Amino report – May 2021
Global pork production still under pressure
Global pork production is set to be lower than expected this year. Output will still grow; however, a combination of disease, high feed costs, lower efficiencies, and increased imports by China have tempered the expected growth in global production.
In other news
Carbon markets: Opportunity or pie in the sky?
Farming in step with nature is nothing new to most farmers. However, being environmentally friendly and economically sustainable are usually challenging, especially in developing countries where farmers do not have adequate state support or subsidies to implement the (sometimes lofty) ideals of legislation. Recent research around carbon sequestration using farmland has led to new ideas that could allow farmers to be directly compensated for adopting environmentally friendly practices. The concept of carbon credits has been around for a number of years. In the early 2000s, a carbon trading platform operated in the United States, but ultimately failed because prices for carbon credits became too low. That idea has been revisited lately, sparked by research into methane-reducing feed additives. The same principles are applied to livestock farming, which means carbon credits can be earned by reducing methane emissions from cattle and sold to any carbon-positive entity. Of course, challenges exist, such as accurately measuring carbon output from every activity on-farm. Additional questions also arise: What about other greenhouse gases and contaminants, and carbon-neutral practices that have negative environmental effects? What about upstream industries supplying inputs, services, and raw materials. Should that be part of the equation? Given the inherent complexity, practical application may be too difficult right now, but many things are possible today that were considered impossible a couple of decades ago. Nevertheless, it is an intriguing idea for future agriculture.
Argentine exports lumbering ahead despite challenging start to harvest
The Parana River, Argentina’s main waterway for grain and soy exports has dropped to such a low level that ships are loading up to 7 000 t less than usual. The level at Rosario, the largest export hub, has dropped to just 0,90 m, while the long-term average is around 3,6 m. Low rainfall in neighbouring Brazil has caused the water level to drop substantially in the last few weeks and is expected to drop even further in coming weeks, just as the harvest is set to get going. Argentina is expected to harvest 45 million tonnes of soybeans and 50 million tonnes of maize. Adding to the troubles, port workers went on strike in the last week of May in protest over not being considered essential workers and, thus, being entitled to be vaccinated first against COVID-19. According to the unions, port workers are essential to keep the economy afloat and should be eligible for early vaccinations. Agricultural exports are an important source of foreign currency for Argentina and reached nearly USD 10 billion (approximately ZAR 135 billion) in the first four months of the year, thanks to high commodity prices.
USDA confirms anti-dumping duties for French methionine imports
The United States Department of Agriculture (USDA) has announced the final anti-dumping duties to be imposed on French methionine products. All methionine from France will be subject to a duty of 16,17%, except Addisseo’s methionine, which will carry a 43,82% duty. In late July 2020, Novus filed an anti-dumping duty petition with the United States 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 since 2017, 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 in June, with possible implementation by 1 July 2021.
METEX declares force majeure
A leaking hydrochloric acid tank forced Metabolic Explorer (METEX) to halt amino acid production at its plant in Amien, France. Production has been gradually shut down while an assessment is underway, and repairs are expected to commence in early June. It is not known how long the plant will be out of production; however, some sources have indicated it could be up to a month. METEX only recently bought the plant from Ajinomoto Animal Nutrition Europe as part of Ajinomoto’s gradual exit from the commoditised amino acid market. The plant has an estimated production capacity of 100 000 t lysine per year.