One of the factors of the increase in the cost of dairy products was the global crisis in the supply of feed additives – Ministry of Finance
According to Agrifood Strategies, there is now an acute shortage of lysine and a number of other components of compound feeds that are critically important for livestock enterprises. In particular, for 9 months of 2021, 31,892 tons of lysine were imported to Russia (for the same period in 2020 – 43,789 tons, 2019 – 42,028). The volume of exports for 9 months of 2021 decreased more than 2 times compared to the same period of 2019 (1,297 and 521 tons, respectively).
As for leasing, 6 of the 10 largest manufacturers whose products are supplied to Russia account for China.
The problems of shortage and the increase in prices for additives for the production of feed also exist for other components. In particular, according to the Union of Feed producers, methionine has risen in price by 40% over the past 1.5 years, vitamins have increased in price even more significantly. The main suppliers of methionine to Russia come fr om European countries.
A similar price increase occurred for other additives: choline chloride, gluten and threonine. These additives are supplied to Russia mainly from China.
The reasons for the shortage of feed components are the reduction of production in China as a result of the introduction of a policy of double control of energy consumption. Feed additive factories might be also closed for the period of the Olympic Games in Beijing.
As a result, producer prices for compound feed steadily increased. In September 2019 one ton of compound feeds cost 17.2 thousand rubles, however, in 2020 it was already 18.8 thousand rubles (+9%). As of September 2021, prices increased by another 26.5% to 23.7 thousand rubles per ton compared to the same period in 2020. Feed for cattle increased by 24.9% in 2021, and by 13.4% in 2020.
A similar picture is emerging in the market for the production of feed protein and concentrates, as well as feed mixtures.
Producer prices for feed protein increased by 35.6% in the first 9 months of 2021, and feed concentrates and mixtures by 55.9%.
Another factor in the price change was the increase in the cost of sea transportation and, as a result, all other methods of cargo transportation. As a result, there was an increase in prices not only for feed and additives, but also for the corresponding equipment and materials related to the production of feed. This problem is global in nature. Many major global feed producers in the European Union also reported delays in deliveries or refusal. It should be noted that the Russian market of feed additives is not the most attractive for foreign partners. For example, the price of lysine in Russia is 2.75-2.80 dollars per kg, in Europe - 4.45-4.8 dollars per kg (excluding VAT). As a result, manufacturers seek, first of all, to provide those markets wh ere higher prices are observed.
