Japan is now the fourth largest investor in Latin
America, ranking after the United States, West Ger-
many and Britain. In trade volume with Latin America,
Japan ranks third, having surpassed Britain. Japan-
ese penetration of the Latin American economy is
particularly apparent in Peru, where the Japanese
are beginning to compete with the Americans for con-
trol of key ectors of the Peruvian economy -- mining
and fishmeal.
U.S. companies, it is estimated, now control
95 percent of the Peruvian mining industry. These
companies include such corporate giants as Cerro
Corp. (and its subsidiary, Cerro de Pasco), American
Smelting and Refining Co., Marcona (a subsidiary of
Cyprus Mines and Utah Mining and Construction),
Phelps Dodge, and Anaconda.
Japanese mining companies, however, are beginning
to make important inroads. Minas de Chapi del Peru,
a copper mine, is owned by Mitsui Mining and Smelt-
ing, Nippon Mining, Toho Zinc, and the Overseas
Mineral Resources Development Co. Due to additional
investment by Mitsui, the facilities were expanded
during 1968-69. Mitsui has also purchased the Sta.
Luisa Co. of Peru and is mining zinc and lead. The
Toho Zinc Co. has been negotiating with Peruvian
businessmen for the opportunity to jointly develop
the Gran Bretana zinc mine.
Japan also purchases a major portion of the
minerals mined in Peru by U.S. companies. For ex-
ample, over half of Peru's iron ore is sold to
Japan. Peru's main iron mining operation is owned
by Marcona Mining (a subsidiary of Cyprus and Utah
Mining and Construction), which ships the ore to
the Kawasaki Steel and Nisshin Steel Companies in
ships built in the Kawasaki Ship-Building Company's
yards.
Japanese investors have also established a
stake in the Peruvian fishmeal industry. In 1962,
Peru displaced Japan as the world's leading fish-
ing nation. Originally, Peruvian fishing and
fishmeal companies were indigenously controlled
operations. But as this industry became more prof-
itable, and as competition and inefficiency began
to take their toll among the more marginal opera-
tions, foreign capital and technicians began to
move in. Of the twenty-six largest fishmeal pro-
ducers, eight are controlled by U.S. interests and
one by Japanese (Taiyo Fishing). In terms of
production, foreign-owned companies are expected
to account for 40 percent of the 1969 total.
The result of foreign control over Peruvian
fiShmeal companies is that almost all that almost all
that Peru produces is exported--with a large share
going to the United States and Japan--rather than
consumed domestically. Thus, while Peruvians suffer
protein deficiency, the high-protein fishmeal
produced in their country is sent abroad to feed the
livestock of major industrial nations (note that the
reprint following this piece indicates Peru's fish-
meal exports are the leading competitor for U.S. soy-
bean meal exports in feed). This pattern, typical
of trade relations between the developed and under-
developing countries, is evident in the following
chart which compares the amounts of fishmeal con-
sumed domestically with the amount produced in the
two countries, Peru and Japan.
Fishmeal Production and Consumption (in tons)
Peru
Pro-
duction
1966 1,470,500
1967 1,550,000
1968 1,992,000
Japan
Consump-
tion
28,000
35,000
47,424
Pro- Consump-
duction tion
285,000 363,000
330,000 432,000
280,000 420,000
Source: The Peruvian Times, March, 1969.
Japan has not neglected the manufacturing sector
eitner; n fact, Japanese consumer goods seem to be
growing in popularity in Peru. There are now assem-
bly plants for Nissan and Isuzu Motors, Toyota Com-
pany, Honda and Suzuki motorcycles, and Nivico
products. Two Japanese companies, Marubeni Iida and
Japan Gasoline, built the state-owned refinery at
La Pampilla, and the Nippon Electric Company built
the Lurin satellite communication center. This
latter contract was awarded to Nippon Electric
after an agreement with a U.S. company was voided
by the Peruvian government for undisclosed reasons.
*For background on the current situation in Peru,
see NACLA Newsletter, Vol. III, Nos. 5 and 6 (Sep-
tember and October, 1969).
