AMINO REPORT

October 2019

Indication Prices

(average cost and freight to Durban)

L-Lysine HCI

ZAR 16,20

L-Lysine sulphate

ZAR 10,16

L-Methionine

ZAR 30,07

L-Threonine

ZAR 16,01

L-Tryptophan

ZAR 86,28

L-Valine

ZAR 43,97

L-Arginine

ZAR 101,89

Headlines

China and South East Asia

  • The Philippine hog industry is losing nearly USD 20 million a month from African swine fever (ASF) infections, agricultural officials said after announcing the virus has also been detected in some processed pork products. The highly contagious pig disease is quickly spreading in the Philippines, pushing up prices of other meat products such as chicken. The government reported the country’s first outbreak in September. More than 60 000 pigs have since either died because of the disease or been culled. That is less than 1% of the country’s herd estimated at 12,7 million pigs as of July. African swine fever has spread to two more provinces in the Philippines, the world’s 10th-largest pork consumer. Cases of infections were detected in some areas in Cavite, south of the nation’s capital Manila, and in Nueva Ecija on Luzon island. The Philippines’ Department of Agriculture has threatened legal action against hog traders ignoring strict animal quarantine rules.
  • Two additional cases of ASF have been reported in South Korea at pig farms in Paju, a town near its border with North Korea. The source of the contamination is not yet known, however South Korean troops have been armed to stop diseased pigs stumbling and swimming across from North Korea. Officials set traps, inspected 160 miles of border fence and raised the reward for finding a dead boar. The efforts did not stop the virus. So far 145 000 pigs had been culled since South Korea reported its first ASF case last month.
  • The culling of nearly 20% of Vietnam’s pig herd will reduce the south-east Asian country’s demand for imported oilseed. Forecasts for soybean imports in 2019 have been reduced to 1,8 million tonnes, below official forecasts of 2,4 million tonnes. Soybean imports had been growing at around 5% annually before the spread of ASF.
  • Surging pork prices pushed China’s consumer inflation to a near six-year high in September, complicating Beijing’s effort to stimulate growth but also giving them a strong incentive to buy more agricultural goods from the United States (US). The consumer-price index rose to 3% in September from a year earlier, and up from 2,8% in August, according to data released by the National Bureau of Statistics. Beijing’s inflation target is around 3% this year. China’s pig herd in September was 41,1% smaller than it was a year earlier. The number of sows in China fell by 38,9% in September, after the deadly disease spread to every province in the country. The declines last month were larger than in August when the pig herd shrank by 38,7% and sow numbers fell 37,4%. In response to falling production, pork imports in September surged 76% from a year earlier while beef imports came close to a monthly record. Pork imports for the first eight months of the year were 1,33 million tonnes, up 43,6% from the same period a year earlier. This brought September imports to
    166 000 t.
  • Beef from the United Kingdom (UK) could be served up on Chinese plates by Christmas after China finalised the details of an export approval agreement between the two countries. In June, Chinese government officials signed a protocol agreement to ship beef from the UK for the first time in 20 years, marking the end of a ban following the bovine spongiform encephalopathy (BSE) outbreak.
    The deal is estimated to be worth around GBP 230 million over the first five years. Four sites have been cleared to export beef in the first instance, with shipments expected to arrive by the end of the year.
  • China has reported that maize consumption in 2018/2019 came in lower than expected after ASF slashed the country’s pig and sow herd, coupled with poultry and hog output expansion not growing as strongly as initially anticipated. Maize consumption for feed for 2018/2019 is now seen at 171 million tonnes, down 3 million tonnes from last month’s forecast. According to official data released early last month, China’s pig herd fell by 38,7% in August, versus a year ago, marking another record drop as the impact of a year-long African swine fever epidemic continues to emerge. China has also lowered its estimate for maize consumption for industrial use for the year to 81 million tonnes, down 3,5 million tonnes from last month’s forecast, as newly added production capacity at some maize processing plants did not go online as scheduled. China’s soybean imports for 2018/2019 were seen at 83,1 million tonnes, down 400 000 t from the previous forecast.
  • China has issued major Chinese and international soybean crushers with tariff-free quota to import soybeans from the United States. The quota to import US soybeans was issued to state-owned crushers, privately owned crushers and major international trading houses with crushing plants in China. A total of 10 million tonnes was issued at the meeting. China will also boost imports of certain goods (including agricultural, consumer and components products) as part of its efforts to stabilise foreign trade. The Chinese State Council also decided to improve its policies on tax rebates, trade finance and insurance, and ease restrictions for capital account transactions as part of its efforts.

Headlines

Europe

  • British farmers are racing to ship this year’s abundant harvest out of the UK by 31 October, when Brexit could pull the country out of the world’s biggest free-trade zone overnight. Leaving the European Union (EU) without a deal—as Prime Minister Boris Johnson has pledged to do at the end of October if the bloc doesn’t meet certain demands—would hit British agricultural exports with customs duties, extra paperwork and checks on animal and plant health. Although the UK is heavily dependent on food imports from overseas, producing less than two thirds of what it eats every year, the country still sold GBP 22 billion (USD 27 billion) of food, drink and animal feed overseas in 2018.
    The UK has secured approval to continue exporting animals and animal products to the EU if they leave without a deal on 31 October, providing certainty for a market worth more than GBP 5 billion a year
  • Dutch health authorities ordered a major recall of processed meats from grocery stores after having linked a spike of food poisonings over the past two years to a likely single source. Experts had been testing the deoxyribonucleic acid (DNA) of listeria bacteria involved in cases that affected 20 people in all, killing three of them and causing one woman to miscarry.
  • Thousands of Dutch farmers on tractors blocked traffic in and around Utrecht and The Hague in protest to what they say are attempts to blame them for nitrogen pollution. More than 375 km of roads were blocked.
  • Drought across most Ukrainian regions is likely to reduce the area sown in the 2020 winter grain harvest. Ukraine and Russia (Ukraine’s main rival in Black Sea grain exports) are both looking for more rains this autumn. In Russia, warm and rainy weather has sped up sowing in recent weeks, however the area is still expected to be smaller. Ukraine Agriculture has said farms have sown around 6,4 million hectares of winter grains as of 21 October versus about 6,8 million at the same date in 2018. Russian farmers have sowed winter grains for next year’s crop on 99,9% of the originally planned area, or 17,5 million hectares, compared with 17,3 million hectares at the same date a year ago.

Headlines

The Americas

  • California state has been sued by the largest US trade group for meat packers and processors, which wants to block enforcement of a voter-approved measure requiring farmers to provide more space for animals being raised for food. The North American Meat Institute, whose members include processors such as Tyson Foods Inc. and retailers including Walmart, said enforcing Proposition 12 would hurt producers and consumers by significantly increasing their costs. It also said the measure, which passed last November with 63% of the vote, was an “overreach” that violated the US Constitution’s Commerce Clause by requiring out-of-state producers to comply with California’s rules or face a sales ban.
  • United States and Chinese negotiators met in Washington this month to try, once again, to defuse a trade war that has roiled markets and triggered tit-for-tat tariffs on hundreds of billions of goods traded between the world’s largest economies. The meetings come days after the US Department of Commerce blacklisted 28 Chinese companies, and China and the US started reciprocal visa bans. Chinese officials say they have little expectation of significant progress.
  • In the wake of recent mortalities of 2,6 million fish (approximately 5 000 t of biomass) on the Coast of Bays, Newfoundland, Canada, Mowi Canada West has been informed by the Department of Fisheries and Land Resources of Newfoundland and Labrador that 10 licenses out of Mowi Canada West’s 47 licenses in Newfoundland have been temporarily suspended. Mortalities were caused by prolonged high seawater temperatures that created low oxygen conditions. All suspended licenses are related to sites experiencing these mortalities.
  • A bankruptcy court in Paraná state has scheduled an auction to sell two plants belonging to Brazilian soy processor Imcopa International S.A. on 4 December. Imcopa, one of the largest non-genetically modified organism soy crushers in Brazil, said the sale of the plants in the towns of Araucária and Cambé was foreseen in its reorganisation plan approved by creditors in 2017.
  • Brazil is hopeful that China will authorise more local meat exporters before Chinese President Xi Jinping visits Brazil next month, as the South American country seeks to position itself as a major food exporter to the world’s most populous nation.

