NEWS

See all articles

Exalmar CEO: Peruvian fishmeal markets, prices settle

After spikes during the three-year-long El Nino, prices are normalizing -- and so is demand, top exec told IntraFish.

Peruvian fishmeal prices are falling back down to earth and reaching stable levels after three years of roller-coaster changes.

Fishmeal premium prices are currently averaging around $1,500 (€1,406) per metric ton, and the quality is extremely good, Rosana Ortiz, CEO of fishing company Pesquera Exalmar, told IntraFish at the North Atlantic Seafood Forum (NASF) conference in Bergen last week.

In a turbulent three years of El Nino, prices jumped as high as $2,000 (€1,875) per metric ton, but Ortiz is confident that volatility hasn't affected demand in the long run.

“It is true that you lose some market share to other producing countries, especially when prices are exorbitant, like the $2,000 (€1,875) per metric ton we saw after the 2014 closure,” Ortiz said.

“But once prices go back to normal, anywhere between $1,300 (€1,219) and $1,600 (€1,500) per metric ton, clients come back to Peruvian raw material due to the difference in quality."

Exalmar, which maintained its B3 Moody’s rating in the latest assessment but reported negative figures in 2016, expects supplies and markets to improve with the end of El Nino.

“In northern Peru we have two seasons, and the performance of the second season is only reflected in the company’s financial results of the following year,” Ortiz said. “The second season of 2016 was very good, we caught the full quota and that will be reflected in the next results.”

In explaining the low credit rating, Ortiz told IntraFish the audit took place before it was clear the season would end up at full quota utilization.

“I assume the rating will go up when we include the results of the second season in our report," she said. "The risk was high prior to the opening, but it turned out to be a very good season."

The impact of the latest El Nino was manageable for Exalmar, in part because of good preparation.

“It is something you always need to consider when you are in Peru, it has been long, but we have handled it and it’s over now,” Ortiz said.

The group maintained its permanent workforce throughout the difficult period, but like any other fishing company, crews are a variable cost adjusted to the workload.

“When there is no fishing we obviously don’t have the fishermen, but workers at the processing plants are very skilled and experienced people and we promote other activities when the supply of fish is small to keep their jobs,” Ortiz said.

For the coming years, the outlook for fishmeal and fish oil is very positive, and despite a surge in feed ingredient alternatives, Ortiz said anchovy will always be essential in aquaculture.

“The quality of the fish is not the same, I do think the markets will rationalize but there is a very critical phase of the farming process when marine ingredients are just essential,” she said referring to the smolt feeding phase.

---

For more seafood news and updates, follow us on Facebook and Twitter or sign up for our daily newsletter.