Peru. Fish meal&oil Annual. Mar 2015 April 12, 2015

Peru is the largest fishmeal exporter in the world. The country's fishmeal production in marketing year (MY) 2015/16 (January-December 2016) is forecast to reach 950,000 metric tons (MT), 11 percent higher than the MY 2014/2015.

Meal, Fish

Production:

Fishmeal production in marketing year (MY) 2015/16 (January-December 2016) is forecast to reach 950,000 metric tons (MT), 11 percent higher than the MY 2014/2015. Fishmeal production in MY 2013/2014 fell 44 percent compared to the previous year. This significant drop was caused by reduced catch of anchovy due to unusually warmer waters that pushed the fish further south and deeper.

Peru's total allowable catch (i.e. quota) for anchovy (Engraulis ringes), commonly known as anchoveta, in calendar year (CY) 2014 was set at 2.76 million metric tons (MMT), significantly lower than the 5.18 MMT in CY 2013. Reduced fish stocks in 2014 however led to a smaller catch for production.

Peru is attempting to better regulate its domestic fishing industry. Overfishing in previous years has adversely affected Peruvian anchovy stocks. Previously catch quotas were set at the 8.5 MMT level; however, quota sizes have been dropping steadily towards 5 MMT in an attempt to sustainably manage and rebuild stocks.

Peru has two major fishing seasons and two main anchovy fishing grounds off its coast. The first fishing season is April-July for the north central coast and February-June in the southern coast. The second fishing season is November-January in the north central and July-December in the South. These are only reference fishing seasons since they may vary significantly depending fish availability and size. As evidence, in CY 2014 the fishing authority decided not to approve a second fishing season due scarcity of fish at its reduced size.

The government seeks to achieve more sustainable yields by issuing individual quotas per vessel, as well as by restricting the number of fishmeal processing plant licenses that it issues. Peru also bans the catch of fish below a minimum threshold size of 12 centimeters (i.e. juveniles). These efforts have not succeeded in adequately protecting stocks. One of the key reasons why anchovy stocks continue to face pressure from overfishing is due to the exemption extended to small-scale/artisanal vessels (i.e. those with displacement tonnages of up 10 MT) to fish year round within 10 nautical miles from the coast.

The small-scale/artisanal vessel catch is supposedly intended for low cost, direct human consumption. But despite the government's efforts, most of this catch is channeled illicitly to more profitable fishmeal processing. Troubling for the long-term health of this fishery is that poorly regulated small-scale/artisanal vessels normally operate where the bulk of anchovy spawning occurs and juveniles congregate.

Peru produces two fishmeal types or grades. Fair Average Quality (FAQ) fishmeal has a protein content ranging between 62 and 65 percent and is dried by direct heat. More valuable Prime Quality fishmeal, indirectly dried by steam, has a protein content of 66 to 67 percent. International Prime Quality fishmeal prices in 2014 peaked as high as $2,370 per MT compared with an average of $1,599 per MT in CY 2013. Fishmeal prices in CY 2000 were only $475 per MT.

Sources indicate that there are about 90 licensed fishmeal processing plants in Peru. The country's fishing fleet numbers 984 vessels, of which 684 are steel haul boats with average storage capacity of 500 cubic meters. The remaining vessels are wooden with an average storage capacity of only 100 cubic meters. The fishing fleet's processing capacity is about 7,500 MT/hour, an amount that is reached would be four times greater than the permissible catch.

Consumption:

Local fishmeal consumption is insignificant, primarily used for shrimp production, and has little to no effect on the export market. Domestic consumption in MY 2015/16 is forecast at 12,000 MT.

Domestic consumption is expected to continue falling, despite growing demand from northern Peru's shrimp farms, as high international prices channel domestic fishmeal production towards the more lucrative export market. Peru's own aquaculture feed demand is filled increasingly by more affordable imported soybean meal.

Trade:

Peru's fishmeal exports in MY 2015/16 are forecast at 930,000 MMT, increasing 9 percent compared to the previous year. With fishmeal trading at $1,556/MT, the product is Peru's fourth largest export in value-terms behind only gold, copper, and petroleum exports in importance.

China will remaining Peru's leading fishmeal export market for the foreseeable future. China alone absorbed 52 percent of Peru's CY 2014 fishmeal exports. Germany (14 percent) and Japan (8 percent) remain important, though smaller export destinations for Peruvian fishmeal.

Source: SUNAT (Peru Customs).

Policy:

Mounting concerns by the Ministry of Production over the declining fish stocks is forcing Peru to tighten its regulations. The Vice Ministry of Fisheries within the Ministry of Production oversees Peruvian fisheries. Overfishing has forced the ministry to slash fishing quotas by 68 percent, as well as ban large-scale industrial anchovy fishing within 10 miles from Peru's coast. The Vice Minister for Fisheries decreed recently the establishment of boat specific quotas, as opposed to the current system of an overall fishing quota for the entire industry. Individual boat quotas are now set based on the vessel's historic catch record and its proven storage capabilities.

The Ministry of Production is responsible for enforcing the fishing quota. They have inspectors throughout the coast that control that no fish is being disembarked at processing plants during the fishing ban. During fishing season, inspectors control that boats do not exceed its fishing permits. Though these are important measures, there are still some non-registered plants and boats that operate illegally and against which the Ministry is not taking any legal action.

The Ministry of Production has also limited fishing in 2014 by eliminating the second fishing season. The North-Central area total catch for the year was 2.53 MMT, down 42 percent compared to 2013. The Southern cost fishing was scaled down to 234,300 MT falling 72 percent compared to 2013. IMPARE's (Peru's Oceanographic Agency) continuously monitors fish availability and size.

Fish Oil

Outlook:

Fish oil production in MY 2015/16 is estimated to reach 150,000 MT, increasing 55 percent compared to MY 2014/15. Fish oil production volumes will vary with water temperature. Under normal temperature conditions, the oil extraction rate ranges between 8 and 10 percent. However, in unusually warm years the extraction rate may fall as low as one percent. A weak El Niño weather phenomenon is currently on going, bringing warmer waters to Peru's shores during the first fishing season. The warmer water results in lower oil extraction rates because of the fishes' higher metabolism reducing stored fat. Fish oil production in 2013/14 was 175,000 MT.

Fish oil exports in MY 2015/16 are forecast at 130,000 MT. Denmark, Belgium, and Chile, much like in 2014, will remain Peru's largest fish oil export destinations. These three countries alone absorbed over 71 percent of Peru's total fish oil exports in 2014. Fish oil is an increasingly valuable feed ingredient for these countries' aquaculture industries.

Local fish oil consumption in MY 2015/16 will remain at about 20,000 MT, limited by the greater profitability of exporting production overseas.