Monday, October 6, 2014

06/10/2014: The El Niño effect

The El Niño Southern Oscillation (ENSO) is a climate event, where the adverse warming of sea surface temperatures in the Pacific Ocean leads to extreme weather conditions affecting weather systems and countries globally, as reported in International Aquafeed magazine 1404.

Climatic impact varies from extreme rain-fall and flooding in some areas, to extreme
droughts and high temperature in others. From a food and feed perspective these changes can have devastating effects on industry, with farmers, fishermen and local industry and finance having to contend with extreme weather events leading to crop failure, rapid soil erosion, damage to industry and suboptimal conditions leading to out-breaks of disease.

 In the last severe El Niño in 1998, rainfall in Peru reached 40 times the average. El Niño events occur roughly once every five to seven years and although they are relatively short in duration they can have far reaching and long lasting impacts on industries involved in animal and crop production. The chances of an El Niño event occurring this summer (2014) are currently estimated at 70 percent.

What affect does this have on industry?
Fisheries - A clear impact of El Niño events can be seen in Peru and the impact on the Peruvian anchovy fisheries sector, producing the bulk of the world’s fishmeal. El Niño reduces anchovy spawning and leads to a change in migration patterns, typically causing huge disruption in the fisheries sector. In each year where El Niño occurred (1972, 1982 and 1997) huge reductions in anchovy catches resulted, and the near collapse of the industry was experienced.

As well as water temperatures affecting the migration and spawning of the Peruvian anchovy population, many Peruvian fishermen are at the mercy of the weather. These conditions often cause huge disruption to the fishing effort, increasing the costs of fishing and the ultimately the ability of the fishermen to repay loans. With the increased costs of catching, coupled with reduced catches, the result is huge increases in fishmeal prices.

Terrestrial farmers
With the development of more and more plant based feeds for aquaculture, the effects of El Niño put pressure on some of the key grain and soy producing regions of the world. With ever increasing competition for land to supply feed for humans, biofuels and fodder crops any disruption to supply can have marked effects on raw material pricing.

The 1997-98 El Niño severely affected the Southeast Asia and Oceania regions, leading to wide scale crops failures and huge increases in food prices which, in turn, resulted in sustained hardship for many across the region.

Grain production in eastern Australia and the Philippines reduced dramatically, and the
same is anticipated during the next El Niño event.

Feed manufacturers
Modern aquaculture feeds are increasingly dependent on ingredients coming from a number of suppliers, usually globally sourced, and typically using both terrestrial (grains or soybean) and marine (fishmeal) suppliers. Consequently, aquaculture feed producers are affected by most of the major effects of El Niño events. Increased raw material prices might be offset by passing these costs on to feed buyers, but by how much and for how

Fish farmers
Fish farmers, as the end user in terms of aquaculture feeds, bear the brunt of increase in raw material price rises. Unless they have managed to secure long term contracts with feed suppliers, or avoided fixed price supply deals with fish markets, they are heavily
exposed to feed price fluctuations.

Feed prices make up a significant portion of the costs of fish production, and will erode profit margins unless prices are passed on to the consumer.

Read more HERE.

The Aquaculturists
This blog is maintained by The Aquaculturists staff and is supported by the
magazine International Aquafeed which is published by
Perendale Publishers Ltd

For additional daily news from aquaculture around the world: aquacutlure-news

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