Amino Report

March 2021

A lot has happened since the last amino report was published last year. Amino acid prices have increased dramatically, global supply chains are strained, the COVID-19 pandemic is continuing while vaccine rollouts are faltering, and international geopolitical tensions are still disrupting international trade flows.

Let us pause for a moment and analyse the reasons for the high amino prices we are experiencing.

In other news

The Ever Given blocked the Suez Canal

The Ever Given, a 224 000 t, 400 m long container ship recently blocked the Suez Canal after running aground sideways. According to some sources, an estimated 200 vessels (carrying grain, oil, liquefied natural gas, and containers) backed up on both sides of the canal. The huge ship was apparently driven sideways by strong winds plaguing the area for days before the ship ran aground. Recent reports, however, suggest that human error could be to blame. The Suez Canal carries around 10–12% of global shipping, and an estimated USD 9 billion (ZAR 135 billion) worth of goods are transported via the waterway daily.

The Chinese government unveiled its 14th five-year plan

During its most recent National Congress Meeting, the Chinese government unveiled its 14th five-year plan. In keeping with the environmental focus of recent years, the plan states that a sharp reduction in energy consumption and carbon dioxide emissions in heavy and intensive industries must be achieved by 2025. This includes all vitamin and amino acid producers. While production costs will most certainly increase, some of the measures will also force producers to limit production by increasing energy prices for energy-intensive industries and industries with excess capacity. This will have a direct impact on all feed additive producers in the short term but will also stunt future capacity expansions.

Novus filed an anti-dumping duty petition

In late July 2020, Novus filed an anti-dumping duty petition with the United States (US) Department of Commerce (DoC) against competing French, Spanish, and Japanese methionine suppliers to the US market. The reason given was the steep increase in imports, which more than doubled between 2017 and 2020. In February of this year, the DoC released its preliminary findings. They found that the case had merit and suggested anti-dumping duties on methionine produced by companies in France (43.82%), Spain (31.98%), and Japan (135.1%). The final determinations from the DoC are expected by early May.

The Chinese swine herd seems to be recovering

The Chinese swine herd seems to be recovering well after ASF wiped out nearly half the herd with continuous outbreaks over the past two and a half years. New farms and processing plants have been constructed, and thousands of breeding animals have been imported from Europe to replenish breeding stock. The groundbreaking ceremony of the latest mega-farm was held in March in Gansu Province. East Hope started construction of a CNY 780 million (ZAR 1.8 billion) breeding and growing facility, with a planned capacity of 1 million hogs per year. The facility boasts the latest in bio-security systems, as well as sophisticated waste recycling systems to minimise environmental pollution. ASF is still present in China, and a number of outbreaks have been reported in recent months. Although these outbreaks will hamper efforts to increase pork output, valuable lessons have been learned. It would be naïve to expect a repeat of the enormous devastation caused by the previous outbreak; however, it may still have a serious impact on pork production.

Graphs

Protein supplement

courtesy of JVD Commodities (Pty) Ltd

Protein prices in South Africa have started to pull back off the record highs seen in the last few months. This is attributed to various factors, including:

  • The gradual strengthening of the rand against the US dollar.
  • A drop in Chicago soya meal prices after reaching seven-year highs.
  • A resumption of local crushing activity, following maintenance over the festive season and the first quarter of 2021.
  • A reduction in the premium of local meal, as more crushers return to production.
  • The availability of beans and seed, as South Africa enters its 2020–2021 harvesting season.

Sunflower oil cake monthly price change

Delivery month

Previous month average (ZAR)

Current month average (ZAR)

Change (ZAR)

Mar-21

7 000.00

6 300.00

−700.00

Apr-21

7 000.00

6 300.00

−700.00

May-21

6 500.00

6 050.00

−450.00

Jun-21

5 800.00

5 553.00

−247.00

Jul-21

5 850.00

5 538.00

−312.00

Aug-21

5 900.00

5 536.00

−364.00

Sep-21

5 900.00

5 582.00

−318.00

Soybean meal monthly price change

Delivery month

Previous month average (ZAR)

Current month average (ZAR)

Change (ZAR)

