Perstorp Animal Nutrition organized a technical Webinar on “Global Animal Industry outlook and its recovery”. The presenter was Mr. Nan –Drik Mulder, who is Senior Global Specialist in Animal protein from Rabobank and the webinar was moderated by Mrs. Lina Anderson, Perstorp Animal Nutrition.
After Hosekeeping Welcome introduction of the webinar, Mrs. Lina share the screen with Dr. Jim Ren, Vice- President APAC, from Perstorp Animal Nutrition for Group’s Introduction.
Mrs. Lina Anderson, Perstorp Animal Nutrition
Dr. Jim Ren,Vice- President APAC, Perstorp Animal Nutrition
Dr. Jim has more than 18 years of experience in different APAC countries in different roles. He started his carrier as a technical manager in China, later on relocated himself to Singapore and joined Perstorp in 2018.
Dr. Jim than, welcome all the attendees and made them introduced to the Perstorp Animal Nutrition. He said that “One molecule can change everything” and this is the motto of perstorp. He added that Perstorp has 140 years of professional expertise with 7 sites of Production in which 5 are in U.S. He added that Perstorp made 9.2 Billion SEK (Swedish Currency ; Krona SEK) turnover in 2020 and Their animal nutrition unit is doing business in more than 50 countries.
Dr. Jim explained that his company deals with Digestive Acids; i.e, Propionic Acid: Preserve Nutritional Value and reduce mycotoxin production, Formic Acid: Ensure Silage Quality, feed Acidification and hygiene, Butyric Acid: Improve Animal Gut Health and increase performance and Valeric Acid: Improve Animal Gut Health.
He further added that Holistic solution by Perstorp towards Feed Hygiene (Propionic / Formic Acid), Gut Health (Butyric / Valeric) and Water Quality (Formic / Lactic Acid) made its approach very sound and clear.
As Dr. Jim stated previously about Perstorp’s 140 years of history, he explained the genesis of the Company years by years, as illustrated in Figure 1.
Figure 1: Genesis of Perstorp Group
He further said that Perstorp has targeted that in 2022, they: 1 Are going for expansion in their production capacity by 70%, 2. Geographical Expansion, as they are going to establish satellite production units in Asia and America and increase manpower.
After this brief introduction, he handed over the digital stage to Mr. Nan-Dirk Mulder, Senior Global Specialist – Animal Nutrition, Rabobank.
Mr. Mulder Started his presentation “Global Animal Protein Industry Outlook 2021”
He said that we are recovering fast from the COVID-19, in last few months, as vaccination program all over the world is in full swing, but our animal protein industry has so many factor to affect other than COVID-19.
He explained that if we look deeper into the market we could find that
- ASF (African Swine Fever) has changed the prospect of the meat industry Globally from 2018.
- COVID-19 has started affecting Global Food chain supply for March 2020.
- Recently inflated Feed Prices has affected badly to the Global Animal Protein Industry.
- Avian Influenza is always be there to inhibit the growth of Poultry Industry in many part of World.
The Graphical representation shows the effect of all these above given factors on Poek, Beef and Poultry Industry globally. He said that Global Market recovery has started but through the bumpy roads.
He further explained that there are 3 stages of impact of COVID -19 on the Global Animal Protein Industry:
- Stage 1: DESRUPTION (2020): Where Food Channels have to shift from food service to retail and Online. There were closure of wet market in many Asian Countries and constrains on export has also been observed. He further said that Supply chain was badly affected due to absence of workers, Logistic or Distribution issue and Surge in pricing of inputs like feed additives, Animal Health Products and genetics.
- Stage 2: Road to Recovery (2021): He explained that gradually, market is recovering, as vaccination is in process with full swing and contamination measures have been taken care in each and every country. Food services recovery is also a good sign for the industry.
He further explained that due to COVID-19, ASF and AI, global supply is still low which the main matter of concern. Ongoing high feed price has also affecting supply chain. Trade is improving but slower than local production.
- Stage 3: (The Aftermath) (Post 2022); he said that changing view and aspects requires different strategies for food supply and supplies.
Mr. Mulder added that we are marching towards change and volatility of the market. He also said that reopening of the food service is key for market recovery. He stated that Food services has drastically increased in many countries and now share more % than retail market in E.U, Mexico, Thailand, Brazil, Malaysia, U.s, Philippines, Colombia and China.
Mr. Mulder said that African Swine Fever in the Pork industry has affected many Asian Countries especially China. He said that China is victim of ASF from 2018 and has reported 42% drop since in the Hog Herd, are the main reason of its falling Prices, as explained in the Diagram.
Due to these hefty drift in eating habits in densely populous country like China and its many pork eat neighboring, compassionated other Meat markets to Grow. China Reported 18% increase in White Broiler production after 2018, as well as now it is a booming market for many meat importers for last 2 years.
