National Flour Mills Limited (NFM) says it has been forced to raise the prices of its animal feed products, with increases ranging from 3 to 14 per cent due to the escalating cost of purchasing soybean meal and corn.
These raw materials are primarily sourced from North America and there have been incremental increases in grain prices over the past months.
The company noted that one major factor driving prices upward is China’s high demand for grain, primarily to support the recovery of its hog sector which was seriously affected by the African Swine Flu in 2018 and 2019.
The Chinese government has made the recovery of this sector a priority for 2020 and 2021, and their high demand for grain has led to price increases of soybean and corn by over 40 and 60 per cent, respectively.
NFM noted that in addition to the demand China is placing on US supplies, South America experienced dry weather conditions, which negatively affected prospects for that region’s 2021 corn and soybean crops.
These problems, it added, were exacerbated by labour strikes in Argentina in January 2021.
“Furthermore, there are additional general issues affecting trade overall such as the pandemic which has disrupted international trade to an extraordinary degree, driving up the cost of shipping goods of all kinds.
“The demand for goods has also outstripped the availability of containers due to the large imbalance at present with supplies being shipped to China, and the delays in most major ports due to high shipping traffic is causing an escalation in freight costs in most sectors,” the company said.
A recent increase in feed by Mastermix has already prompted increases in the price of eggs.
Vice-president of the Table Egg Farmers association Dennis Shawn Ramsingh said NFM’s increase was unlikely to affect their prices any further.
The World Agricultural Supply and Demand Estimates (WASDE) report for January 20/21 has stated that corn and soy bean production have decreased forcing prices up.