Amino report – June 2021

Freight rates: Still, they rise!

Global freight rates keep rising at an alarming rate, and there seems to be no end in sight … and yes, it is the fault of COVID-19.

In other news

Adisseo to withdraw from the US market

In the wake of the US International Trade Commission’s findings against Adisseo and Sumitomo Chemical Asia for dumping DL-methionine, the former has announced its withdrawal from the US DL-methionine market. Addisseo produces DL-methionine at two plants in France, and a methionine hydroxy analogue in Spain and China. In late July 2020, Novus filed an anti-dumping duty petition with the US Department of Commerce (DoC) against competing French, Spanish, and Japanese methionine suppliers to the US market. In February of this year, the DoC released its preliminary findings and suggested anti-dumping duties on methionine produced by Adisseo in France (43,82%), Spain (31,98%), and Japan (135,1%). Final determinations for Spanish and Japanese origin methionine sources are expected in August.

EU finalises farm subsidies

After more than three years of negotiations, the European Union (EU) has finalised the terms of the Common Agricultural Policy (CAP). The CAP attempts to move some funding away from intensive farming and toward environmentally friendly and sustainable agricultural practices. Under the new CAP, member states must ensure that at least 20% of all payments to farmers are used for so-called eco-schemes, while at least 10% must go to small farms. All payments will also be subject to farmers’ adherence to existing environmental rules. The new agreement also creates an emergency fund of EUR 450 million (ZAR 7,6 billion) in case of serious disruptions to agriculture, such as the current pandemic. The EU has allocated around EUR 387 billion (ZAR 6,5 trillion) to the new CAP until 2027, almost a third of the EU budget.

Plunging pork

Global pork prices have declined in recent weeks, after the Chinese government announced that they have replenished the national swine herd to early 2018 levels, before African swine fever (ASF) swept through the country and devastated pork production. In anticipation of much slower demand from China US hog futures dropped by 17% in late June, while various cut-outs followed the same pattern. Live hog prices in China have been declining steadily since January, as domestic production recovered, and dropped to the lowest levels since 2013. However, it has rebounded somewhat as the number of hogs sent to slaughter tapered off after farmers flooded the market with hogs when prices were falling. German pork prices also declined in recent weeks, however the German Farmers’ Union (Deutscher Bauernverband, or DBV), are hopeful that prices will rebound as the football season, and the summer, finally gets going.

Price Graphs

Estimated replacement prices, CFR Durban

Protein supplement

courtesy of JVD Commodities (Pty) Ltd

Protein prices in South Africa have started to stabilise in June, following the all-time high prices of the past six to eight months. A number of factors contributed to a dampening of prices, giving much needed respite to feed manufacturers.

The South African rand (ZAR) strengthened against the US dollar (USD) in June and, coupled with a fairly sharp drop in Chicago Board of Trade soybean meal futures after the US supreme court ruled that small refineries can apply for an exemption on blending biofuels into their products, allowed prices to drift lower. The prospects for a bigger new season US soybean crop, thanks to better than expected acreage and favourable weather, also weighed on international prices.

In a local context, the market is flush with sunflower and soybeans as the harvest season comes to an end. Naturally, with good crush margins, crushers do not want meal to bottleneck the system and local meal is offered at discount rates to clear inventories.

Soybean meal month average

Delivery month

Previous month

Current month

Change

Jun-21

ZAR 7 286,00

ZAR 7 255,00

−ZAR 31,00

Jul-21

ZAR 7 314,00

ZAR 7 286,00

−ZAR 28,00

Aug-21

ZAR 7 486,00

ZAR 7 314,00

−ZAR 172,00

Sep-21

ZAR 7 578,00

ZAR 7 486,00

−ZAR 92,00

Oct-21

ZAR 7 611,00

ZAR 7 578,00

−ZAR 33,00

Nov-21

ZAR 7 679,00

ZAR 7 611,00

−ZAR 68,00

Dec-21

ZAR 7 731,00

ZAR 7 679,00

−ZAR 52,00

Jan-22

 

ZAR 7 731,00

 

Sunflower oilcake month average

Delivery month

Previous month

Current month

Change

Jun-21

ZAR 5 050,00

ZAR 4 800,00

−ZAR 250,00

Jul-21

ZAR 5 050,00

ZAR 4 800,00

−ZAR 250,00

Aug-21

ZAR 5 050,00

ZAR 4 900,00

−ZAR 150,00

Sep-21

ZAR 5 050,00

ZAR 4 900,00

−ZAR 150,00

Oct-21

ZAR 5 150,00

ZAR 5 300,00

ZAR 150,00

Nov-21

ZAR 5 448,00

ZAR 5 350,00

−ZAR 98,00

Dec-21

ZAR 5 513,00

ZAR 5 450,00

−ZAR 63,00

Jan-21

ZAR 5 563,00

ZAR R5 500,00

−ZAR 63,00

CBOT Corn, July 2021

source: tradingview.com

CBOT Soybean, July 2021

source: tradingview.com

CBOT Soybean meal, July 2021

source: tradingview.com

CBOT Soybean oil, July 2021

source: tradingview.com

Shipping Update

Global shipping still in stormy waters

Shipping difficulties have become part of the much dreaded new normal, and a recent report illustrated this with extreme clarity. In the first five months of 2021, 695 vessels were more than a week late at destination ports, with 132 vessels delayed by more than 21 days. Between 2012 and 2020, the same number is only 1 535, or 192 per year, with only two vessels more than 21 days late. This is a staggering increase of 724%. No doubt, shipping delays and high shipping costs will remain with us for the foreseeable future, and every procurement manager should keep this in mind.

The amino acid encyclopaedia

by Ashley Grimsell

The amino acid encyclopaedia will contain new terms with each report, providing more information about these terms that appear in the technical update and that may be of interest to you, our reader. The terms that feature in the encyclopaedia may also be relevant to subsequent issues of the amino report.

We will be back next month with some more additions to our amino acid encyclopaedia!

In Focus

by Ashley Grimsell

Isoleucine

In this issue, we focus our attention on an amino acid that does not pop up frequently in conversations, but one that still plays a role in livestock production.

Research is limited on the amino acid isoleucine, but may become of greater importance as commercially available forms of this amino acid have been introduced to the feed production market.

Conclusion

Further research is essential regarding isoleucine supplementation in monogastric diets. This need will further increase as the human population continues to grow, with increased demand for animal protein and feed costs rise.

References

Baker, D.H., 2009. Advances in protein–amino acid nutrition of poultry. Amino acids, 37(1), pp.29–41. 

Dong, X.Y., Azzam, M.M.M. & Zou, X.T., 2016. Effects of dietary L-isoleucine on laying performance and immunomodulation of laying hens. Poultry science, 95(10), pp.2297–2305. 

McDonald, P., Edwards, R.A., Greenhalgh, J.F.D., Morgan, C.A., Sinclair, L.A. & Wilkinson, R.G. 2011. Animal Nutrition 7th ed. Pearson United Kingdom, Harlow, England. [Book].

Miranda, D.J.A., Vieira, S.L., Favero, A., Angel, C.R., Stefanello, C. & Nogueira, E.T., 2015. Performance and meat production of broiler chickens fed diets formulated at different crude protein levels supplemented or not with L-valine and L-isoleucine. Animal Feed Science and Technology, 206, pp.39–47. 

Van Milgen, J., Gloaguen, M., Le Floc’h, N., Brossard, L., Primot, Y. & Corrent, E., 2012. Meta-analysis of the response of growing pigs to the isoleucine concentration in the diet. Animal, 6(10), pp.1601–1608. 

In addition to the above references, this document also contains information from the following sources: