Peru's Fishing Sector: Navigating Climate Risks and Regulatory Shifts to Capitalize on Blue Economy Growth

The Peruvian fishing sector, fueled by record anchovy landings and robust demand for fishmeal/fish oil exports, has emerged as a critical driver of GDP growth in 2025. Amid climate volatility and regulatory overhauls, the sector presents compelling opportunities for investors in sustainable fisheries infrastructure and export-oriented firms. However, the path to profitability hinges on managing risks tied to El Niño cycles and squid sector fragility. Below, we dissect the catalysts, risks, and investment angles in this dynamic industry.

Catalysts for Growth: Anchovy-Driven GDP and Global Demand Resilience

Peru's anchovy fishery has been the linchpin of its fishing GDP, contributing 0.6–0.8% to national GDP in 2024–2025. The Q2 2025 fishing GDP surged 29.1% year-on-year, driven by a 313% YoY jump in anchovy landings for fishmeal production (reaching 508,200 MT in January alone). This rebound was enabled by quota utilization from the 2024 season and a recovery in the southern fishing zone, where biomass hit 11 million MT—the highest in a decade.

The demand narrative is equally robust. China and the U.S., the top buyers of Peruvian fishmeal, have maintained resilient demand despite macroeconomic headwinds. Fishmeal prices rose 40% globally in early 2025, with Peru accounting for 20% of global supply. This underscores the sector's inflation-resistant pricing power, as fishmeal is a critical input for global aquaculture and livestock feed.

Key Opportunities: Fish Processing and Sustainable Infrastructure

Investors should focus on two areas: fishmeal/fish oil exporters and logistics/processing firms leveraging regulatory tailwinds.

1. Export-Oriented Processors: Companies like TASA and COPEINCA, which operate state-of-the-art processing plants, stand to benefit from rising fishmeal demand. Their vertical integration—from catch to export—minimizes supply chain risks and maximizes margins.

2. Sustainable Fisheries Infrastructure: The government's crackdown on IUU fishing—via satellite tracking mandates and military patrols—has streamlined the sector, reducing waste and boosting transparency. Investors could target firms offering sustainable cold storage facilities or traceability software for export compliance.

Risks: El Niño and Squid Sector Volatility

The sector's Achilles' heel lies in its vulnerability to climate cycles and species-specific risks:

• El Niño Threat: Rising sea temperatures could collapse anchovy biomass, as seen in 2023. The Peruvian Sea Institute (Imarpe) forecasts a 30% probability of El Niño conditions by late 2025, which could reduce anchovy catches by up to 50%.
• Squid Sector Fragility: While anchovy thrives, the squid fishery—a secondary GDP contributor—has faltered. 2025 squid landings dropped 70% compared to 2024's record harvest, with prices spiking to PEN 24/kg due to scarcity. Over-reliance on squid exposes firms like Maruha Nichiro to volatility.

Investment Strategy: Go Long on Anchovy, Diversify with Squid Alternatives

• Buy Anchovy Plays: Overweight processors with strong export channels (e.g., TASA, COPEINCA). Their P/E ratios of 12–15x are undervalued versus global peers trading at 20x+.
• Short-Term Caution on Squid: Avoid pure-play squid exporters until biomass recovers. Instead, pivot to jack mackerel or Pacific chub mackerel-focused firms, which saw 6,036% and 268% landings growth in Q1 2025, respectively.
• Hedge Climate Risks: Invest in weather derivatives or diversified seafood portfolios (e.g., firms with shrimp or tuna operations).

Conclusion: A Blue Economy Bet with Caveats

Peru's fishing sector offers a compelling high-risk, high-reward opportunity for investors willing to navigate climate and regulatory complexity. Anchovy-driven growth, buoyed by Chinese-US demand and sustainable practices, positions the sector for 5–7% annual GDP contributions through 2026. However, investors must monitor El Niño forecasts and squid biomass trends closely. For the bold, this is a chance to capitalize on a $3 billion+ export industry at a critical inflection point—provided one stays anchored in the data and prepared for the waves ahead.