He further added that ASF in Eastern Europe like Russia and Germany has also affected the Export industry from last September. ASF in Germany has shaken up the trade flows as it is one of the biggest exporter of the meat to the china and from last September the trade has been close due to ASF. He said that now Spain, Denmark and Netherlands has replaced Germany as an exporter of the meat to the China. He further added that AI (Avian Influenza) has highly disrupting the global trends and it might stay endemic in Eurasia.
Mr. Mulder explained that Avian Influenza cases has sharply increased in Europe from November 2020 and has restricted the export trands. A.I has not only created disruption in the trends of the poultry but disrupted DOC and hatching eggs, as Europe is the biggest supplies of Hatching eggs around the globe. He added that A.I also affected local supply of Poultry.
Coming to the Feed and Grain prices rally in 2020, he said that feed prices expected to stay high in next year too. He explained many reason for it. Mr. Mulder said that Fast recovering Chinese Pork industry and Weather issue in Many African and European countries are main issues. Rabbobank reported 70-100% surge in the prices of Soybean and Corn and 40% increase in the Rates of Wheat.
He further added that New Biofuel ambitions are pushing up the global vegetable oil prices. He said that CPO Soy oil prices are up by 70% in last 5 months, and rising Biofuel demand are the main factors affecting Feed Prices.
He said that according to the Rabobank, gradually recovering markets will cause increase in price inflation, as shown in the diagram.
Mr. Mulder explained that Global Meat Consumption is also recovering fast after the decline in the cases of ASF and COVID-19. He emphasis on the COVID-19 Vaccination and Controlled program will be key for the Market recovery.
United States has reported strong market demand during COVID-19 recovery. He further added that if we talk about individual Meat, condition of Poultry has increased whereas Pork market will be driven by ASF; roads of recovery are bumpy after this surge in endemic.
He talked about the Asian Poultry Industry. He stated that Vietnam has got many new projects related to poultry in last 2 years, made it an only Asian Country with Positive YOY growth in both 2019 & 2020. Further he said that Indian Poultry market has been a roller-coaster due to AI and COVID-19 related issues. Japan’s Poultry industry has been affected from oversupply and trade related issues in 2021. Malaysia is facing low domestic supply and import issue as well as surged feed prices has inhibiting the growth of the industry.
Figure: Asian Poultry Production & its Performance
For EU, Mr. Mulder said that Market is recovering for Pork and Poultry, but export will be Pork Farming driven. He added that EU’s poultry industry has big impact of COVID-19 and prices are also rising very fast.
For Poultry, he explained that following will be key investment trends:
- Growing Global Market Trends.
- More focus on Value added and Concept
- Change in Supply channels; more digital, Sustainable and smarter.
- More Globalized industry
He stated that Global Animal Protein market will keep growing with Poultry in Lead, as data’s are shown in the Diagram
He said that in Outlook 2021-2030, 85% of growth will be happen in the emerging markets. He also mentioned that alternative protein sources will also gained solid position, but having low base. He also shown the Poultry Value added Pyramid, given is the diagram.
Mr. Mulder also explained about the social concerns to push the differentiation in the standard of the Industry, i.e. In many Countries Animal Protein is a Food as a need. Developed countries need it Animal Welfare Friendly, so somewhere else it is to be grown as environmental Friendly. So there are many drivers for the change in the standards of the product. He added that Consumers are increasingly driving the changes in the Poultry Production Standards. From 2017 to 2020, it was “Antibiotic reduction in Poultry” Campaign ran in U.S. Cage free Poultry till 2025 is another Motto many companies has committed in U.S by 2025. Third is Better Chicken Commitment, Where some firms are cultivating slow growing Chicken with low density. So he said that everything depends on Countries Purchasing Power and Customers demands.
He also said that Asia has observed an exponential growth of Modern Grocery Retail sale from 2014-2019. Onlien Food distribution has also got breakthrough in 2020. He explained that Remote working and Work from Home Scenario has changed the Market Completely. He further said that i. To go to market, ii. Catering market, iii. Lunch restaurant, and iv. After work Restaurant has been decreased, whereas 1. Supermarket Retails, ii. Online food Supllies, and iii. More Freash, less time supply is focused.
By concluding his presentation mr. Mulder said that for short term outlook, we can say that 1. Global Meat consumption to return into the growth mode, as we are recovering from COVID-19 and ASF. 2. Global Pork prices will be strong but ASF pressure will be there. 3. Chicken prices will be in the recovery mode. 4. Ongoing Feed prices will be matter of concern.
About the long term Outlook he said that 1. Global Animal Nutrition Market will grow by 20% in next decade; Asia will capture 85% market. 2. Ongoing expansions in Asia and Eastern Europe to meet growing demand. 3. Shifting from global to local will occur. 4. Western market will move towards the concept poultry.
After the presentation, Webinar was concluded with Q & A Session.