Fishmeal and oil prices could rise on poor fishing, possible El Nino

A report saying stocks are plagued by lower biomass and high levels of juveniles have already sent prices up, the Peruvian fishing group Copeina said in its quarterly report.

Prices started climbing in April and are now at around $1,520 (€1,166) per metric ton for super prime fishmeal FOB Peru, up from an average of $1,262 (€968.1) in the first quarter of 2012, Copeinca said.

Fish oil prices similarly rose, with aquaculture grade oil trading at around $1,550 (€1,189) FOB Peru, and omega-3 oil, which contains more than 30 percent of the EPA and DHA fatty acids, at around $2,200 (€1,688).

All eyes are now set on the development of the year’s first anchovy fishing season in central and northern Peru, Copeinca CEO Pablo Trapunsky said.

“The whole market wants to confirm if the catching is indeed difficult and if we would be able to catch the quota,” Trapunsky, who took over as CEO in June last year, told IntraFish.

The season in question started on May 2 and is due to last till July 31. However, supply would be low even if Peruvian vessels caught their entire quota, as the quota set has been cut by 23 percent from 3.5 million to 2.7 million metric tons. The potential threat of a Kelvin Wave and an El Nino could further hamper catches.

The Kelvin Wave, which meteorologists say may hit Peruvian coasts in June, could affect the season that has just started, as it lasts until the end of July. A return of El Nino, which the Australian meteorologists think could occur in the second half of the year, would affect the year’s second anchovy season “and maybe the first season next year,” Trapunsky said.

Another sign of tight supply comes from the “extremely low landings” in the south of Peru, where anchovy fishing started on Feb. 17.

Catches there have so far only reached 82,934 metric tons -- far below the total quota of 400,000 metric tons, Copeinca said.

Trapunsky would not venture a price forecast for the year. However, he said, prices could increase if the Kelvin wave is strong enough to warm up the sea during long periods and develop into an El Nino later on. “We don’t forecast prices ever, but if we face El Nino, prices will indeed go up more,” he said. A high presence of juveniles would also affect prices by hampering catches, he said.

A slow start

Fishmeal suppliers had a sluggish start this year, with high volumes and stocks depressing prices and slowing down trading.

“Prior to the announcement of the first fishing season quota [April 6], the market remained without trades and main producers are still out of the market even after the announcement due to uncertainties related to the biomass status,” Copeinca said in its quarterly report.

Super Prime fishmeal prices (FOB Peru) averaged $1,262 (€968.1) per metric ton from January to the end of March, 26 percent less than in the same period last year.

While prices have since recovered -- to $1,520 (€1,166) for Super Prime and $1,420 (€1,089) for standard fishmeal in week 16 -- they are still far lower than the $1,700 (€1,304) average traded in the first quarter of 2011.

Similarly, aquaculture-grade fish oil traded at an average of $1,349 (€1,035) FOB Peru in the first three months of 2012, down 32 percent, or $328 (€251.6), from the same time last year.

Omega-3 quality oil was also down from last year, trading at an average of $1,971 (€1,512), down 16 percent from the same time last year.

The low prices were mainly due to abnormally high volumes for the second fishing season of 2011, for which the quota was set to 2.5 million metric tons.

“After the announcement of the second season last year [Nov. 3], prices were down due to concerns of surplus in stocks remaining at ports for longer than usual periods,” Trapunsky (pictured) said.

Trading therefore started late this year. According to Copeinca, China started trading during the JCI conference in Hainan, China, around March 22. At the time, prices were at around $1,300 (€997.2).

What sparked a change was Peru’s marine institute Imarpe's report on the status of the stock, in which it said the biomass was low and that juvenile levels were high.

Following the report, “speculation made the price to go up to $1,300 (€997.2) - $1,350 (€1,036),” Trapunsky said.

Stocks in China, the largest market for Peruvian fishmeal, are “slightly above average” at around 200,000 metric tons, Copeinca said in its report on May 9.

Peru pre-season sales are estimated between 150,000 metric tons to 200,000 metric tons at prices between $1,200 (€920.5) and $1,300 (€997.2), it said.