Peru is set to skip its second anchovy season, and the plant-based fish-oil substitute that was written off may come back

On October 12, 2026 a fishmeal broker told buyers that Peru will keep its north-central anchovy fishery, the world’s largest, closed for the rest of 2026, according to Undercurrent News; a formal government announcement was described as imminent. Peruvian media reported on October 8 that a meeting of the production ministry, the research institute IMARPE and industry found a second season unlikely. IMARPE’s survey, run September 15 to October 7, reportedly found many juvenile fish and sea temperatures several degrees above normal.

The 2026 first season closed with about 471,000 tonnes landed against a 1.9 million-tonne quota, itself the lowest in a decade apart from the cancelled 2023 season. Peru normally supplies about 20% of the world’s fishmeal and fish oil. The fishmeal trade body IFFO forecast on October 8, 2026 that global fishmeal supply will fall below 4.6 million tonnes and fish oil to about 1.15 million tonnes this year, both the lowest since 2016; output in IFFO-tracked countries to August was down 45% for fishmeal and 26% for fish oil.

NOAA’s October 8, 2026 update put the Niño-3.4 anomaly at +2.1°C and said a strong-to-very strong El Niño is likely through January–March 2027, with more warm water forecast off Peru for November and December. Feed is 40–50% of Chilean salmon farming costs and fish oil, needed for omega-3 levels, is the hardest ingredient to replace. Bakkafrost said in June 2026 that marine raw material prices had already risen 5–10% and would reach its costs by late 2026 or early 2027.

Opportunity

The obvious reading is a fishing story with Peruvian losers. The less obvious one is that a year without Peruvian anchovy changes the economics of the substitutes. In 2025 fish oil was cheap, and Nufarm’s plant-based omega-3 canola oil (Aquaterra) lost so much ground that Nufarm reported a A$165 million loss for the year to September 2025 and wrote down its seed division; its shares fell from A$4.02 on May 20, 2025 to A$2.47 on May 23, 2025.

The turn has started without a supply shock. In May 2026 Nufarm said its emerging platforms, mainly omega-3, improved by A$26 million in the half and raised the full-year improvement target to A$40 million; secondary reporting in September 2026 cited “improved Omega-3 pricing”. Nufarm closed at A$3.10 on October 14, 2026, 71% above its March 23, 2026 low of A$1.815 and still below the pre-collapse level.

Hypothesis: the first-half recovery in omega-3 pricing came from a weak first anchovy season alone; a cancelled second season, in a very strong El Niño that may also hit the 2027 first season, would tighten fish oil much further, and the market may not yet be pricing a full scarcity year into a business it wrote off eighteen months ago. Algal omega-3 producers (Corbion’s AlgaPrime DHA, the DSM-Firmenich/Evonik venture Veramaris) and fishmeal producers outside the El Niño zone face the same tailwind, while salmon and shrimp farmers carry the cost.

How it could play out

Peru confirms no second season → fish oil buyers lose roughly a fifth of normal world supply for a second straight half-year → fish oil prices rise and feed makers reformulate toward canola, algal and krill omega-3 → Nufarm’s omega-3 volumes and prices improve into FY27, which its November 19, 2026 results and outlook would be the first chance to show → salmon farmers face higher feed costs into 2027 → if El Niño also damages Peru’s April 2027 first season, the shortage extends into a second year.

Questions worth asking

• How much of Nufarm’s omega-3 canola for 2027 is already contracted at fixed prices, and how much can be sold into a fish oil spike?
• Is a cancelled second season the base case for China’s fishmeal buyers already, or is the official announcement still a surprise to fish oil prices?
• Which feed makers — Mowi’s own feed plants, BioMar, Cargill, Skretting — can reformulate fastest, and who buys the substitutes?
• Does a very strong El Niño typically hurt the following April’s Peruvian first season, and what did 1997–98 do to it?
• Which fishmeal producers outside the eastern Pacific — US Gulf menhaden, North Atlantic, Indian Ocean — have spare volume to sell at higher prices?

Where to look

• Nufarm (NUF.AX) — its Aquaterra omega-3 canola oil is a direct fish oil substitute whose losses drove the 2025 collapse
• Corbion (CRBN.AS) — makes AlgaPrime DHA, an algal omega-3 sold into salmon and shrimp feed
• Schouw & Co (SCHO.CO) — owns feed maker BioMar, which must buy marine oils or switch formulas
• Oceana Group (OCE.JO) — owns Daybrook Fisheries, a US Gulf menhaden fishmeal and fish oil producer outside the El Niño zone
• Mowi (MOWI.OL) — largest salmon farmer and a large feed producer, exposed to fish oil costs
• Bakkafrost (BAKKA.OL) — has already flagged rising marine raw material costs from late 2026
• Austevoll Seafood (AUSS.OL) — owns Peruvian anchovy processor Austral Group, a direct loser from a closed season

Thesis check

Peru’s weak first season, IFFO’s lowest-since-2016 forecast and NOAA’s very strong El Niño outlook are all on record from primary or trade sources, and the link between fish oil prices and Nufarm’s omega-3 earnings is documented by Nufarm’s own 2025 losses and 2026 recovery. The weak link: the cancellation is so far a broker’s report rather than a government decision, the omega-3 business is a small part of Nufarm’s roughly A$375 million group EBITDA, and the shares have already risen 71% from their March 2026 low.

Sources

Undercurrent News, Oct 12 2026 · SeafoodSource, Oct 8 2026 · The Fish Site (IFFO), Oct 8 2026 · NOAA Climate Prediction Center, Oct 8 2026 · Fish Farming Expert (IFFO), Sep 14 2026 · Aquaculture Magazine, Aug 31 2026 · Salmon Business, Jun 5 2026 · Nufarm 1H26 results release, May 27 2026 · Discovery Alert, Sep 2026 · Business News Australia, Nov 19 2025