Headlines

Australasia

  • New Zealand (NZ) beef prices continue to benefit from China’s demand. China is now New Zealand’s largest trading partner for beef and the strong demand from China is underpinning prices at the market and processor level. Given that NZ only supplies a small amount of protein consumed in China there is plenty of upside, but prices for beef are unlikely to lift a great deal further from their current elevated levels as some price resistance is now being encountered. Manufacturing grade imported bull and cow meat is trading at record prices in the US market.

Markets

  • World food prices were stable in September with a fall in sugar prices offset by climbs for vegetable oils and meat. The Food and Agriculture Organization (FAO) food price index, which measures monthly changes for a basket of cereals, oilseeds, dairy products, meat and sugar, averaged 169,9 points last month, unchanged from August. The August figure was previously given as 169,8. The FAO also predicted that cereal production would be slightly less abundant in 2019 than previously expected. The FAO sugar price Index dropped 3,9% from August levels, mainly because of expectations of strong sugar stocks. By contrast, the vegetable oil price Index rose 1,4%, month-on-month, marking its highest level in 13 months, while the meat index rose 0,8%. The cereal price index was barely changed from August. While wheat prices were firmer, maize quotations were down month-on-month because of large export availabilities and rice prices were marginally lower. The FAO lowered its forecast for global cereal production in 2019 by 2,2 million tonnes, pegging world cereal output at 2 706 billion tonnes, still up 2% from 2018 levels. The FAO raised its forecast for world cereal stocks at the close of the 2020 season by 2,4 million tonnes to 850 million tonnes, down 2% from their opening levels.
  • Fitch Solutions Inc. has stated that the continuing outbreaks of ASF will be a defining agribusiness trend for the rest of the year and into 2020 in Asia and globally, along with the protracted US–China trade war. The widening pork supply gap in Asia is putting inflationary pressure on food prices, and China’s meat imports have had to rise in order to meet demand. However, this sees countries outside of China having trouble importing meat, as international prices have risen.
  • The International Grains Council (IGC) has cut its forecast for grain production, as a third year of drought in Australia drags on global wheat output. The intergovernmental organisation reduced its forecast for grain output in the 2019/2020 season to 2 157 billion tonnes, down from 2 159 billion tonnes in its September report. Strong harvests in the European Union and Russia partly offset cuts to the outlook for wheat production in Australia and Argentina. Wheat prices have risen in recent weeks, driven by strong demand in Egypt, the world’s top importer of the grain, and dry weather in Australia. However, the IGC forecasts are unlikely to lead to a further rally in prices, since the organisation also cut its forecast for global grain consumption by 2 million tonnes, to 2 184 billion tonnes.
  • Argentinian farmers are hoping to benefit as China looks to switch protein sources and more meat plants are being cleared for export. Eight more Argentinian beef plants were approved for export, following seven poultry establishments being granted approval. China has also granted approval for the first seven soybean milling plants to export.
    Chinese demand has been the driver behind increased exports of Argentinian beef. Between January and August, almost 500 000 t were exported, with 350 000 t going to China. Previously, only boneless frozen cuts could be exported. While domestic consumption still made up most Argentinian production, even cuts which were traditionally popular in Argentina, such as ribs, were being shipped to China. This year, it is estimated Argentine exports of beef would reach 720 000 t.
  • The Brazilian soybean planted area has been reported at 36,5 million hectares in 2019/2020, up negligibly on the 36,2 million hectares sown for the past crop. Producers are hesitant to invest in expansion as demand from China is expected to remain subdued. Meanwhile, production costs are expected to rise yet again next season, cutting into margins. Production is forecast at 123,5 million tonnes, based on trend yields. Soybean exports are forecast at 75 million tonnes for 2019/2020, while 2018/2019 exports are estimated to be down by 1 million tonnes, to 68 million tonnes.
  • Pork from EU countries are among various goods subject to the 25% tariff levied by the US. The forms of EU pork subject to the tariff include pork sausages, offal, ham, shoulders and preserved products, which includes popular cured products like prosciutto and soppressata. Over 75 000 t of pork under the programme were imported into the US from EU countries in 2018, according to data from the US’s International Trade Commission.
  • The United States Department of Agriculture (USDA) reported more soybean exports to China, the latest in a flurry of buying the world’s top buyer of the oilseed has done ahead of high-level trade negotiations with the United States. The USDA said that exporters reported the sale of 198 000 t of soybeans to China for delivery in the 2019/2020 marketing year that began on 1 September. Another 240 000 t of soybeans were sold for shipment to unknown destinations, which traders have said often refers to China.
  • The USDA has also confirmed net sales of 142 172 t of US pork to China. Chinese firms have already purchased 700 000 t of pork and 700 000 t of sorghum from the United States this year to meet market demand. China, the world’s top agriculture market, has also bought 320 000 t of cotton, 230 000 t of wheat and 20 million tonnes of soybeans from the US. The statements came amid heightened attention on China’s purchases of US farm goods, one of President Donald Trump’s key demands to resolve a months-long trade war between the two nations. Trump has stated that China had agreed to purchase USD 40 billion to USD 50 billion worth of agricultural goods from the US in a first phase of an agreement to end the trade war. China has already brought in 500 000 t of sorghum in the first eight months of the year, almost all from the United States, according to customs data.
  • China is taking steps to support trade and foreign investment. China will allow some foreign firms to conduct domestic equity investment by using their capital, and will allow some banks to make cross-border transfers of bad loans under a pilot scheme. Stabilising trade and foreign investment are part of Beijing’s policies to support the slowing economy that has been hit by a trade war with the United States. China’s economic growth is expected to slow to a near 30-year low of 6,2% this year and cool further to 5,9% in 2020, a Reuters poll showed, even as Beijing steps up policy stimulus.
  • When Beijing announced it was exempting 16 US goods from retaliatory tariffs, Chinese firms were quick to call Proliant Dairy Ingredients in the heart of American farm country. Among the products included in China’s first batch of exemptions last month was whey permeate for animal feed, a dairy by-product sold by the Iowa-based Proliant. While seen as a goodwill gesture ahead of talks to end the US–China trade war, the exemption from a 25% retaliatory tariff imposed last year is also a means for China to get supplies it needs. China also exempted US fish meal from a 25% tariff, another ingredient in piglet diets. The exemptions have increased demand for American products.

