As the year&rsquo s first anchovy season in Peru  kicks off to an early start, fishmeal sellers out of Peru are holding off on booking too many orders for now in anticipation of a firm market ahead.

A potential high level of small anchovy in the catch could see Peru' s first fishing season hit by several ' mini-bans' on fishing, three large Peruvian producers told  Undercurrent News.

This, combined with uncertainty over  this year' s El Nino effect  and over demand in China, coupled with relatively low inventories in Peru and a moderate fishing quota, mean prices are expected to remain firm if not go up in the coming months, said the exporters.

Prices out of Peru recently settled at around $1,600 &ndash $1,620 per metric ton for super prime fishmeal, a big jump from  $1,450-$1,460 last December.

" We are waiting to see how the fishing goes before selling," said one producer, who said he expected prices to stay at those levels for the coming season.

One producer said they had sent vessels out as soon as the season opened at midnight on Wednesday April 23, but had not caught anything yet.

Research from Peru' s marine institute Imarpe has suggested that the stock will have high levels of juvenile fish, said this supplier. " So maybe we will have a mini-ban during this season. It' s not sure we' ll be able to complete our TAC."

" We have to keep monitoring Peruvian fishing conditions &ndash probably mini bans due to juveniles &ndash as well as weather conditions in China to forecast the next prices. In this very moment, prices are firm," said another exporter.

This exporter said he expects prices to be in the range of $1,600 to $1,700 for this year' s season, FOB Peru, super prime meal.

Prices in Shanghai are now said to be around CNY 10,000 ($1,618) per metric ton, compared to CNY 9,600 last December. Prices in China are up by CNY 100-500 depending on the port and the grade, said  one exporter.

Peru, meanwhile, is said to have pre-sold some 90,000 to 100,000 metric tons of fishmeal from the coming season &mdash representing catches of around 420,000t.  The TAC for the year&rsquo s first season was set at 2.5 million tons.

Although there is room to book more, the sellers said they are not in a hurry to seal orders right now, and buyers are also waiting to have a better overview of demand in China.

" The market hasn&rsquo t reached an equilibrium," said one. " It' s hard to say at what level prices will stabilize, it will depend on the catch and  if  the weather and aquaculture season is good in China.  But I don' t think prices will go down."

" If the El Nino hits hard, this season' s 2.5m tons is all we&rsquo ll have to sell," he added.

The demand in China, the biggest fishmeal market, will be a key factor. Last year, a poor aquaculture season sent Chinese demand plummeting and prices dropping &mdash albeit from very high levels &ndash   in the second half of the year.

According to the Peruvian producers canvassed by  Undercurrent,  demand in China is looking firm at the moment, but weather conditions are still uncertain.

" In  the south the weather is good, farmers are foreseeing a good demand from aquaculture, as long as there are no sudden big rains for a long time," said one exporter, commenting on China. On the other hand, he said, " the pig situation is still very bad."

China is reporting to have some 253,000t in inventories, he added. " Off-takes are good, mainly because users were scared and filled their warehouses with current stocks due to expect poor fishing in Peru."

The fishing situation in Peru will become clearer in the next few days,  while the situation in China will become clearer by May/ June.

" We have to wait until weather conditions improve in China in the next weeks to see the real demand," said one producer. " Chinese buyers are waiting for weather conditions to  improve to see the real demand, they also are not in a rush to buy due to the current stock as well as the pending arrivals coming to Chinese ports. The real demand would come during June."