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Ref:678/03 |
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WORLD NEWS
- Apr 14, 2003 |
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Fish Oil Prices Expected
to be Strong in 2003 As Aquaculture Demand Grows
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SEAFOOD.COM NEWS April 14, 2003
THE FISH OIL market is facing strong demand and
tight supply, and the upward pricing pressures
witnessed over the past two years continue. Despite
slightly higher overall catches in the major
fish-producing countries in 2002 compared to 2001,
supply remains tight. Fish oil demand in all major
end-use markets, especially in aquaculture,
strengthened in 2002, and many pending contracts in
the industry continue.
'There's hardly any available fish oil currently in
the world,' one industry source says. 'Most of the
supply has been in the spot market for a while. The
Peruvians, the largest fish oil producer globally, are
scheduled to start fishing this month, but it's
anybody's guess whether production there will be good
or not.'
With a continued tight market situation, crude fish
oil prices in the US remain at the high level of
roughly 22 to 23 cents per pound, the same range seen
last year. 'Fish oil pricing hasn't varied that much
because of the tightness in supply worldwide,'
according to one industry source. 'Demand has now
changed, where before, it was primarily used in the
margarines and shortenings market. That market has
almost disappeared. Now most of the demand is going to
the aquaculture industry worldwide.'
'Increase demand in aquaculture was the major factor
driving strong pricing for fish oil throughout 2002,'
notes another source. 'The market continues to see
decreased global inventories throughout the year as
domestic and international aquaculture grew in
importance as a market for fish oil. We believe this
trend will continue,' the source adds.
Demand for fish oil in aquaculture is said to be
growing at around 10 percent per year. Fish oil use
for aquaculture in 2002 accounted for 56 percent of
the projected 2002 fish oil production of 1.3 million
tons. However, others estimate total fish oil
production last year was around 1 million tons,
placing fish oil consumption in aquaculture at 70
percent.
Meanwhile, fish oil consumption in the pharmaceutical
and nutritional sectors were also strong last year,
according to suppliers. Despite being a niche market,
fish oil's use in pharmaceutical, food and nutrition
is growing at an accelerated pace owing to the wide
coverage of fish oil's health benefits.
'Sales of fish oils for pharmaceuticals and
nutritional supplements is most definitely
increasing,' says Mary Ann Siciliano, sales manager at
Wilton, Conn.-based Arista Industries Inc., a major
supplier of marine oils. 'Production lead times are
now two to three weeks longer and a second shift has
been added just to keep up with the demand,' she adds.
Pricing for fish oil in edible and pharmaceutical use
also remains stable. Omega-3 oils are placed at around
$ 3.50 to $ 4.50 per kg while prices for
cholesterol-flee fish oils are placed at $ 4.50 to $ 5
per kg. Cod liver oil pricing (USP grade) is around $
11 per gallon with the market remaining steady, says
one supplier. Supplies for bulk cod oil, however, are
believed to be tight, and many are said to be no
longer offering the product.
Fish oil sales last year for industrial usage also did
well, one supplier adds. Refined fish oil prices for
industrial purposes were steady throughout 2002 and
ranged from 30 to 50 cents per pound depending on
grades. However, because of higher pricing, fish oil
consumption for industrial use has declined slightly
last year compared to 2001. In the US, total inedible
use of fish oil last year declined 17 percent to 2.4
million pounds compared to 3 million pounds in 2001,
according to the US Census.
Growth in industrial consumption over the next 10
years is expected to further shrink. Fish oil
consumption for industrial use currently accounts for
10 to 12 percent of the total global fish oil use.
Future consumption is projected to decline to around 5
to 8 percent by 2010, according to an industry
observer.
This year, overall global fish oil demand is expected
to increase between 900,000 to 1 million tons.
Meanwhile, the outlook for fish oil pricing for 2003
remains uncertain and will mostly depend on supply
from Peru and Chile. One reason behind fish oil's
upward price momentum in 2001 was the low oil content
of fishes from South America stemming from the effects
of El Nino, an unusual oceanographic condition.
'The big unknown is the supply,' says Stuart M. Barlow
of the UK-based International Fishmeal and Fish Oil
Organization. 'Historically, a stable production of
600,000 tons is expected from the rest of the world,
excluding Peru and Chile. Both countries are expected
to produce between 300,000 to 400,000 tons to meet
global fish oil demand. But if oil yields will be
adversely affected by the El Nino, we could see a
considerable hike in fish oil prices in 2003,' Mr.
Barlow adds.
Global Fish Oil Use
2002 2010
Aquafeed 56% 79%
Edible 30% 14%
Industrial 12% 5%
Pharmaceutical 2% 2%
Source: IFFO, Seafood By-products Conference 2002 |
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