Corporate headlines

  • A new poultry plant, reportedly capable of processing 16 000 chickens per hour, is being planned for Singapore. The project, known as the Singapore Poultry Hub, is a joint venture between Mr Tan Chin Long (the controlling shareholder of Boong Poultry Pte Ltd) and four firms involved in the poultry trade, namely Tong Huat Poultry Processing Factory Pte Ltd, Kee Song Holdings Pte Ltd, Sinmah Holdings (S) Pte Ltd, and Tysan Food Pte Ltd. It is estimated that the project will boost processing by 70%.
  • Simmons Prepared Foods has announced that operations are beginning to ramp up as scheduled at its new USD 300 million Benton County poultry production facility. Production began on a small scale at the facility and will steadily increase to reach the first phase of full production in January 2020. Approximately 900 team members are transitioning to the new facility from the Simmons poultry production plant in Decatur. The company expects to increase staffing at the plant to 1 200 team members by January 2020, with the potential to reach up to 2 300 team members in 2022.
  • Looking to enhance its methionine business, Sumitomo Chemical Company Limited has announced that it has discontinued production at the end of September at one of its less efficient Ehime works plants in Japan. The plant in question was built over 50 years ago and is faced with increasing maintenance costs.
  • Nuscience parent Royal Agrifirm Group has announced the strategic partnership and ultimate takeover of Belgian compound feed company Quartes. Quartes makes compound feeds for cattle, pigs, broilers, turkeys, and rabbits, and supplies Belgium, the southern Netherlands, and northern France. The acquisition includes plants in Roeselare, Hasselt and Deinze.
  • Nutrisurance, the pet food and rendering unit of Kemin Industries Inc., has reopened its production facility in Vergeão, Brazil after a USD 6 million expansion and refurbishment campaign. Upgrades to the now 5 000 square-metre facility include a 900% increase in its raw material capacity and a 1 500% increase in its finished goods storage, allowing it to better service customers in Brazil and South America. It is also authorised to ship products to Europe and is currently in the process of getting approval for the US market.
  • The joint venture between Solvay S.A. and Şişecam Chemicals Group to produce sodium bicarbonate in Devnya, Bulgaria will see its capacity expanded by 200 kilo tonnes per year, thanks to the addition of a new production line that is expected to come online by the end of 2020. This new line will produce Bicar®Z, a buffer for animal nutrition, as well as products for other industries such as the treatment of flue gas.
  • The Wenger Group, Inc. (Wenger), announced that it has signed a definitive purchase agreement to acquire the grain and fertiliser operations of Risser Grain Agricultural Commodities. The transaction includes the acquisition of seven grain operating locations, which provide for the storage and processing of millions of tonnes of grain. In addition, Risser’s fertiliser facility and production capacity is one of the largest in Pennsylvania.
  • Nutreco N.V. has acquired South African premix company, Animal Nutrition & Health (ANH), from Kaonne Investments (Pty) Ltd for an undisclosed amount. Nutreco’s managing director has stated that South Africa is the continent’s largest producer and feed market. Closing this deal with Kaonne Investments is part of Nutreco’s strategy to expand their base in Africa. ANH will be integrated into Trouw Nutrition South Africa.
  • Zoetis Inc. announced that Kristin Peck will succeed Juan Ramón Alaix as chief executive officer (CEO), effective 1 January 2020, and join the board of directors, effective immediately. Alaix, who has been CEO of Zoetis since its formation in 2012, has decided to retire as CEO, effective 31 December 2019. He will act as an advisor on the leadership transition through to the end of the 2020.
  • SuperDrob S.A., a Polish poultry company, has announced plans to acquire a food factory from BBP Sp. z o.o. in Goleniów with around 50 employees, where it intends to produce chicken nuggets and strips.
  • JBS USA will remove a growth drug banned by Beijing from its US hog supply, accelerating the competition for pork exports. The meat packer’s move away from the drug ractopamine, a feed additive, shows how companies are manoeuvring to take advantage of an expected shortage in China, the world’s largest pork consumer, due to ASF.
  • California’s Foster Farms has reportedly won a bid to acquire 19 farms previously belonging to former rival poultry producer, Zacky Farms. Foster Farms will pay USD 31 million for the poultry ranches in California, including properties in Apple Valley, Corcoran, Caruthers, Fresno, Helendale, Kerman, Lemoore and Riverdale.
