Peruvian fishmeal and fish oil prices drop sharply in September
The price of fish meal and fish oil prices produced from Peruvian anchovies and longnose anchovies has drastically decreased this year. According to IFFO data, the price of Peru and Chile composite super prime fishmeal (FOB) was seen at US$1,611 per metric ton in September 2024, which represents a reduction of 25.3% year on year (y-o-y). More strikingly, Peru feed fish oil prices (FOB) were traded at US$3,230 per metric ton in September 2024, representing a reduction in the price of 61.4% y-o-y. The price of Peruvian fish oil prices have been on a constant decline since spring.
The main factor that may influence these extreme price changes is the increase in the supply of E. ringens and A. nasus as the first season in 2023 was cancelled due to the poor condition of the Peruvian anchovy stock because of unfavorable sea conditions resulting from the Southern Oscillation (ENSO). El Niño reduces the food availability for E. ringens and A. nasus, increasing the mortality rate. In addition, during this event, Peruvian anchovies migrate to cooler waters or move further south, making fishing challenging due to changes in the distribution patterns. Also, the El Niño stage of the ENSO is associated with a reduction in reproductive success because of adverse environmental conditions.
However, the first fishing season of 2024 for E. ringens and A. nasus on the northern and central coast of Peru has been successful, with 98.2% of the total allowable catch (TAC) of 2.475 million metric tons and a total catch of 2,430,499 metric tons achieved, according to the Institute of the Sea of Peru (IMARPE) in June 2024. The second fishing season for E. ringens and A. nasus has been authorized to start on July 1, 2024, and will run until December 31, 2024, or until TAC is reached. The TAC for the second fishing season has been set at 251,000 metric tons. The Institute of the Sea of Peru (IMARPE) latest report displays a total landing of 31,125 metric tons, accounting for 12.4% of the TAC. If the second fishing season of 2024 (in the South) mirrors the success of the first fishing season of 2024 (North-Central), it is highly likely that fish oil prices and fish meal will remain stable.”
Russia’s Agriculture Ministry sets $250/mt FOB price floor for 12.5% protein wheat
Expana heard that Russia’s Agriculture Ministry, during a meeting on Friday, Oct. 11 instructed exporters not to sell wheat with 12.5% protein content below $250/mt FOB at international tenders, effectively implementing a price floor. The Grain Exporters Union confirmed that the ministry also encouraged direct sales to buyers without third-party involvement. Industry sources suggest these measures are driven by a smaller-than-expected wheat crop and an unsustainably high export pace. Russia, as the world’s largest wheat exporter, has also been selling wheat at low prices, making it the cheapest in the Black Sea region. This mirrors last year’s unofficial floor of $275/mt FOB with traders expecting similar tactics, such as selling on a CIF basis to bypass restrictions. The current restrictions are likely to remain in place until June 2025. Expana reports Russian 12.5% wheat offers for November delivery are priced between $243-$250/mt, while bids stand at $232-$235/mt, though buying interest remains low. Ukrainian 11.5% wheat is offered a spot at $234/mt. The reintroduction of an informal price floor of $250/mt for Russian wheat exports, along with restrictions on third-party involvement, will likely limit the availability of cheap Russian wheat on the global market. This creates upward pressure on global wheat prices, especially since Russia is the world’s largest wheat exporter. Buyers will have fewer low-cost options, which could stabilize or push prices higher, particularly in markets dependent on Black Sea wheat supplies.
Sources also revealed that Egypt, a key buyer of Russian wheat, has introduced a maximum purchase price of $240/mt. Market players report that it is still unclear if this cap applies to domestic or imported grain but if it affects imports, it will challenge Egypt’s ability to buy wheat at that price. An Expana source noted, “These export duties are pushing wheat prices up. While the pace of Russian wheat exports has increased due to better weather and improved vessel arrivals, we expect a slowdown later this month [October]. October wheat export volumes are estimated to be around 4.8-5.0 million mt.”
Slow Ukrainian planting stokes fundamental flames of the rapeseed market
Concerns continue about the slow pace of rapeseed planting in Ukraine where adverse weather conditions have hindered progress. According to market players only 90-92% of the intended area has been sown, marking the lowest planting rate in several years and several percentage points (PP) behind sowing in 2023. Industry sources suggest that poor conditions may lead farmers to shift towards barley and wheat, crops that still have a viable planting window although this is rapidly closing. This could result in a significant reduction in Ukraine’s rapeseed output for next year’s harvest, although the final planted area remains uncertain. Furthermore, there are concerns about the viability of already sown crops, as a lack of moisture in many areas raises the risk that some fields may need to be replanted with alternative crops. On the export front, Ukraine continues to be a key exporter to the EU-27, exporting nearly 1 million mt thus calendar year-to-date far exceeding last year’s export rate by over 60%. This is unsurprising owing to the decline in the EU-27 crop which is expected to be around 16.8 million mt, a substantial decline from the crop produced in 2023/24 which was around 19.6 million mt. However, market players commented to Expana that such a brisk export pace so early in the season could lead to problems as the year progresses and as we enter 2025 as volumes are exceedingly likely to decrease. This could cause difficulties in sourcing rapeseed for European players depending on how much Canola Australia can harvest. Industry insiders commented to Expana that they are increasingly pessimistic about production in Australia with estimates between 5.4 and 5.6 million mt a significant decline from estimates given earlier which were more than 6 million mt.
