In recent weeks, fishmeal prices in China have experienced a significant decline, drawing the attention of industry experts and market participants.
According to industry sources, the price of Superprime fishmeal at Shanghai port fell to 14,950 yuan per tonne (approximately US$2,086 per tonne) during week 33 (August 12-18). This marks a drop of 200 yuan from the previous week and 1,400 yuan since mid-June, during the first anchovy season in Peru, indicating a persistent downward trend.
Factors Behind the Price Decline
Several factors contribute to the recent drop in fishmeal prices in China. Firstly, there is a subdued sentiment among market players. As noted by James Frank, Managing Director of the Peruvian company MSICeres, the market is experiencing an oversupply, with numerous offers from industrial companies. This surplus has exerted downward pressure on prices.
Secondly, market expectations regarding the upcoming second anchovy fishing season in Peru are influencing buyer behavior. Many buyers are delaying their purchases, awaiting clearer insights into production volumes and product quality.
Production and Export Trends
As of August 4, MSICeres reported that total fishmeal production in Peru’s north-central and southern regions reached approximately 582,080 tonnes. This high level of production is expected to continue rising as the new season approaches.
From January to June 2024, Peruvian fishmeal exports increased by 22.6% year-on-year, reaching 510,192 tonnes. China remains the largest buyer, accounting for nearly 91% of these exports, underscoring the critical importance of the Chinese market for Peruvian fishmeal producers.
Future Outlook
The Peruvian government has suggested a minimum quota of 1.7 million tonnes for the upcoming north-central fishing season, with industry hopes set on a potential allocation of up to 2 million tonnes. The spring assessment cruise by IMARPE (Peruvian Institute of Marine Research) is scheduled to begin in early September. The results of this cruise will likely play a crucial role in determining the season’s start date, set for late October.
Should the cruise confirm high anchovy volumes, it could lead to an increased supply in the market, potentially driving fishmeal prices down further. Conversely, if the findings are less favorable, prices may rise due to constrained supply.
The fishmeal markets in China and Peru remain dynamic, and stakeholders should closely monitor ongoing developments. While lower fishmeal prices may present buying opportunities, they also bring risks tied to the uncertainty of the upcoming anchovy season. Staying informed and adapting to market fluctuations will be key to maintaining a competitive edge in this rapidly evolving industry.