  • Landus Cooperative announced it is mutually parting ways with CEO Milan Kucerak, effective 11 October 2019.
  • Dawn Farms, Europe’s largest dedicated cooked meat ingredients company, announced that it has acquired Haas GmbH, a cooked meats specialist in Nonnweiler-Otzenhausen, Saarland, Germany. The transaction was subject to approval by the Bundeskartellamt, the German Federal Competition Authority
  • One of China’s top pig farming companies imported 906 breeding pigs from Denmark, the first import of live pigs in a year. The animals bought by C.P. Pokphand Co. Ltd, China’s fifth largest pig producer, arrived on a charter flight in August and spent over a month in quarantine in Xiangyang city in central Hubei province.
  • Argentina’s Kofman y Lissarrague SRL recently announced that it has opened a new animal feed plant in the country’s San Luis province. The company said that the new plant will produce both bovine and equine feed. It is understood the facility will initially produce around 600 t of feed a month, with plans to increase production to 1 200 t.
  • Leading Russian premixer MEGAMIX has announced it will be entering the vitamin E market with the launch of a new vitamin E adsorbate feed grade with 60% vitamin E content (Innovit E60 – a new concentrated form of vitamin E in the animal nutrition market), as well as a traditional vitamin E 50% adsorbate (Innovit E50). The company said it will be purchasing vitamin E oil from BASF.
  • After closing a Series A funding round worth USD 14 million, Israeli company Future Meat Technologies now plans to build the world’s first cultured meat production facility in Tel Aviv. The company expects to have the plant up and running by 2020 and to “achieve commercially viable production costs within the next two years”. The company plans to introduce a line of competitively priced hybrid products, made from plant proteins and cultured animal fats, by 2021. It also intends to launch a second line of 100%-cultured meat products by 2022, at a cost of less than USD 10 per pound.
  • Novus International, Inc., today announced that François Fraudeau plans to retire as president and CEO after 28 successful years with the company. Novus’s board of directors has decided to hire a former Novus executive, Dan Meagher, to be the next president and CEO, effective 1 April 2020.
  • ERBER Group announced its purchase of autogenous vaccines and diagnostic services firm IPEVE, which will become part of SANPHAR, the group’s animal health unit.
  • Brazil’s JBS SA has said that its subsidiary Pilgrim’s Pride Corp. concluded the acquisition of Tulip Ltd in the United Kingdom, valued at USD 367 million, with the company seeking to strengthen its position in the market for pork. JBS said Tulip’s acquisition was approved by Pilgrim’s board and funded with cash.
  • Taco Bell Corp. has voluntarily recalled about 2,3 million pounds of seasoned beef from its restaurants and distribution sites after a customer reportedly found a metal shaving in an order of food. Taco Bell, which is a subsidiary of Yum! Brands Inc., said the products were removed from restaurants in 21 states across the eastern mid-west, northern south-east and north-east regions.
  • Indian animal health company Brilliant Bio Pharma Private Limited (BBPPL) is said to be expanding its vaccines offerings and bolstering its presence in segments including feed supplements, according to local press sources. The Hindu Business Line reports that the company is investing USD 18 million to enlarge its production capacity, namely focusing on growing production of the foot-and-mouth disease vaccine by 33% (from 300 to 400 million doses per year) and production of feed supplements and minerals.
  • Cargill Inc. is planning to invest USD 225 million to expand its integrated soybean crush and refined-oils plant in Sidney, Ohio, as it works to meet rising demand for protein and refined oils. The Minneapolis agribusiness giant said the expansion, which it expects to complete in 2022, will increase crush capacity and modernising operations at the Sidney plant.
  • Cargill Inc. is planning to close its Wilson feed mill facility in North Carolina. The facility was built in 1968 and was purchased from Central Soya by Cargill in 1989. About 26 employees work at the plant.
  • Mountaire Farms has opened its Scotland County, North Carolina feed mill. The mill produces
    18 000 t of feed a week through its two lines. It is expected that the mill will employ around 65 people
  • The Australian poultry producer Inghams, issued another profit warning to shareholders at its annual general meeting this week as increasing feed prices continued to affect earnings. Feed remains the company’s largest input cost and continued drought conditions in Australia have driven prices to near historic highs.
