NOAA ups risk of El Nino to 70%, as Peru fishmeal prices soar

June 11, 2014, 5:02 pm

NOAA’s climate prediction center (NCEP) has increased further its forecast on the likelihood of El Nino developing during the summer or autumn this year.

Meanwhile, increased water temperatures have hit anchovy catches, which is affecting fishmeal prices in Peru, climbing further to $1,880 per metric ton this week.

In its latest report, dated June 5, NOAA’s center states there is now 70% likelihood of The El Nino Southern Oscillation (ENSO) — commonly known as El Nino — occurring during summer.

For fall and winter, NOAA has pinned the likelihood at 80%.

Back in May, NCEP increased its predicted risk of an El Nino hitting the waters off South America this year from 50% to more than 65%.

The prediction center said now above-average sea surface temperatures expanded over the equatorial Pacific Ocean during May 2014, which confirms what oceanic scientific Luis Icochea, as well as several industry players, already told Undercurrent News last month.

Sources said at the time abnormalities of sea surface temperature in Peru could already be noticed in May.

“The anchovy has almost disappeared from Chimbote to the north,” Icochea said at the time.

This means anchovy has moved to the south part of Peru, near the shore, where catches are not allowed for the industrial fleet.

Poor catches, fishmeal prices soaring

Even when Peru’s anchovy season was brought forward to April due to the risk of El Nino, anchovy catches have been hit by warmer sea temperatures linked to the possible presence of the weather event.

Also, mini-bans, due to high juvenile levels, have affected catches’ volumes.

“Catches total so far 890,000 metric tons, about 36% of [the first anchovy season] quota,” a large Peruvian fishmeal player told Undercurrent.

The current catch is poor, considering the season – with a total allowable catch of 2.53 millon metric tons — finishes by end of July.

“Usually in other years by this time, we have already caught around 50-60%,” the source said.

Due to the low catches, fishmeal prices from Peru have firmed up.

According to a large Peruvian producer, prices out of Peru are this week at $1,880/t, FOB, for super prime fishmeal, a considerable increase from the $1,600/t – $1,620/t level reported at end of April.

The target estimated is $1,900/t, the Peruvian producer said.

El Nino likely to emerge, but uncertain strength

According to its latest report, NOAA’s prediction center remains confident that El Niño is likely to emerge.

If El Niño forms, forecasters slightly favor a moderate-strength event during the fall or winter, the report reads.

However, NOAA said the strength of the event remains uncertain.

For its part, Icochea told Undercurrent in April that abnormally high temperatures are reminiscent of 1997-98,  the year of one of the strongest El Nino’s ever.

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