South American fishmeal producers control market

If you are a buyer out there seeking cover in fishmeal you better be prepared to evaluate quoted levels, close your eyes, and bid the asking price—and hope all the while that the lot you were after has not been sold to other interests because you hesitated for a moment.

December 14, 2005

The failure of production in Scandinavian fisheries on top of the destruction of the US industry by Hurricane Katrina has brought riches to South American producers.

While Peru posted a historical record high weekly catch in week 47 of the year, you dare not request a firm offer from a producer—they only scoff at you. If you are a buyer out there seeking cover in fishmeal you better be prepared to evaluate quoted levels, close your eyes, and bid the asking price—and hope all the while that the lot you were after has not been sold to other interests because you hesitated for a moment. Many consumers are still in disbelief. This has lead to resistance to higher prices and many users “missing the market”.

The options now are few for fishmeal or fishoil consumers until at least next March or April when the long season opens in Peru and the USA comes back on line with Gulf production of menhaden.

Meanwhile—what of Denmark, Norway and Iceland? Nobody knows, but if these three nations continue to produce as poorly as in the last season, the “seller’s market will continue. Fishmeal users will move to other ingredients to the maximum extent possible. [Source: Agniel COmmodities. Read the full report ]

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