With the spring bounce in demand for fishmeal on the horizon, aquaculture companies in Japan are looking at all their options for obtaining reasonably priced feed, which is becoming increasingly difficult to find.
Peru’s anchovy fishing season, which opened in November, has been predicted to be a good one – with the biomass estimated at 6.86 million metric tons (MT), according to the country’s fishery science center, IMPARPE. Accordingly, Peru set a 2 million MT quota, 81 percent above that of the El Niño-affected 2015 season – leading to optimism among buyers that prices might continue to trend downwards. Japanese importers, hoping this might be the case, delayed contracting, but some may have been caught short.
Forward contracting is not conducted while the season is underway, since the catch is unpredictable. During this pause, the situation has altered. A large percentage of the early catch was found to consist of juveniles, leading to the closure of eight fishing areas. Additionally, anchovy are congregating further offshore than usual, leading to less efficiency in harvesting them. As a result, it is unlikely that the whole quota will be utilized. Estimates are that about 1.5 million MT will be landed, and that prices will firm, rather than weaken, when contracting resumes.
Since peaking for the year in June at USD 1,577 (JPY 180,220, EUR 1,470), Peruvian fishmeal prices steadily declined to 1,398 (JPY 159,745, EUR 1,303) in September. Delivered prices in Japan in early November were around JPY 190,000 per MT (USD 1,650, EUR 1,562), about 20 percent below those of a year ago.
The recent depreciation of the yen will also make fishmeal more expensive for Japanese importers. Donald Trump’s victory in the U.S. presidential election has produced a post-election bump for the U.S. dollar, from an early November rate of JPY 103 per dollar, to 114 at present.
Feed demand for farmed fish typically strengthens from spring. There is a possibility of increasing imports to Japan from other regions, such as Southeast Asia and Africa, for this high-demand period. In 2015, in response to shortages in Peru, Japanese importers turned to Thailand, importing the largest quantity in 15 years, four-fold that of a decade before.
Algae-based substitutes may also gain greater interest, though costs have so far been uncompetitive for feed use. While small projects already successfully feed ingredients, much larger projects are about to come on-line, which could lead to greater efficiencies.
In addition, more seafood processing trimmings are being converted to fishmeal, and other meat trimmings, such as those from poultry processing, are being used as well, though some retailers, such as Whole Foods, based in Austin, Texas, discriminate against this practice.
According to Japan’s Fisheries Agency, feed accounts for over 60 percent of the production cost of farmed fish. Though reduced fishmeal may work for some fish species, it is important in Japan in the fattening of eels and yellowtail. In particular, yellowtail accounts for half of fishmeal-based feed use. When feed prices rise significantly, there is a Japanese national subsidy system as a safety net for farmers.
