Feed additive market tracker: Vitamin and amino acid suppliers await recovery in animal, human nutrition sectors

Though a hike in prices is expected for vitamin B3, reportedly due to beta picoline supply, and the market is seeing higher ask prices for vitamins B6 and D3, while there is continued volatility in vitamin B5 prices, reports Kemiex.

Lysine, threonine, and methionine prices have shown weakness in previous months; in some cases, those products are trading near production cost, reads a report from the Swiss trading and data company.

Valine prices have taken a different route of late, however; they have been on an upward trajectory over the past few weeks due to production challenges in Chinese factories. “New supply such as BBCA Likang’s planned 20,000 tons per annum expansion will naturally limit the upside price risk.”

A return to higher prices for vitamins and amino acids, overall, would certainly need to be accompanied by solid demand recovery in the animal and human nutrition industries, a scenario that is far from guaranteed over the short-term and could possibly kick in only from 2H 2023, said Stefan Schmidinger, chief economist, Kemiex.

Lysine export volumes from China in January and February 2023 were lower by 19%, year on year (YoY), while L-threonine export volumes were also reduced, 29% below the same period in 2022. Indeed, there have been notably weaker amino acid export flows to Europe from China since September, added the Kemiex spokesperson.

Expansion projects ​

Production news, and the Fufeng Group is planning a major €1.2bn amino acids investment in Bulgaria after a project in Grand Forks, in North Dakoka in the US, was stopped for geopolitical reasons.

The proposed corn mill project by Fufeng USA, a subsidiary of China’s agribusiness giant Fufeng, was halted on grounds it could be a threat to national security. The mill was to be built near a sensitive military base. A US Air Force official spoke out against the plan, and the North Dakota city council then moved to vote against the project.

Fufeng operates large-scale production facilities in Northern China. The group's subsidiaries produce amino acid products, maize refined products, starch sweeteners, fertilizers, corn oil, and animal nutrition products, among others.

In terms of additional amino acid production capacity coming on stream, about half a million tons of new lysine supply is expected near-term from China-based companies such as Golden Corn, Jinyufeng (Yufeng Group) and Dacheng (GBT), outlined Kemiex.

Moreover, NHU and Sinopec are advancing their 180,000 tons per annum methionine hydroxy analogue expansion project in Ningbo, a major port and industrial hub in east China's Zhejiang province, south of Shanghai, reads an outlook from the Swiss trading and data group.

Port congestion is over 

Meanwhile, globally, freight prices are a sweet spot; cargo is moving again, with record high orderbook-to-fleet and new deliveries. Furthermore, port congestions have disappeared in most geographies over the past year.

EU approval 

On the regulatory side, EU authorisation was recently granted to a vitamin B2 produced by Guangji Pharmaceutical. "That is an interesting development in that the import of feed-grade vitamin B2 from China has been scrutinized for years since genetically modified strains were identified in 2014 and 2017 and since DSM and BASF could ensure reliable supply from Europe," commented Schmidinger.

European livestock sector digesting a difficult 2022​

As of December 2022, there were 134.3m swine heads in the EU, a year-on-year drop of 7.4m (-5.2%) driven by Germany and Denmark, according to Kemiex data.

Bovine heads were 74.9m, a drop of -50k (-1.1%) compared to 2021, driven by France and Italy.

Dairy accounted for 20.1m heads, recording a year-on-year drop of about 120k (-0.6%), driven by France and Germany. 

The livestock sector in Europe faced many challenges last year and continues to do so, with cuts in swine herd size down to the decline in the number of sows and producer exits; cattle farmers have been reducing their herds and shortening lactation cycles both to respond to green policies and to reduce feed usage.