  • Georgia-based poultry producer Claxton Poultry has opened a processing plant at the Screven Country Industrial Park in Evans County. It is expected that the plant will employ around 120 people. Claxton Poultry’s current operations include a processing plant, a feed mill and two hatcheries in Georgia. It currently employs around 1 800 people and sells approximately 300 million pounds of chicken to 750 customers in the US.
  • US meat processor Strauss Brands Inc. has said that it is calling off plans to build its new headquarters and a meat processing facility in Milwaukee following resistance from the community. The company had planned to build the 175 000 square-foot facility in Milwaukee’s Century City neighbourhood at a cost of USD 60 million. It would have created 250 jobs and was planned to be fully operational by 2021.
  • This weekend saw the official launch of the Lincoln Premium Poultry plant in Fremont, Nebraska. Once fully operational, the plant will provide over 2 million chickens per week for American retailer Costco Wholesale Corporation, which goes through 90 million of its famed rotisserie chickens annually, not counting other chicken products such as uncooked cuts.
  • Vets Plus Inc., a manufacturer and distributor of animal health and nutrition products, is expanding its pharmaceutical manufacturing facilities and operations in Menomonie. The USD 2,5 million project is expected to create 199 jobs over the next three years. In addition to the 199 jobs expected to be created by Vets Plus, an economic modelling study estimates the project could indirectly generate 352 additional jobs in the region.
  • Pet health and wellness company, Better Choice Company, Inc. announced that it will be adding US holistic pet food brand Halo to its portfolio of products after signing an acquisition agreement for an undisclosed amount.
  • ADM Animal Nutrition, a division of Archer Daniels Midland Company, named Amy McCarthy vice president for pet nutrition. In this role, McCarthy will drive the pet nutrition strategy and work to expand ADM’s product offerings in ingredients, premixes, pet foods and pet treats as well as continue to bolster ADM’s product development capabilities.
  • Last week saw the inauguration of Brazil’s largest pork slaughtering plant with the opening of a facility belonging to Aurora, a vertically integrated food manufacturing cooperative. After investments of around USD 65,9 million the capacity of the facility in the city of Chapeco in the southern state of Santa Catarina doubled to 10 527 head per day. The plant is expected to reach full capacity once the expansion is fully operational in the first half of 2020. It produces 221 different items.
  • Bulgaria’s financial supervision commission has approved animal feed producer Viand’s revised buyout offer for the remaining shares of pork processor Svinecomplex Nikolovo. Viand is looking to acquire the 2,39% of Svinecomplex it does not already own and was forced to revise its offer after previous bids were blocked by the financial regulator. The company is now offering USD 0,52 for each of the remaining 83 796 shares.
  • Turkish premixer Beta Tarim has joined France’s CCPA Groupe and has formed a new entity called CCPA Turkey. CCPA and Beta Tarim have been collaborating for 10 years. Located in Izmir, the company started its activities in 2001 and specialises in the manufacture of premixes and minerals for ruminants and poultry. Founder, Ali Ozbek will continue as general director to lead CCPA Turkey.
  • Major UK pork company Tulip Ltd is reportedly beginning talks about the future of its unprofitable site in Bodmin, Cornwall, one of 12 production facilities Tulip operates within the UK. The site currently employs some 270 people, after having shrunk last year following the loss of a business contract.
  • A Hungarian/Vietnamese joint venture called Viet Avis Food Joint Stock Company has opened a poultry processing plant in the commune of Hoang Quy this week. Representing an investment of USD 13 million, the plant can reportedly slaughter and process 2 500 birds per hour, or around 40 t per day.
  • Shares in Brazilian meat processor JBS S.A. fell more than 4% early on Wednesday after US senators sought to bring a probe into the company’s US acquisitions. Two US senators called on the US treasury on Tuesday to open an investigation into the world’s largest meat processing company due to alleged ties with the Venezuelan government of leftist president, Nicolas Maduro.
  • Brazilian meatpacker BRF S.A. has admitted to bribing food inspectors with bank deposits and health benefits and is cooperating with investigators in the latest phase of a corruption probe. Police said the latest developments were part of the fourth phase of the so-called ‘Weak Flesh’ investigation, regarding some USD 4,56 million in illegal bribes by the company. BRF did not immediately respond to a request for comment. Shares in the company fell 1,5% in Sao Paulo trading.