Mar-21

8 525.00

7 736.00

−789.00

Apr-21

8 336.00

7 772.00

−564.00

May-21

8 306.00

7 832.00

−474.00

Jun-21

8 337.00

7 925.00

−412.00

Jul-21

8 311.00

7 940.00

−371.00

Aug-21

8 359.00

7 954.00

−405.00

Sep-21

8 179.00

7 990.00

−189.00

Monthly soybean meal chart

source: tradingview.com

Shipping update

source: containernews.com

As discussed earlier in this report, international containerised freight rates reached multi-year highs in late 2020, driven by consecutive global lockdowns, container shortages, and disrupted trade flows. This trend is set to continue for the foreseeable future. Pressure on container supplies have been lifted somewhat in recent weeks, though, promoting a softening in freight rates. The recent blockage of the Suez Canal by the Ever Given has also impacted freight rates in the short term; however, if the crisis had lasted as long as expected, it could have been much worse. Fortunately, the ship was refloated within days, but the congestion caused will take time to clear up.

Chemuniqué News

by Jackie Tucker, commercial executive

Jackie Tucker

Commercial executive

Chemuniqué was founded almost 25 years ago, with the vision of delivering innovative nutritional technologies that enhance animal production in sub-Saharan Africa. Together with strong international and local partnerships and our ‘Category of One’ product portfolio, the passionate people in the Chemuniqué team assist in providing customers with measurable economic benefits, supported by local research and development and value-added services.

The Chemuniqué team dedicate their efforts to developing robust, trust-built relationships with our customers and partners, to proudly serve the animal production industry and play a role in sustainability with the utmost scientific credibility, responsibility, and integrity.

Some of the most important team members work their magic behind the scenes and we would, therefore, like to introduce you to our support team, who diligently fulfil all your logistical and financial requirements. We salute their efforts daily and are greatly appreciative of their enthusiasm and support!

Logistics team

André Rossouw
Logistics manager

Machete Seopa
Sales & distribution

Lebo Modise
Logistics administrator

Michelle Geldenhuys
Logistics administrator

William Milazi
Logistics assistant

Finance team

Ahmed Sheik
Financial manager

Juliette Biljon
Accountant

Sonja Swanepoel
Financial administrator

Tiyani Marilele
Creditors clerk

Zama Ndaba
Cost accountant

The amino acid encyclopaedia

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 which feature in the encyclopaedia may be relevant to subsequent issues of the amino report.

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

In Focus

Arginine

This technical update aims to cover some of the important metabolic roles of arginine, such as in the immune system, circulatory system, and tissue systems. Arginine is an essential amino acid that forms part of several proteins. Unlike other mammals, chickens and aquaculture are unable to produce arginine within their bodies as they do not possess the enzymes to do so. Arginine must therefore be present in their diets for them to produce other biologically important compounds such as creatine, polyamines, and nitric oxide (Bortoluzzi et al., 2018).

Conclusion

Highlighting the important metabolic roles of arginine makes it clear that several benefits can be achieved when animals are supplemented with optimum levels of arginine in their diets.

References

Bortoluzzi, C., Rochell, S.J., Applegate, J., 2018. Threonine, arginine, and glutamine: Influences on intestinal physiology, immunology, and microbiology in broilers. Poultry Science, 97(3), pp.937–945. doi: 10.3382/ps/pex394

Castro, F.L.S., Su, S., Choi, H., Koo, E. and Kim, W.K., 2019. L-Arginine supplementation enhances growth performance, lean muscle, and bone density but not fat in broiler chickens. Poultry Science, 98(4), pp.1716–1722. doi: 10.3382/ps/pey504

Khajali, F. and Wideman, R.F., 2010. Dietary arginine: metabolic, environmental, immunological and physiological interrelationships. World’s Poultry Science Journal, 66(4), pp.751–766. doi: 10.1017/S0043933910000711

Mateo, R.D., Wu, G., Moon, H.K., Carroll, J.A. and Kim, S.W., 2008. Effects of dietary arginine supplementation during gestation and lactation on the performance of lactating primiparous sows and nursing piglets. Journal of Animal Science, 86(4), pp.827–835. doi: doi.org/10.2527/jas.2007-0371

Mou, Q., Yang, H.S., Yin, Y.L. and Huang, P.F., 2019. Amino acids influencing intestinal development and health of the piglets. Animals, 9(6), p.302. doi: 10.3390/ani9060302

Wu, G., Bazer, F.W., Dai, Z., Li, D., Wang, J. and Wu, Z., 2014. Amino acid nutrition in animals: protein synthesis and beyond. Annual Review of Animal Biosciences, 2(1), pp.387–417.

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