33rd Edition of Foodcom ADDITIVES Newsletter

Author
Foodcom Experts
02.06.2023
6 min reading
33rd Edition of Foodcom ADDITIVES Newsletter

The situation in the additives market remains dynamic (what’s new, right?). The cost of supplying certain products is increasing, which you should definitely take into account when searching for them on the market or preparing sales offers. All Amino Acids are in high demand, which is mainly due to the fact that they are in short supply on the market. As a result, prices increase noticeably from week to week.

As for the good news, the latest figures indicate that the situation in the fertilizer market is slowly beginning to settle down after two exceptionally turbulent years. In 2021, prices had skyrocketed due to the impact of the pandemic, while in 2022 the situation worsened following Russia’s aggression against Ukraine. In the current Q2 of 2023, fertilizer prices are becoming more affordable and consumption in selected regions recovers significantly. However, this does not change the fact that it will take longer to return to pre-pandemic price levels.

What is currently having the greatest impact on the situation in the additives market is the seasonality of supply and demand for individual raw materials. Consistent with patterns that have been in place for years, interest in Vitamin C has recently waned, while the popularity of Xanthan Gum has increased. You can traditionally read more about how prices, demand and supply of individual products develop later in the newsletter.

Lysine HCl

Lysine HCl has undoubtedly been on everyone’s lips for a few weeks now. We receive many inquiries about this raw material. Producers are preparing for the seasonal peak of Lysine HCl’s popularity. Prices are rising noticeably, which is accepted by most buyers. As one can easily guess, this trend will most likely continue.

L-Threonine

L-Threonine is currently the most expensive Amino Acid on the market. It is very popular, as can be seen by the number of requests. The situation is similar to that of Lysine HCl: manufacturers of L-Threonine are also preparing for the seasonal peak of its popularity. Prices are rising, which is met with approval from buyers. Everything indicates that the situation will continue in this direction.

Methionine

As with Lysine HCl and L-Threonine, the popularity and price of Methionine is increasing. There is no doubt that this trend will continue, as the growing interest is accompanied by a reduction in the availability of this raw material on the market.

Citric Acid

Citric Acid is another commodity whose popularity and price have increased recently. More shipments to Europe are expected in the near future. The rising price of the raw material is influenced not only by its greater popularity, but also by the rising cost of delivery, which naturally affects the price.

Vitamin C

Vitamin C is currently offered at relatively low prices. No wonder, it has become warmer, people and animals do not get colds and therefore less often reach for supplements whose ingredients are primarily known for strengthening immunity. Maybe it’s a good idea to start stocking up for winter now?

Xanthan Gum

Xanthan Gum is in high demand. This is not surprising, since it is used, among other things, in the production of jams, which is intensified after the harvest of particular fruit. The upcoming intensive activities in fruit processing centers will clearly be reflected in an increase in the popularity of Xanthan Gum.

 

Europe

British agriculture faces another (major) challenge

Net migration in the UK has reached a record 606 600 in 2022, leading many to consider a possible reduction in immigration. Farmers have no doubt that potential regulations will affect their business, as agricultural production in the UK currently relies mainly on migrant labor. Since Brexit, the number of migrant workers has dropped significantly, adding to the pressure on the agricultural sector, which is already struggling with rising energy and fertilizer costs.

Russia’s Uralchem is looking for new ways to export ammonia

Russia’s largest producer of potash and ammonium nitrate has decided to build a specialized ammonia terminal, the first phase of which is to be completed on the Taman Peninsula in southern Russia by the end of 2023. In the first phase, the Taman terminal will be able to handle 1.5 million tons of ammonia per year, and by the end of 2025. 3.5 million tons of ammonia and 1.5 million tons of urea. The new terminal is to become a replacement for the Odessa pipeline, which remains unused for well-known reasons.

Work on Ireland’s fertilizer database drags on

The Irish Department of Agriculture, Food and the Marine has said that work on the fertilizer database is ongoing. The new tool, which should have been operational since January, will track farmers’ stocks, purchases and uses of fertilizer. Professional end-users of fertilizer will upload inventory data at the beginning of the year and enter year-end inventory data to track total fertilizer use during the calendar year. Most likely, the delays in implementing the tool are due to data processing issues.

The Americas

A carbon-free fertilizer plant will be built in the United States

Técnicas Reunidas and Atlas Agro have joined forces to build Pacific Green Fertilizer, a carbon-free fertilizer plant. It is to be built in Richland in Washington state, USA. Using state-of-the-art proprietary technology, it will be one of the world’s first carbon-free nitrogen plants, using only air, water and carbon-free electricity as raw materials. It is said to be the first of many plants Atlas Agro plans to build.

​Canadian fertilizer giant considers cutting production

Nutrien, one of the world’s largest fertilizer producers, may slow the growth of potash fertilizer production. The reasons are declining sales and product prices. The impact of the possible changes is difficult to estimate, but it will certainly affect the agricultural industry, as potash fertilizer is one of the most important ingredients for plant growth.

Direct Enterprises is proposing a new solution to the health of America’s soil

Called Reclaim, the new biological technology is designed to improve soil health, help decompose crop residues and optimize nutrient release time. As Reclaim’s developers claim (you see what we did here?), the technology features a customized formula that contains the highest concentration of key microorganisms specifically selected to break down crop residues quickly and efficiently, which is expected to result in higher yields and healthier crops.

Asia & Oceania

India will reduce pollution from the aviation industry

India recently announced that the country’s airlines must use 1% sustainable aviation fuel (SAF) by 2025 to reduce emissions from the sector. Using 1% SAF is expected to mean using about 140 million liters of biofuel. Government officials say that when larger quantities of biofuels become available, regulations of 4-5% instead of 1% will follow.

New Zealand farmers face the highest inflation in 40 years

The latest figures indicate that agricultural inflation rose to 16.3% in the year to March 2023, more than double consumer price inflation of 6.7%. The previous 40-year record was set in 2022 at 10.2%. The largest increases were in loan interest, feed, pasture, fertilizer, lime, and seed. This is definitely not the kind of record anyone is waiting for…

China has increased its exports to North Korea

According to the latest data, Chinese exports to North Korea increased by 69% year-on-year in April, reaching $166 million. Major exports included diammonium hydrogen phosphate, a widely used fertilizer, and… processed hair and wool used to make wigs. Rice was also exported in large quantities, no doubt related to North Korea’s food security problems.

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