Times are tough. More than six months after the Russian aggression against Ukraine began, UN experts warn that the current affordability crisis and high fertilizer prices could reduce global grain production by as much as 40%. This, in turn, could lead to a severe food crisis that will have a great effect on the whole market. The UN is also stressing the need to export more grain from Ukraine’s silos so that they can accommodate those grains that nevertheless manage to be harvested despite the war.
Inflation is being felt all over the world. In the United Kingdom, inflation increased prices by 5.1% in the 12 months through August. This is the highest rate of growth since 2005. Such a high inflation figure is mainly due to the increase in the price of milk, margarine and chips, whose production costs, which are linked to the prices of animal feed, fertilizer, wheat and vegetable oils, have risen significantly recently. According to Eurostat, inflation on an annualized basis in July 2022 in the eurozone was 8.9%, in the European Union as a whole 9.8%, in Poland 14.2%, in France 6.8%, and in Estonia 23.2%. Like every other case of inflation, it deeply affects the market, both due to rising costs of production and declining interest in particular products.
The turn of August and September each year are busy times for the food and feed industry. The harvest period largely helps predict prices and availability of plant-based products for the coming months. Undoubtedly, the current year is unique in that all the circumstances typical of this time of year occur, while at the same time all plant-based market players are facing challenges related to the geopolitical situation and weather conditions. Raging inflation and energy prices are taking their toll on producers of plant-based goods and forcing them to change their strategies.
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Corn Gluten Meal
The Corn Gluten Meal market slowed down for a moment, but demand is still visible.Some fish producers are trying to buy directly from Ukraine, but Ukrainian producers are struggling with mycotoxins. As for the Serbian product on the other hand, there is less raw material available due to the droughts that have hit the country in mid-summer. We have heard that many buyers are waiting for the purchases at the end of the corn harvest in Europe, which will ultimately determine the price of the product. At the moment the price is considered stable, but no one can predict how long it will remain so. The feed industry is also awaiting developments, with producers worried about recession and production uncertainty, and large contracts being postponed for the time being.
In recent times, one can easily observe a great interest in Potato Protein feed grade. Forecasts point to price increases and weaker availability over the next year. Potentially high prices are clearly indicated by significant increases in energy prices and unsatisfactory potato harvests. For this reason, many state that maybe it is worth contracting now and ensuring a steady supply.
The annual PotatoEurope 2022 event took place in early September, with the fair attracting several thousand participants from around the world. Guests had the opportunity to hear about the latest technologies used in potato cultivation, such as Digitalization in technology for potato cultivation explored in „Smart Potato Farming” and Erosion control and water management explored in „Intercropping and greening.” The basic conclusion that comes from the experience of the organizers and participants is the observation that direct human contact is the basis in the potato business.
Vital Wheat Gluten
As in the past weeks, Vital Wheat Gluten is particularly in demand in the food market, to a lesser extent in the feed market. Prices are stable, but producers are offering smaller volumes than a year ago, currently unable to provide similar volumes. Some speculate that a product with lower protein content may soon appear on the market, supposedly due to fertilizer shortages.
Hydrolyzed Wheat Gluten
The Hydrolyzed Wheat Gluten food grade market is still experiencing shortages. On the other hand, feed grade HWG demand remains steady. Although this year’s acreage for the wheat crop in England, for example, was 0.8% higher compared to last year, only small quantities of raw material are beginning to appear on the market, but they are smaller than before. Long delays in deliveries at major producers are being observed. The price remains high, although it has fallen slightly recently.
Dextrose Monohydrate food grade is currently in high demand, and we regularly receive inquiries about this very product. At the same time, we note significant shortages in the availability of feed quality products. Forecasts of a harsh winter, high energy prices and energy supply interruptions have forced some sugar producers to push forward production plans so that this year’s production cycle can be completed as soon as possible, and so that its peak does not occur during the coldest months.
Soy flour NON – GMO
There is a significant increase in the price of Soybean Meal. Some market players were waiting for the arrival of cheaper raw material from Ukraine, but it matches the price of the product from other sources. There is growing interest in Soy Flour among manufacturers of milk replacers.