Following three successive years of low Peruvian anchovy harvests, the supply of fishmeal and fish oil has improved considerably in 2017 – largely due to the absence of El Nino, while high prices have also softened, according to a new report published by Rabobank.
The report, “To fishmeal…or beyond?” compiled by Gorjan Nikolik and Beyhan de Jong, states that global fishmeal production has declined by more than 2 million metric tons (MT) in the last two decades, hitting the lowest level last year with an estimated volume of 4.2 million MT. This decline is mainly linked to a contraction in fish landings as well as a rise in the direct human consumption of small pelagic species. However, the study highlights that the better utilization of trimmings had mitigated part of the contraction in fishmeal supply.
From 2012 to 2016, the utilization of fish residues in fishmeal production increased by 2 percent, while the use of whole fish decreased by 8 percent. By 2024, 25 percent of the increase in fishmeal supply will derive from the increased utlilization of fish residues, forecasts Rabobank.
While the Dutch multinational banking company does not expect the declining trend in fishmeal production to continue beyond 2017, due to the current and predicted good fishing seasons in Peru, in the longer run it does not expect further growth in pelagic fish landings due to quota restrictions.
Peru is the key in the stabilization of global fishmeal production, states the report. Four of the country’s last six biannual fishing seasons were impacted by El Nino, whereby the quota was either reduced in order to ensure a sustainable harvest or the catch was reduced when the biomass conditions changed during the fishing season. Indeed, in 2014, the second Peruvian fishing season was cancelled – the first ever cancellation in the fishery’s history.
Currently, though, the fishmeal supply is improving due to there being no El Nino and an improving wild biomass. The total allowable catch (TAC) for the first anchovy fishing season of 2017 was set at 2.8 million MT, which is 56 percent higher than the first season TAC in 2016.
Although impossible to predict, the expectation is that an El Nino will not affect near-term fishing in Peru, said the report.
Rabobank estimates that the total fishmeal supply can reach 5.4 million MT thanks to increased contributions from the wild catch and fish trimmings. In addition, it believes that the expansion of alternative protein projects will yield around 500,000 MT of product by 2022.
With regard to prices, it said that the recovery of the fishmeal supply in Peru and Europe had already stabilized prices and its expectations for the near term lie in the USD 1,200 (EUR 1,093) to USD 1,700 (EUR 1,548) per MT range.
In the long-term, the growth and intensification of aquaculture, the rise of new farmed species and protein demand from human consumption and pet food markets could cause the demand for fishmeal to increase.
However, the developments in alternative feed proteins, technological in feed formula and possible production cost decreases could erode fishmeal prices, said Rabobank. Moreover, with the ever-present risk of El Nino, it is difficult to speculate what the long-term price dynamic will be in this ever-changing market.
Aquaculture currently consumes 70 percent of the total fishmeal production and 73 percent of the fish oil production
