‘Partners in the Value Chain’ was the central theme of IFFO’s Annual Conference held recently in Buenos Aires and attended by nearly 300 delegates representing the global fishmeal and fish oil industry as well as related industries from 26 countries.

A series of workshops explored the practical aspects of partnership within the food chain along which IFFO members operate. Guest speakers included Alfonso Velásquez - the Minister of Production in Peru, as well as Bjorn Lomborg – the well-known author of ‘The Skeptical Environmentalist’.

The producers and their value chain partners, – including brokers and traders, shippers, feed manufacturers, farmers, laboratories etc., - together reviewed current market issues. The producers concluded that “in the longer term we remain in a scarcity-driven market in supply/demand terms” due to ever growing controls on a limited primary resource. At the same time there was market concern about trade restraints, especially in Europe, and IFFO will continue to press strongly to lift such unfair barriers to trade.

THE MARKETPLACE

 Landings

Total IFFO-5 landings (i.e. from Peru, Chile, Norway, Iceland and Denmark) are expected to reach 15.3 million tonnes, about 25% over 2003. As regards fishing activity, 2004 is reasonably good compared with a poor 2003 but still remains below the 1999/2003 average of 15.5 million tonnes. This takes into account the Peruvian government’s fishing objective of 2.0 to 2.5 million tonnes until the next biological fishing ban usually set some time in the 1^st quarter 2005. There is no reason to believe that landings will exceed this limit. Total fishing by Peru will therefore not exceed 8 million tonnes in 2004.

Exports

In spite of a very complex trading situation, particularly due to extremely unfavourable freight conditions, exports will reach 2.7 million tonnes in 2004, up 10% over the low year 2003. However, the market has shown rather contrasting situations. Exports to Asia have been particularly buoyant with the three largest markets (as usual China, Japan and Taiwan) taking about 1.3 million tonnes, or 48% of the total. IFFO-5 exports to China will reach a new high of over 800,000 tonnes. On the other hand, the European market place remains affected by the ban imposed by the EU authorities on the use of fishmeal in ruminant and other feed.  This trade barrier remains a strongly negative market factor with exports to the European Union barely expected to reach 600,000 tonnes compared with about 950,000 tonnes in 2000, with all markets being affected.

Production - meal and oil

2004 fishmeal production of the IFFO-5 producers will reach 3.4 million tonnes. If we take into account exports of 2.7 million tonnes and an ever-increasing home consumption of 840,000 tonnes, of which Chile, Norway and Denmark share the large majority, we expect physical stocks at the end of the year of around 670,000 tonnes, - more or less in line with average levels.

IFFO-5 fish oil production in 2004 is estimated at 640,000 tonnes, - up 20% over 2003. Once again, production is being fully absorbed by demand whether on spot position or on longer term contracts.

An early 2005 forecast by the producers shows total IFFO-5 fishing expected to reach only 13.9 million tonnes which is about 9% below 2004 and about 10% below the average for 1999/2003. For Peru, the 2005 forecast is for 7 million tonnes.

A further issue considered at Buenos Aires was the reassurance needed by consumers and food chains that feed fisheries (ie industrial fisheries) are managed responsibly. Delegates recognised that, in general, Governments have a good track record of managing such fisheries to ensure long term sustainability and indeed this has been endorsed by the Food & Agriculture Organisation of the United Nations. However, some speakers emphasised the urgent need to communicate this message more clearly to downstream partners including consumers. IFFO restated its firm commitment to responsible fisheries management and to close dialogue with stakeholders on the sustainability issue. To this end the Organisation will evaluate appropriate strategies, which will be considered at its forthcoming Board meetings.

The meal and oil products from feed fisheries are natural and balanced with notable health benefits from their high omega-3 fatty acid content. This contributes directly to human health via fish oil rich supplements, and then indirectly through consumption of food products from animal fed on diets including fishmeal and oil. Farm livestock and companion animal health and welfare are also enhanced by consumption of fishmeal and oil. The conference foresaw a greater industry focus on added value niche markets for nutritional supplements and health foods as well as speciality animal feed products. This would not be possible without the considerable strides already being made by producers to achieve quality accreditation and downstream traceability.

During her speech to the conference, IFFO’s President, Sólveig Samúelsdóttir took the opportunity of expressing the Organisation’s gratitude to Stuart Barlow for his distinguished contribution over 25 years as Director General of IFOMA, then IFFO, and to welcome his successor, Jonathan Shepherd.

IFFO

The IFFO-5 (Peru, Chile, Norway, Iceland and Denmark) represent about 55% of world production of fishmeal and 74% of global exports. Total world feed fish catch (ie the industrial fish catch) is around 30 million tonnes per annum, – from which 5.4 million tonnes of fishmeal and 0.9 million tonnes of fish oil were produced in 2003. Total IFFO membership represents about 2/3 of world production of fishmeal and 95% of fishmeal exports. IFFO has members and associates in 35 countries.