The Peruvian anchovy industry may be one of the most dynamic food-producing industries in the world. Following the pattern of a very strong El Niño occurring every eight to thirteen years, the industry is long overdue for the next big event. What’s to be expected for Peru’s first fishing season of 2015?
“Due to the continuing potential for an El Niño, the prospects for the first fishing season of 2015 are still uncertain. Anchovies and other open sea schooling fish have always returned after an El Niño,” said Rabobank Seafood Analyst Gorjan Nikolik. “For more than a thousand years El Niño has caused volatility in the pelagic market and will continue to do so. Historically, volatility has been part of the business model for the anchovy industry.”
The Peruvian anchovy industry is the world’s single-largest fishery, the largest source of fish meal and fish oil, and is providing some 40 percent of the traded volume. Last year’s climatic conditions shut down the Peruvian anchovy industry’s second fishing season, resulting in lost revenues of over US$ 1 billion.
“Despite current difficulties, strong longer-term global demand for fish meal and fish oil will support prices. Ultimately, this long-term dynamic, good regulation and an eventual recovery of the fish stocks will bring profitability back to the industry,” said Nikolik.
In the past, the industry has experienced continual transformation in virtually every decade. The transformation has been triggered by the need to adjust to the volatile environment and respond to El Niño events and even long-term changes in fishing technology and market conditions.
“Once fishing normalizes, profits will return. Producers able to withstand the volatility in this sector will reap the long-term benefits and unrealized upside potential of the anchovy,” concluded Nikolik.