Peru’s anchovy quota sizeable, but reaching it could be a challenge

The second season for anchovy fishing in Peru’s north-center region has just been launched and the capture limit of 2.7 million metric tons (MT) for indirect human consumption is seen as positive by industry players, but initial results may indicate that meeting that quota may prove to be a challenge.

“This is a sector that depends a lot on volume. There can be fluctuations in prices and costs, but volume will always be the most important indicator to know where this sector is headed in terms of profitability and enterprise value,” Pesquera Diamante CEO Pablo Trapunsky told SeafoodSource.

Peru’s Sea Institute (Imarpe), a specialized technical agency of Peru’s Ministry of Production (PRODUCE) which advises the state on marine conservation issues, “established a large quota and this is great news for the industry. It will be good to regain the value we once had.”

“We’re very happy that the authorities see a great opportunity in terms of quotas. This industry is evaluated on those terms – once the quota is decreased, the value of the companies fall as well. So getting back to quota numbers will hopefully bring us back to our former value,” Trapunsky added.

The executive was referring to the recovery of anchovy fishing in Peru. While 2018 was considered “very good” by industry players, previous years saw poor performance in terms of catch limits established and actual catches.  

However, having a healthy overall catch limit of 4.89 milllion MT does not necessarily guarantee a productive season, Trapunsky noted.

“The actual catches – the real activity that happens on the sea – doesn’t always go as expected. The IMARPE inspection cruise was done in September and October, we’re now in November. Things move, the ocean is dynamic and so are the fish. We’re facing a different situation than that found by the IMARPE investigation crew,” he said.  

Changes in salinity, temperature, and more can all effect where the anchovies are and how they behave, which in turn impacts how effective the fleet is when trying to catch them.

“Currently, we have high salinity water close to the shore, and anchovies are very sensitive to salinity content. Temperatures are OK but the problem is the salinity. They spread out and don’t form the large schools so that makes them harder to catch,” Trapunsky said. “Roughly 90 percent of all the fishing fleet is operating in the same area in the north of Peru, and so far this has been the only area [for catchment] since the beginning of the season. The average catch per day for the whole fishing fleet has not met expectations. So it’s complicated.”

According to the executive, considering the average so far and projecting that to December and January, it would be” very difficult” to reach the quota assigned, with current expectations closer to 80 to 90 percent of the quota.

“That may change, it will all depend on the next few weeks and especially in December and January. So far it’s only been two weeks, so we need to wait a bit more to see, the season will last another 70 days,” he said.

He added that anchovies represent the vast majority of Pesquera Diamante’s business.

“Mackerel and jack mackerel are in the off-season for anchovies. So far this year we’ve caught 25,000 tons of mackerel and jack mackerel and this is basically serving frozen and fresh markets, and a portion of it goes to canning,” Trapunsky said. “But this represents about 10 percent of the whole company’s turnover.”

He added that the company is focusing on improving internal processes and realizing more synergies, such as the implementation of a SAP ERP system to replace more than a dozen applications with which the company currently works. The new system is slated to go live in August 2020, consolidating company information and numbers.

Another area of focus is in revamping Pesquera Diamante’s fishing fleet. The company recently put the ship Sebastián back into operations following a USD 2.5 million (EUR 2.27 million) investment to remodel, enlarge, and increase capacity, and improve refrigeration and efficiency. Trapunsky said the company is in the process of running through the numbers to see which is better – building new vessels or converting existing ones, but that the idea is to continue converting all the systems similar to Sebastián, “which is presenting very good results.”

In terms of the overall industry in Peru, the sector has some “interesting opportunities to consolidate the quota, which is fragmented and in many hands.” Processing plants could also be consolidated in order to obtain more synergies from the quota system, he noted. However, Pesquera Diamante is not actively looking for acquisitions “but we’re always willing to consider any opportunities that may come up.”

Pesquera Diamante, a major supplier of anchovies to the fish meal market, is Peru's third-largest fishing company and has been in existence for 30 years. It earned some USD 222 million (EUR 201 million) in 2018 and it handles about 8.5 percent of Peru’s total quota for capture.

Photo courtesy of Peru anchoveta Sociedad Nacional de Pesqueria