Pelagic Days, Norwegian Seafood Council Bergen September 4, 2014

Transcription

1 Pelagic Days, Norwegian Seafood Council Bergen September 4, 2014 Prepared and presented by: Jean-François MITTAINE Fishmeal Experts Office, Paris, France Co-editor Fish Oil & Meal World Tel/Fax: (33) mobile: (33) jfmittaine@gmail.com

2 Two points to keep in mind 2 key regional fishmeal markets: the Asia-Pacific market :abt 60% of world demand - aquaculture (shrimps and carnivorous fish) - pigs (mainly piglets in China) the European/Mediterranean market: abt 20% of world demand mainly aquaculture: - salmon in Northern Europe -sea bass/sea bream in the Mediterranean basin + trouts in Continental Europe. Fishmeal is a cash market No futures. The price fixing system is through BIDS from buyers to producers also frame contracts between large producers and large feed buyers on B to B basis (mostly unknown to the market).

3 Presentation A- The Trends: Global Production: Many countries (40+)produce FM either from wild resource or from Trimming Rise of New producers. Global consumption: China, Asia, Europe by type of usage World Trade: Largest exporters/largest importers B Supply/Demand, Stocks and Prices C- The Current situation D- Conclusion- Our Outlook Various scenarii

4 The Global Trends

5 The Global Fishmeal Production

6 The Global Fishmeal Consumption

7 Fishmeal Trade The Top 10 Largest Exporters (avge 09/ 13) Fishmeal is export oriented commodity: Average 09/ 13: 2.4 Mn T => 55% to 75% of world production is exported. South America: 74%+ of world exports Share of the top 10 exporters has declined to around 75% of world exports Rising importance of the new exporters in Asia, Americas and Africa

8 Fishmeal Trade The Top 10 Largest Importers (avge 09/ 13) More than 88% of world imports from 5 major groups of countries China and Asia:75% + of world imports

9 World Fishmeal Supply/Demand Stocks & Prices

10 Supply/Demand & Stocks

11 Fishmeal Prices FOB Peru & CIF Europe

12 Fishmeal Prices Ex-Port Storage China (Super-Prime Shanghai)

13 The Current Situation

14 Slow Production No fishing in Peru since Aug. 10 in the North/Centre opened in the south but inactive. Current IMARPE research cruise => Expected results around end Sept. In Chile: fishing bans in both the north (until abt Sept 25), & the south until Oct 25. In the USA: end of the menhaden season sometimes in October In Scandinavia: low season

15 but also Slow Demand Top 10 World fishmeal consuming countries in 2014 (forecast) Asia: 80% of the Top 10

16 Slow Demand in China (Weekly Port Off-Takes) In spite of a good start of port off-takes until mid-june... 2 typhoons affected the key shrimp industry in July=> sharp decline Although very small recovery last week (to be confirmed) still about a third below the 3-years average. Fishmeal stocks in Chinese ports remain about average but 80 Thd T additional floating supply is expected in September.

17 2014 Unsold Stocks in Peru Although Super-prime qualities are scarce more than 130 Thd T unsold stocks in Peru mostly constituted of standard quality fishmeal.

18 2014 Declining competitive advantage with vegetable proteins The recent decline of soya meal prices has raised fishmeal/soya meal price ratio to its highest level in a year. Basis FOB Peru/FOB Brazil Basis Chinese ex-port storage

19 Our View of the Market

20 The key drivers of the fishmeal market The management of fish resources in key producing countries, particularly Peru (science and policies). Demand from China and other Asian countries. Competition from new fishmeal origins in Asia, Africa, South America. Competition from other sources of protein and the fishmeal/soya meal price ratio, Developments in Aquaculture in Asia/Europe. Evolution of the fishmeal incorporation rate in aqua-feed rations.

21 A Special Note on El-Niño What is El-Niño? SST anomalies +0.5 C during 3 months + trade winds decline and replaced by westerly winds. July-Aug. 14 SST anomalies vs during last full-fledged El-Niño CPC probabilistic model shows 65% chance in Nov./Dec./Jan. (down from 80% a month ago)

22 the impact on Peruvian fishery As SSTs are rising: othe anchovy shoals are dispersed o The resource is moving south => no catches in the north and more in the centre o Oil yields are declining

23 and how it may affect the full year 2014 Our 2014 forecast takes into account: the unfilled North/Centre quota (landings 1.72 Mn T vs 2.53 Mn T) A quota Nov./Dec. of 1.3 Mn Thd T (our estimate) plus landings in the South (613 Thd T for the year under separate quota) Total landings forecast for 2014: 3.83Mn T vs 4.96 Mn T in 2013 & 3.4 Mn T in 2010 (last El-Niño)

24 Fishmeal Quality: A key market factor Current market: a whole range of FM qualities from FAQ to Super- Prime (Histamine max 500) Also many specifications include TVN limits Current pricing structure in the Peruvian trade: Super-Prime is the base price, all other qualities (except FAQ) are discounted by increments of 20$. Only about 10 years ago did China started to buy Super-Prime from Peru FAQ is discounted around $100 below the lowest SD Quality.

25 Our Outlook 1) Market is currently blocked: No buyers => expect lower prices No sellers => no or low production 2) Problem of price: Currently differential of $150 between buyers view and producers view. 3) Outlook: depends on demand in China/Europe + production in Peru: - In China, estimated 2014 fishmeal imports: 1.1 Mn T of which 0.72 Mn T imported in Jan.-July Plus Arrived in Aug. or floating: 0.19 Mn T To buy for arrival 2014: 0.19 Mn T (all origins) - Europe: well covered. - In Peru: uncertainty on the Nov./Dec. quota 4) Declining soya meal prices makes fishmeal less competitive with ratio over 3.0 => Our bearish view of the coming months. until the Asian Pacific market starts again!

26 Conclusion Various scenarios 1) China need to buy to cover last months of 2014 fishmeal demand (slow) and ensure adequate carry over stock => When? 2 opportunities: JCI conference late September IFFO conference late October. Price setting periods 2) But end of the shrimp season in Oct. => port off-takes decline => prices decline to get rid of old crop fishmeal => bearish on prices 3) Chinese buyers yield to producers firmness and buy at current prices Will have to protect their purchase price => bullish on price 4) Poor IMARPE findings and Nov./Dec. quota is low:=>bullish on price. up to a certain limit fixed by the fishmeal soya meal price ratio.

27 Additional Comments on the Current Fishmeal Trading Environment The fishmeal business has gone through important changes in the past years: Most fishmeal producers all over the world operate modern plants Trading is not any more closed on one shot deal basis. Current trading practices necessitate: o Frequent prior producer s registration to importing countries authorities. Ex: China with AQSQ and MOA approval. o Strict quality specifications (proteins, histamines, TBN, etc ). o More and more certification (mainly on sustainability of resource) required from buyers - Ex: IFFO RS. Due to the sophisticated industrial nature of the main buyers, trade is widely based on B to B business, often without intermediaries. Nowadays, most of the trades are executed in containers (ex: Peru to China 600 Thd T/year - 100% containers!!!). => A totally new world. Fishmeal has become a high tech biological nutrient, not any more a commodity.

28 Fish, Oil & Meal World A new vision of the global fishmeal & fish oil markets. Reproduction forbidden.- More info on: Thank You If I can be of assistance to you in the future, you are invited to contact me any time. jfmittaine@gmail.com More details and background information are provided in FISH, OIL & MEAL WORLD and in OIL WORLD reports that can be provided upon request. It will be my pleasure to assist whenever possible.

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