Research and technology

  • DSM Nutritional Products is scaling up and expecting strong demand from food producers for its feed additive for ruminants, which limits methane emissions by approximately 30%. The project, known as Clean Cow, has launched Bovaer, a product seen to inhibit an enzyme in the cow’s digestion process which normally causes the release of the gas. It is the culmination of a decade-long project at DSM.
  • Seafood giant Thai Union has announced that it will be committing USD 30 million to the launch of a venture fund focused on alternative protein, functional nutrition, and value chain technology. The fund’s first investment has also been announced: Flying Spark, an Israeli company making alternative protein out of Mediterranean fruit fly larvae. Flying Spark’s products appear to be aimed at the human nutrition market.

Charts

Chinese lysine producers continue to limit production in an effort to stimulate prices, however, despite lower supply, prices have at least stabilized despite weak demand. In the European lysine prices remain weak, with little movement in any direction. However, it remains to be seen how the market will react to the implementation of the new re-registrations.

Chinese methionine prices have been supported by limited local production, increased demand from an expanding poultry sector, as well as limited imports due a weaker renminbi. With one major producer set to resume production soon, the current price stability could be undermined in the near future. The European market seems stable, albeit at slightly lower levels for October.

Production cuts implemented in September have only managed to stabilize prices, but slow demand and ample supplies have kept prices at very low levels. This situation is expected to continue for the foreseeable future. In Europe some supplier attempted to offer higher prices, but this strategy seems to have failed. Prices remain under pressure.

Valine prices have remained within a narrow band but have seen slight upward movement. Global demand seems to be improving, and this should support prices over the near term. The same scenario is playing out in Europe with higher price offers into the market.

The efforts to stabilize prices by limiting production in August and September seemed to have payed off. Prices have stabilized in mid-October and have even shown slight increases in the past two weeks. However, excess global production capacity will limit the upside. Prices should remain stable, albeit at a slightly higher level. European prices have not responded to higher price offers yet and remains stable.

For more information

contact Heinrich Jansen van Vuuren
heinrich@chemunique.co.za

This report contains information supplied by and compiled from eFeedLink and Feedinfo.
Detailed reports and references are available on request.

Synthetic amino acids

L-Threonine

Synthetic amino acids

L-Methionine

Synthetic amino acids

L-Arginine

Synthetic amino acids

L-Tryptophan

Synthetic amino acids

L-Lysine

Synthetic amino acids

L-Valine