Sin soltar prenda15
Peru's Output, Export of Fishmeal
In 1969 fishmeal supplies in Peru-the world's major sup- plier and the leading competitor for U.S. exports of soybean meal-declined by 519,700 metric tons, equivalent to the crude protein content of 35.9 million bushels of soybeans. The decline resulted in a sharp increase in prices and exports fell by 427,600 tons-the equivalent of 29.5 million bushels of soybeans. Peruvian supplies and exports in 1969 amounted to 2.0 million and 1.7 million tons, respectively. Interestingly, in calendar 1969, 257,700 tons or 83 percent of the decline in production and 389,600 tons or 91 percent of the decline in exports occurred in the last 4 months of the year. This decline coincided with the early part of the 1969-
70 fishing season, which began September 1, 1969; it reflects
the reduced catches of anchovy.
Stocks during calendar 1969 dwindled from a high of
over 490,000 tons on May 1 to less than 50,000 tons on
September 1.
In 1969, average monthly prices for Peruvian fishmeal,
c.i.f. European ports, rose sharply from a low of about $137
per ton in January to a high of nearly $228 per ton in No-
vember. The annual average price at $177 per ton in 1969
was markedly above the $134 average for 1968 and was the
highest since 1966.
Prices have declined significantly since January 1970, as
a result of more favorable catch results and some buildup in
stocks. As of March 5, prices were quoted at $175 per ton.
Virtually all of Peru's fishmeal is produced from an-
chovies, which are subject to seasonal catch limitations. The
1969-70 fishing season catch limit is currently set at 8.5
million metric tons compared with last season's catch of 10.0
million tons.
If achieved, this could result in an output of 1.6 million
tons of meal (see "Peruvian Fishmeal Situation," p. 14,
Foreign Agriculture, Feb. 9, 1970).
Exports to the United States and Canada declined by 361,-
400 tons in 1969-the crude protein equivalent of 25.0 mil-
lion bushels of soybeans. This decline, together with reduced
exports to other Western Hemisphere destinations, accounted
for 96 percent of the total decline.
Exports to Europe totaled 1.25 million tons in 1969,
slightly above those in 1968. West Germany emerged as the
largest single country market in 1969, accounting for 384,200
tons or over 23 percent of all Peruvian exports, compared
with 396,900 tons or 19 percent in 1968. West German im-
ports of fishmeal are expected to decline significantly this
year. The recent changes in West Germany's mixed feed reg-
ulations will accentuate this import decline.
There are, however, indications that fish meal is considered
to be a vital ingredient in some poultry rations despite its
extremely high price relative to other meals.
Reprinted from U.S. Dept. of Agriculture,
Foreign Agriculture (Vol. VIII, No. 13)
March 30, 1970, p. 13.
PERU'S FISHMEAL EXPORTS
Area or country of destination 1968 1969
1,000 1,000 metric Per- metric Per- tons cent tons cent United States and Canada 550.9 26.4 189.5 11.4 South America ...... 143.4 6.9 103.7 6.3 West Germany 396.9 19.1 384.2 23.2. Other Western Europe _ 556.0 26.7 595.5 36.0 Eastern Europe ... 278.1 13.3 267.5 16.2 Japan and all others _. 157.9 7.6 115.2 6.9
Total ... ...... 2,083.2 100.0 1,655.6 100.0
Total exports excluding those to the. Western Hemisphere ___............ 1,388.9 66.7 1,362.4 82.3
ESTIMATED SUPPLY AND DISTRIBUTION
OF PERUVIAN FISHMEAL
Item 1965 1966 1967 1968 19691
1,000 1,000 1,000 1,000 1,000
metric metric metric metric metric
tons tons tons tons tons
Stocks, Jan. I __ 260.5 237.4 375.2 600.3 391.7 Production -- 1,282.0 1,470.5 1,816.0 1,921.9 1,610.8
Total supply - 1,542.5 1,707.9 2,191.2 2,522.2 2,002.5
Exports . 1,260.0 1,304.5 1,560.9 2,083.2 1,655.6 Apparent consump- tion m_ 45.1 28.2 30.0 47.3 40.0 Stocks, Dec. 31 - 237.4 375.2 600.3 391.7 306.9
Total distribution 1,542.5 1,707.9 2,191.2 2,522.2 2,002.5
'Preliminary. Sociedad Nacional de Pesqueria and other sources.
OIGA, Lima
