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.
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.