International Diving in Peru: The Fishing Sector

Peru boasts a coastline of 3080 km (1914m), bordering Ecuador to the North and Chile in the south, and hosts over 12,000 lakes and lagoons. The country has over 40 ports with Paita (northern Peru) and Callao (central Peru) being the most important centers that produce marketable fish such as hake, giant squid, bonito, mackerel, and tuna along with over 40 other species that are commercially caught. While it only accounts for a small portion of GDP, seafood products account for the second-highest source of foreign income behind mining.

The Peruvian fishing sector is perhaps, most globally recognized as leading the world in tons harvested of the Anchoveta, (Peruvian Anchovy) a keystone to the adjacent fishmeal industry and plays a critical role in supporting the ecosystem up and down the food chain.

Fish meal and fish oil exportation, supported by the anchovy fishery, was the country’s highest generator of foreign currency behind mining. The industry flourished in the sixties, but the combined effect of El Niño events and overfishing caused up to a 35% decrease in production for two decades.

Sustained public, private, and NGO sustainability efforts and regulations have resulted in a recent strengthening of the Peruvian Fishing Sector. Recent years have seen substantial regulatory investment in sustainable fishing practices, small-scale increase in non-traditional fish products for exportation, and recent increases in the tonnage caught for anchoveta, hake, and giant squid.

The inland and marine aquaculture sector remain less developed, and when up against the fishmeal industry, the aquaculture sector represents only 2% of total fish exports, according to the Peru Ministry of Production.

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Aquaculture, however, constitutes the fastest growing and most profitable industry within the Peruvian fishing sector representing 2% of fish exports, but 10% of revenues.

Peruvian Fisheries Structure

Of the main economic sectors, there are the fishing, aquaculture, and processing industries, which employ around 211,000 people. Each serves an important role as a source of foreign income and employment. The marine fishery caught over 3.5 metric tons in 2014 and is the bedrock of the industry and the anchovy accounted for 65% of those annual landings.

Peruvian fleets are divided into groups: large scale (30 metric tons and above) and small scale (below 30 metric tons). There are about 108 large-scale fishing vessels of which 40% are dedicated to Purse Seiner vessels licensed to catch anchovy and sardines found within 100 nautical miles off the coast. Purse Seiner vessels are most common in Northern Peru, (i.e. Paita) where over 700 marine species are found but only 11% are used for human consumption.

The fleet remaining 60% are made small-scale for sustainabletrawlers dedicated to harvesting mackerel, crayfish, giant squid (pota), and hake (representing 95% of all species wild-caught). Hake can be found in shallow waters 500 miles north of Peru in the Eastern Pacific near the Gulf of California. The remaining group of Artisanal fisheries is made of approximately 6,300 wooden vessels – with only 35% of them having engines. These are the sector’s local operations that are only allowed to fish for direct human consumption.

In Peru, fisheries are not limited to the coast. Most of the inland fishing is done on Lake Titicaca with driftnets and aquaculture operations. Trout production on Lake Titicaca asector’sccounted for 25% of all aquaculture production in 2014 with tilapia and a variety of Amazonian fish making up the remaining portion.

Marine (open water) aquaculture landed over 75,000 tons of shrimp and scallops in 2014. 55% of national production is concentrated off the coast near the Piura and Tumbes ports.2

Environmental Conditions

The external threat facing the fishing sector is the adverse effect of climate cycles. Since 2014, the climate cycle has produced three consecutive El Niño events resulting in warm nutrient-poor ocean water typically occurring from April to October. In 1972, the Anchoveta fishery faced a collapse due to overfishing during El Niño. Beyond possible collapse, the warmer water leads to changes and variability of available marine species presenting further challenges to the fisherman.

Overfishing and gaps in regulation have posed a threat to the fishing sectors resource stability. For example, Peru’s giant squid fishery represents half of the global catch. The World Wildlife Fund estimates that over 60% of Peru’s squid fleet is unlicensed and unregistered. This can lead to overfishing and makes the product difficult to verify its origin, which is unattractive to the US and EU markets. Working with organizations like WWF and others, the Ministry of Production and artisanal fisheries have been successful in formalizing cooperatives, implementing catch and register systems, and traceability systems.

