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Fishmeal Market Report - June 2008
Fishmeal prices up, but might decline soon
Fishmeal prices up, but might decline soon
Total fishmeal production of the main fishmeal exporters for the first four
months of 2008 reached 940 000 tonnes, 3% ahead of the corresponding 2007
production. Fishmeal prices that had been rather stable in the course of 2007, soared in the course of 2008. In May 2008, they
reached US$ 1 210/tonne, some 11% ahead of the price level at the end of
2007, but 6% below the price level one year ago. This price hike is not a
surprise in a climate of overall increasing vegetable meal prices. Various
factors will have an impact on further price developments: the overall
commodity price increases will create an environment of higher prices, on the other hand, demand from the aquaculture
industry is declining, as fishmeal is often replaced by other meals in the
feed mixture. The impact of the Chinese earthquake on demand for fishmeal has
yet to be assessed. The area hit by this disaster is the core of the Chinese
pig industry, thus demand for fishmeal is likely to decline in the short
term.
Fishmeal
production up
April 2008 was an extremely good month for fishmeal production. With more
than 2.2 million tonnes of landings, April 2008 was the best fishing month
for the main fishmeal exporting countries since May of last year and was
twice as large as the previous month (1.0 million tonnes). About 60% of the
monthly landings were located in Peru where
the first session opened by the government on April 21 in the North/Centre
region led to about 1.27 million tonnes landings in the ten days after the
opening. Scandinavian countries, on the other hand, reported lower outputs in
April 2008.
Peruvian fishmeal exports were 554 000 tonnes in the first four months of
2008, 23% ahead of the same period of 2007. Main markets were China, Germany, Japan and Australia. 79% of
the fishmeal was traditional fishmeal, while the remainder consisted of prime
fishmeal products.
The International Fishmeal and Fish Oil Organisation (IFFO), which represents
the fishmeal and fish oil industry worldwide, is
developing a new Code of Responsible Practice (CORP). The Code will enable
fishmeal and fish oil producers to show that they are offering traceable,
high quality marine products which are manufactured safely using fish from
responsibly managed fisheries. Subject to final approval of the Code by the
IFFO Board at its annual conference in October this year, producers should be
able to enter the audit process early in 2009. The first certifications would
then be announced later next year.
Fishmeal prices have firmed up in the course of 2008 after some declines in
the second half of 2007. Nevertheless the present price level of US$ 1
210/tonne is about US$ 100/tonne lower than last year’s
price. The relative weakness of fishmeal prices in 2007, especially when
compared to the booming soymeal prices, was due to
little buying interest in China. However,
this changed in early 2008.
Fishmeal production in Peru was 1.42
million tonnes in 2007, slightly down from the 1.45 million tonnes produced
in 2006, which compares to 1.9 million tonnes in 2005. Reduced production led
to lower exports in quantity terms; however, high fishmeal prices kept total
earnings from fishmeal stable at US$ 1.2 billion.
Chilean fishmeal production is declining every year, due to lower horse
mackerel landings. In 2007, the production was about 10% lower than in 2006.
As a result Chilean exports of fishmeal totaled 490
000 tonnes, down from 520 000 tonnes in 2006 and 710 000 tonnes in 2005. As
in the case of Peru,
however, exports earnings were positive. Total export earnings reached US$
539 million, 5% ahead of 2006. Therefore, the unit value of Chilean fishmeal
exports increased strongly to US$ 1 100, up 11% from 2006 and 63% from 2005.
Imports of fishmeal into the USA and Europe declined in the course of 2007,
as traders were unwilling to pay the extremely high prices. It is interesting
to note that the USA
is now relying on Mexico
for fishmeal supply, while Peru and Canada are
losing ground. Some 85% of German fishmeal imports are coming from Peru, while
European suppliers are decreasing their share. UK imports
also declined in 2007 by 50% over 2006, reporting lower shipments from all
main supplying countries.
Further fishmeal price increases unlikely
There are three different issues to be taken into account when forecasting
fishmeal price developments for the coming months. On the one hand, fishmeal
production seems to be strong, especially in South America, which should lead to
lower prices. On the other hand, alternative protein sources are still
showing soaring prices, which should also influence positively fishmeal
prices. The present price level of soymeal is US$
500/tonne which is almost double the price level of one year ago. There are
some indications, however, that also the price hike for soymeal
is coming to an end, and prices started to decline somewhat in May 2008. The
impact of the dramatic earthquake in China on pig
production and thus feed prices is still to be seen, but demand is likely to
be strong. Taking all these indications together, it is likely that fishmeal
prices will come down slightly in coming months, to a level of US$ 1
100/tonne.
By Helga Josupeit
© FAO GLOBEFISH 2008
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