The last weeks we have seen increasing number of business for both Salmon Meal and Oil. The buying interest has been driven by two factors: Physical shortage; i.e. contracts are already at an end, so new volume is needed. And there is no more bearish news to be expected. Everybody forecasted large fisheries in south america this spring and lower prices. The fishing is coming to an end, and no more expected inputs for some time (apart from US weather market, Greek debt crisis, currency fluctuationsŠ..).
In the larger picture, there is again more and more talk of a possible El Nino. Some input from various reports:
Now, over the last few years, there has been several El Nino warnings. And, as general person it may be difficult to predict the effect on this in the market. Some time the prices rise strongly, sometimes not.
If we try and og beyond the El Nino, and look for some general trends for our markets, we may mention:
-Several buyers are now buying more long term than in the past. In this way they secure the supply of the given quality, and are not so much exposed to variations.
-Many sellers has better possibilities (both physically and financially) to store fish meal and oil. Also this even out the prices.
-The price spread between high and low qualities of both fish meal and oil is widening. Buyers are more selective, and has more knowledge of what they buy.
-There are more origins of fish meal and oil world wide. So the influence of Peruvian fisheries is not longer that big.
-More of the fish is going for human consumption. This reduce the availability for fish meal and oil, and these two products increase in price compared to vegetable proteins or fats.
And, the verdict for this week: Salmon Meal higher. Salmon Oil unchanged.