Regulatory Environment, Stakeholders, and Support Programs

With the help of a $40 Million World Bank loan, the Peruvian government has recently modernized the anchovy and squid fisheries. These fisheries were treated as an open-access resource which led to companies overfishing this precious resource. With the help of the World Bank, quotas and permitting systems were adopted reducing the overall fleet by 25%. FONCOPES, a private compensation fund, provided small business training and advice. Since the implementation of these systems, anchovy stocks have been improving, though overall stock levels are still subject to shifting ocean currents.

Under the umbrella of the Ministry of Production, Peru’s governmental body charged with formulating, executing, and supervising all levels of the fishery sector, are several decentralized agencies, institutes, and non-profits that serve to support the overall health and growth of the sector. Scientific bodies like Instituto del Mar del Peru (IMARPE) report to the state on marine conservation and resource management. Snipes regulates the seafood product industry and has the power to issue certifications for the safety and health of products. Trade organizations like Sociedad Nacional de Pesqueria (SNP) and Sociedad Nacional de Industrias promote, report on, and lobby for industry as well.

PromPerú Profile

Operating under the Ministry of Foreign Trade and Tourism (MINCETUR) is Peru’s award-winning (Travel Awards: Best Tourism Office 2016) Export and Tourism Promotion Agency. PromPerú has a mandate by the government to promote Peruvian-made products for exportation as well as promote inbound tourism. PromPerú’s mission is “to position Peru on the global scene by promoting the nation’s image as a tourist destination and producer of value-added products, thus contributing to the nation’s sustainable decentralized development. Concerning the fishing sector, PromPerú would function to “implement sector policies for export and image promotion; Proposes and executes strategies for the sector’s exports; Can open offices and appoint trade representatives to promote sector exports; Is responsible for designing, implementing, and managing the “Peru Country Brand”.

Some recent examples of PromPerú’s efforts include the promotion of new Peruvian seafood products at the 2018 Global Seafood Expo. Frozen prepared ceviche and flavored hake slices were promoted at the events by Karl Berger, the coordinator of the fisheries product department at PromPerú, as an effort to diversify the country’s seafood offerings for export. According to Berger, “Perú’s long-term goal is to diversify both its product offerings and the number of markets it serves. Currently, these initiatives are coinciding with new trade groups (CALAMSUR) focused on responding to the demand for sustainable products, a growing shrimp and scallop aquaculture industry, and over $32.5 Million in business at the 2018 North America Seafood Expo.

Economic Outlook:

After years of low fish stocks, shifting ocean currents, and significant effort to modernize the sector, Peru’s fishery sector is showing signs of recovery. The industry contributes to the country’s GDP through the amount of foreign currency brought in through exports, several jobs it generates, and the volume produced for direct human consumption. The large supply contributes to high per capita fish consumption in Peru as well, which is twice as high as the consumption of red meat. Over the last 40+ years, Peru’s fishery sector has shown an upward trend with exports accounting for over USD 800M in 2017, or 1.9% of GDP.

There is increased optimism for the economic prospects of the sector according to the Ministry of Production. In May 2018, the sector grew 33.8% year over year. Higher anchovy landings and higher landings of giant squid, mackerel, and harvested shrimp for human consumption are contributing to bolstering the sector at present.

The first half of 2018 saw an 80% rise in fish product exports for human consumption according to SNI. Fish for human consumption plays a significant role in determining the economic outlook of the sector as its manufacturing processes and export contribute to 85% of employment and 51% of total fish export revenue.

There is also a sense of optimism for the continued diversification of import markets. While the United States remains the top importer of Peruvian seafood, PromPeru expects continued growth in the EU (Spain, France, and Italy), Japan, and South Korea. China is the third-largest importer of Peruvian seafood, 70% of which were fishmeal products. According to ADEX, an association for exporters in Peru, over 300 companies participate in exporting seafood products, with around 50 accounting for over 80% of all exported seafood by weight. As well, the constantly growing aquaculture sector will be part of reaching the demand and achieving long-term diversification goals as experts anticipate 20% growth over the next five years. The Ministry of Production has reported that aquaculture production has increased, by four times since 2006 and could represent up to 15% of the entire sector’s GDP in the next five years.4,5