Amino report – August 2021
Chinese prices on the rise
Amino acid prices out of China seem to have reached a turning point. Over the past three months, prices have come off the highs seen in the first half of this year; a welcome reprieve as this coincided with the relatively weaker rand, which minimised the impact to an extent. However, tough times are expected to return as the end of the year approaches.
In other news
Meatco slaughter numbers
Namibia’s Meatco recorded its lowest cattle slaughter number in decades. The company only managed to slaughter 36 074 head of cattle in the 2020–2021 financial year. This is in sharp contrast to the previous year in which a record 116 304 were slaughtered when farmers were forced to reduce herd numbers due to a severe drought. The low slaughter number can be attributed to two main causes. Firstly, as the rains returned, farmers held young animals back to rebuild their herds. Secondly, competition with South African feedlots intensified as a result and more than 150 000 live weaners were exported to South African feedlots that were offering better prices to beef farmers.
Brazilian drought drags Argentine exports
Three years of drought in southern Brazil, the source of the Parana River, has caused such low levels that it is impacting shipping from the Argentine port of Rosario. Ships are carrying up to 25% less cargo to decrease draught depth, and this is increasing shipping costs. Grains are also trucked to other ports, mostly Bahia Blanca, for shipment, adding to the cost of exports. According to meteorologists, the drought in southern Brazil could continue into next year, as below-average rainfall is expected again. The drought has been described as a “once in a century” event. Brazil’s main hydropower reservoirs have also been affected, with growing fears of electricity shortages in the country.
Argentina’s Parana problem
The Peronist Argentine government has responded to the Parana River crisis by establishing a new government agency to oversee the dredging of the river, including the port at Rosario, to the Rio de la Plata, where the river flows into the Atlantic. The agency is tasked with setting the basic conditions and requirements, issuing tenders, and collecting tolls on behalf of the dredging company. The move has been criticised by the private sector as another attempt by the state to intervene even further in agriculture. While exporters and farmers are concerned about increased bureaucratic inefficiencies and costs, the government insists that it could bring costs down, since the tolls will be determined as part of the bidding process. The dredging has been done by a Dutch company, Jan de Nul, since the mid-90s.