Conclusions of IffO Commercial Committee Meeting, Miami
Prepared by J.C. Bololanik, IffO Executive Advisor
Production
The fishmeal production outlook for 2003 is not encouraging. Production within the exporting countries is expected to total 2.6 mln T, i.e. 1 mln T down from the previous year, a 30% drop.
The fishing prospects are bad everywhere:
In Chile, the current fishing quotas (respectively 800 TT in the north and 2 mln T in the south) lead to a 220 TT decrease in production.
In Peru, where the authorities strictly enforce the letter of IMARPE’s recommendations, the anchovy stock is evaluated at a low 7.7 mln T. Consequently, the fishing quota will be reduced to about 6 mln T this year, with a resulting fishmeal production of 1.35 mln T, a 600 TT decrease versus the year 2002.
In Denmark, the sand-eel fishing is currently most disappointing and this year production might well show a 100 TT deficit.
The position in Norway is not more enviable, with a capelin quota reduced by half and total fishing expectations reduced by one third. This means an estimated drop in production of more than 50 TT.
At last, after a record year 2002, Iceland experienced a considerable decrease in capelin fishing (600 TT for the first quota 2003 as compared with 1 mln T in 2002). The industry is now awaiting the new fishing quota June 2003/March 2004. However, the fisheries authorities face difficulties in evaluating the stock, which apparently migrated much further north on account of high sea-water temperatures. Again, the production estimate is 100 TT down.
The Market
The market is rather healthy. It is a fact that the aqua-industry is not in good shape but it does not affect the demand simply because of the limited supply.
Peru is a good illustration of the current situation. The expected production there for the 2nd Quarter 2003 is 700 TT, roughly half each FAQ and Special meals. As a consequence, the availability of the FAQ fishmeal is currently reduced to 350 TT when China alone needs 600 TT to cover its needs including its high aqua-culture season (April/October). These figures tell the whole story.
Furthermore, the industry is working with very low physical stocks and no unsold inventory. In such context, fishmeal will flow into the market as soon as produced in order to meet the 2.5 mln T minimum demand.
Obviously, prices will remain very firm, all the more that they are supported by a weak dollar.
Fish Oil Market
The only matter of concern in terms of market is the fish oil situation.
The recent market fluctuations have no justification whatsoever, considering the overall supply/demand balance. Nevertheless, the industry demonstrated some vulnerability to a short term pressure, mainly for technical and logistical reasons. The lesson has been understood and the necessary corrections should be expected in a near future.
Meanwhile, the fish oil prices rebounded from lows of $ 365/tonne to the current $430/tonne, FOB Peru.
In conclusion, an improvement in fishing would be most welcome both by the industry and the trade
