A rising global population and rapidly mounting wealth in the developing world is boosting demand for protein, implying higher meat and fish consumption. The latter is also driven by the trend towards healthier eating in western nations. According to the UN, world seafood consumption may jump from 110.7 million to 179 million tonnes by 2015. With fish farming one of the most efficient ways to produce protein, it’s no wonder demand for fish meal is rising by about 7% a year, with prices set to follow.
Enter Oslo-listed Copeinca (COP), which turns anchovies caught off the coast of Peru, where it has an unlimited right to fish, into fish meal and fish oil. The company’s profits should also be helped by a change in the Peruvian quota system allowing companies to fish for 150, rather than 50, days per year, which will lower costs, says Hugh Hendry of the Eclectica Agriculture fund. Also worth a look is Dutch-listed Nutreco (NUO), the market leader in fish feed and a major supplier of animal feed. It expects to double operating profits by 2010. Both SNS Securities and Goldman Sachs deem it a buy.