15 October 2021 - The Indian feed and farming sectors are feeling the impact of the Chinese energy crisis, the CLFMA (Compound Livestock Feed Manufacturers of India) told Feedinfo.
CLFMA said that on top of the higher freight cost, the supply chain disruption caused by the energy crisis has resulted in increased prices for imported Chinese feed additives.
“There is an increase in cost for local farmers related to amino acids, vitamins, and other feed additives”, Mr. Neeraj Kumar Srivastava, chairman at CLFMA, said. “Since the news spread about the energy crisis in China and that many factories are either shut down or have seen their operating levels reduced in recent weeks, all feed additive prices are surging, be it amino acids, vitamins or medicated feed additives. This is in addition to freight costs which have multiplied by four or five, the higher lead times for deliveries, and the recent historical highs seen for soy prices.”
The CLFMA chairman warned that availability of product and high prices will be an issue as most of the world’s amino acids production takes place in China. Another factor to bear in mind is the higher soy prices and the resulting switch by farmers to use more corn instead. This has led to higher usage of amino acids and increased demand for lysine. However, he warned that rainfall damage to the Chinese corn crop in many provinces could in turn affect pricing for many amino acids.
Commenting further, Mr. Srivastava said: “China has four major producers of methionine, and they have been affected by the power crisis. We do not expect any higher quantities [of methionine] available for export out of China. This will lead to low availability in the Asian market.”
“Availability and higher costs for raw materials required to produce essential amino acids are affected due to the power crisis which will further reduce production. At present no manufacturer can offer new quotes in the market and try to support their current contractual volumes,” he added.
Chinese vitamin supply into India is also a victim of raw material availability, CLFMA said.
“Vitamin K3 producers are not offering in the market as the shortage of raw material methylnaphthalene is affecting the supplies deeply. The raw material is produced by 3-4 manufacturers and all are in China. Other countries are also not able to manufacture as getting raw material from China is difficult. The availability is very limited and may worsen in the coming days,” Mr. Srivastava said.
“Due to environmental inspections, vitamin D3 manufacturers are affected in many provinces of China, and there may still be some supply of vitamin A but we are expecting low availability in the coming days”, he added. “And, all the Chinese producers have stopped offering biotin, as this is a high energy-consuming process. Dependency is on European manufacturers today.”
“All betaine plants in China are shutdown or operating with very low output. They may get new power allocations in the coming days, but currently there is no offer from any manufacturer”, Mr. Srivastava went on to say. “Medicated feed additives which depend on China, like maduramicin, salinomycin and other potassium-based additives, are not available and we see no offerings from any manufacturer at present.”
Feedinfo also reached out to several India-based feed additive suppliers.
One trader said it had received FOB China offers at $3,060/tonne for DL-methionine (November delivery), $1,660/tonne for lysine HCl (January delivery), $1,210/tonne for lysine sulphate (January delivery), $1,810/tonne for threonine (early December delivery), $3,510/tonne for valine (November delivery) and $6,300/tonne for isoleucine (December delivery).
