A significant event in the feed additives arena this week was an incident at Chinese supplier, Zhejiang Medicine Company (ZMC), involving the buffer tank of the exhaust system in the intermediates workshop used for production of Beta-ionone, reported Kemiex.
“Video footage circulating on social media depicted a substantial fire impacting at least one building. Fortunately, there were no casualties, and the direct economic damage was minimal, allowing operations to continue uninterrupted.
“Nevertheless, it's uncommon for a manufacturer to issue a swift statement downplaying such an incident. Consequently, uncertainty lingers in the marketplace regarding the potential impact on the production of carotenoids, vitamin A, and vitamin E in the upcoming weeks or months. Prior to this event, prices for the latter two vitamins had already shown signs of firming,” Stefan Schmidinger, chief economist, Kemiex, told FeedNavigator.
It wouldn't be surprising if the company or authorities were to issue further announcements next week, detailing the impact assessment, rectification measures, work safety protocols, or other related topics, he added.
Additionally, there have been advancements regarding Zhejiang NHU's EU market authorization for feed-grade vitamin B12, a topic slated for discussion at the upcoming SCOPAFF meeting, noted the market commentary from the Swiss data provider.
However, freight rates are exhibiting some volatility, introducing tactical upside price risks, continued Schmidinger.
Chinese markets are currently closed for ‘golden week’ celebrations until Sunday, coinciding with Labor Day. Additionally, other regions are gearing up for holidays, resulting in reduced activity overall.
Chinese feed demand
Beyond additives, there has been a significant reduction in China's livestock population, estimated at -48.5 million heads, potentially indicating a near-term impact on feed demand in one of the world's largest feed-consuming countries, according to data from Kemiex.
Additionally, local soymeal prices have decreased by about -14% year-to-date.
In contrast, Brazil's first-quarter meat exports show a growth of +28% for beef and +1% for swine, while poultry exports witnessed a decline of -7% year-on-year.
