Feed additive market trends: Not always about price

22-10-2021 | |
Photo: Canva
Photo: Canva

Procurement managers have a number of considerations when buying material. But the its not all about price. Availability and timeliness are critical.

The most obvious consideration is, of course, the price of the feedstock. Finding material at the lowest possible price ensures that the company can continue to operate with the best possible margins. But the more important considerations aren’t about price at all – they are about availability and timeliness. While overpaying for feedstocks may be costly, the prospect of shutting down a factory is far more detrimental to the bottom line.

China still impacting markets

The current market conditions, impacted by China’s energy regulations and continued challenges to global shipping, are making the second set of considerations considerably harder to deliver on. Across most of Glowlit’s products, we are seeing an increase in spot prices over the last month all over the world. Forward contracts being entered for Q1 2022 already show the market’s expectations for availability, or lack thereof.

Trend driven by availability

In the figures below is a sampling of products which are all trending upward. Much of this trend is being driven by supply availability. While each individual product represents a small part of a feed ration, taken together they can dramatically impact the price of the overall formula. And worse yet, if availability is driving the increase in price, the lack of any one product can spell disaster.

Glowlit Company profile