Market players commented to Expana that European rapeseed crush margins were now roughly €35/mt barely above full cost. Players raised concerns to Expana that these margins could deteriorate further, as farmers broadly were unwilling to sell the crop ‘cheaply’, as they are acutely aware of the domestic supply and production within the EU-27. If margins do fall further, it could place significant pressure on rapeseed oil from two directions, firstly, a lack of crushing could deplete rapeseed oil supplies potentially adding upward price pressure. However, conversely, a lack of demand for rapeseed destined for crushing could place downward pressure on rapeseed prices which could ultimately place tangential pressure on rapeseed oil prices until a more ‘normal’ margin resumes.
South Lebanon’s agriculture and feed sectors feel the impact of ongoing Israeli missile strikes
Itt has nearly been a month since the hostilities between Israel and Hezbollah began. Israeli missile strikes in Lebanon have killed at least a few thousand people and wounded several thousand.
Utrix, a leading Lebanese producer of premixes, concentrates, and feed additives, operating a factory in Bekaa in the center-east of the country near the border with Damascus, informed Expana that the Lebanese feed and animal production market, like all sectors of the economy and human activities in the country, is heavily impacted by the current situation. Utrix Business Support Director, Michel Daher, said that in the southern part of the country, from the southern border with Israel to Sidon, all farms and feed operations are closed as people flee the area. North of this region, up to Khalde (south of Beirut), feed mills and premixers operate at 50-60% capacity. However, Daher added that in the northern part of the country, all feed and premix producers are functioning normally and at full capacity to continue supplying farms. Logistics in this area remain functional, with raw materials such as corn and soy being delivered to the feed mills without interruption.
The World Food Programme Country Director in Lebanon, Matthew Hollingworth, recently voiced concern about Lebanon’s ability to feed itself, saying thousands of hectares of farmland across the country’s south have been burned or abandoned. Hollingworth pointed out that some harvests will not occur, and that produce is rotting in fields.
In tandem, a few weeks ago, Al Hajj Hassan Abbas, Minister of Agriculture of Lebanon chaired a meeting that included the head of the Lebanese Poultry Syndicate, William Boutros, the Secretary of the Syndicate of Livestock Importers, Majed Eid, and Ali Fadel, a member of the Syndicate of Importers and Exporters of Vegetables and Fruits. According to Boutros, current domestic poultry production is sufficient to meet market needs, although prices remain below operating costs. Production in south Lebanon represents about 15% of the total national production. Eid, meanwhile, said that the stock of cows is sufficient for a period ranging between two and three months, and many cows in the south have been transferred to safe areas where possible. As for Fadel, he confirmed that the available quantities of vegetables and fruits are sufficient to meet the market’s needs, pointing out that there are about 60,000 tonnes of stored potatoes. However, Fadel warned of the challenges facing the fruit and vegetable sector due to the shortage of workers and the difficulty of reaching some areas.
During the meeting, Al Hajj Hassan Abbas stressed that food security remains at the top of the country’s priorities, and he will seek to ensure the continued availability of basic commodities. According to FAO estimates, 2023 total cereal production is estimated at about 134,000 tonnes, which is close to the 2022 and 2021 harvests. Domestic cereal production, however, covers, on average, less than 20% of the consumption needs. Lebanon, therefore, relies heavily on imports, sourced mostly from the Black Sea Region. In the 2022/23 marketing year (July/June), cereal import requirements, mainly common wheat for human consumption and maize to feed livestock and poultry, were seen at 1.9 million tonnes.
BASF pushes back production start-up for vitamin A to April 2025; vitamin E to July 2025
BASF has pushed back the expected start-ups for vitamin E, vitamin A and carotenoid production in Ludwigshafen by several months. “For Nutrition Ingredients, we now estimate to restart production of vitamin A in early April 2025, and vitamin E as well as carotenoids in early July 2025”, the company said. In the meantime, BASF said it is “proactively working to source key intermediate products for vitamin production that would enable us to mitigate the impact on the production of vitamins and carotenoids.” “As mentioned in our previous update [21 August], it will require at least several months to ensure ‘business as usual’ which includes replenishments of global, regional and local inventory levels. These timing assumptions are based on our current knowledge and are subject to change depending on the ongoing repair work,” BASF said.
In August 2024, the company shared a preliminary timeline, indicating that vitamin E, vitamin A and carotenoid production in Ludwigshafen would not commence before January 2025. BASF stressed that the preliminary timeline given in August was based on indicative repair assumptions. The updated assumptions are based on additional information gained during the incident investigation, which required a high number of inspections and an integrity check of more than 1,000 pieces of equipment as well as ordering of required equipment and repair work in parallel.
BASF initially declared force majeure on deliveries of selected vitamin A, vitamin E, and carotenoid products, as well as selected aroma ingredients, on 7 August. The explosion itself occurred at the southern part of the Ludwigshafen site at around noon on July 29th . The Ludwigshafen site manufactures feed-grade vitamin A 1000 and vitamin E oil, as well as various human nutrition, animal nutrition, and cosmetic ingredients.
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