Incredibly high in nutritional value, fishmeal has been the backbone of the meat and aquaculture industry as a source of feed. As trade gears up again in China, the world’s largest importer of fishmeal, the demand is slowly recovering, favoring Norway, which has long-awaited to supply the Chinese market again.
Norway Gains Re-entry to the Chinese Market
Since 2019, Norway has made efforts to regain seafood trade with China since it blocked Norwegian imports of fishmeal in 2011. And in March 2020, agreements between the two countries closed successfully, allowing Norwegian fishmeal and fish oil exports into the Chinese market, effective for 5 years. Fish meal exports to China trickles-down to its meat and aquaculture industry, specifically in the growth of shrimp, high-value fish, and piglets. China’s imports of fishmeal have topped globally to 1.65 million metric tons in FY 2019, with the top supplier being Peru, which in MY 2018/2019, has exported 80% of its fishmeal to China.
Production-wise, Norway also falls short of Peru, with an annual average production volume of 170K tons for fishmeal and oil, while Peru reported 1.19 million metric tons in MY 2018/2019. However, China has expressed its need for diversification of the aquafeed market, as Peru’s supplies have been unpredictable with recent weather conditions, owing to El Niño, as well as the onset of the coronavirus, giving way to growing markets like Norway.
Prices Pressured Upwards Due to Shortages and High Demand
Fishmeal prices have largely been increasing due to limited global production, while demand has been consistently growing in the Chinese market. Peru, which dominates 18% of the total fishmeal market, has been a large contributor to the slowdown in trade due to the pandemic, with quarantine measures in place and the majority of fishmeal plants being closed.
According to Undercurrent News, Peruvian fishmeal offer prices at Shanghai ports were CNY 13,500 per ton (USD 1,902 per ton) from March 30 to April 5, a jump of CNY 150 per ton (USD 21 per ton) from the previous week. Inventories at Chinese ports are also being depleted and have also been lowering at a fast rate. With suppliers in a tight spot, increases in imports from Norway and other small markets such as Chile and Mauritania are expected.
Outlook for Norway Fishmeal Exports
Entering such a large market is opportune for Norway, but during this time, protecting domestic supplies will likely be a priority. Norway has recently allowed fishmeal to be included in livestock and poultry feeds due to a recent shortage of feed imports with essential nutrients required for animal growth. This permit is a temporary measure to keep food production running.