil Organisation (IFFO) members reported a 25 percent decline in fish oil production in the first half of the year, from 700,000 metric tons in 2011 to 528,000 metric tons in 2012.
Quotations on alternative meal sources such as soybean and rapeseed have also risen to unprecedented levels.