FEFAC Joint Meeting Task Force Emerging feed supply chain security threats

The 28th meeting of the FEFAC Joint Meeting Task Force on Emerging Feed Supply Chain Security Threats took place on the 28 of August. A major focus of the meeting was the ongoing situation in Ukraine, where the agricultural sector continues to face significant challenges:

Energy Crisis: Ukraine is grappling with severe electricity & personnel shortages, impacting its agricultural output.

Harvest Outlook: The 2024/2025 harvest season has begun, but expectations are low. Soybean and sunflower yields are predicted to be lower than usual, particularly in the southern regions, due to severe drought. Wheat and barley harvests have recently concluded, with prices remaining high as producers withhold stock. Rapeseed, however, is being sold at higher prices, offering some relief to farmers.

Rising Costs: Transportation costs have surged due to a shortage of workers, increased energy costs, and a lack of available trucks, driving up the cost of imports. Additionally, the prices of essential vitamins, such as A and E, have tripled, following the Force majeure declaration by BASF.

Infrastructure Damage: The destruction of infrastructure continues to hamper the agricultural sector's recovery, although new investments are taking place.

The Task Force experts noted a slowing down of Ukrainian grain exports via Solidarity La ne, while experts via the Black Sea "humanitarian" corridor is increasing.

At the same time, they point to a significant change of trade dynamics possibly resulting from the new ATM regulation, as more soybean meal, sunflower meal, rapeseed meal, and other co-products like sugar beet pulp are entering the EC via Hungary.

The adoption of EU tariffs on grain and oilseed imports from Russia and Belarus was discussed, with limited impact on sunflower meal prices. However, there is concern over the availability of non-GMO soybean meal and rapeseed meal.

The task force also reviewed the latest market developments related to the EU Deforestation Regulation (EUDR), noting more indications of EUDR compliant offers by importers, however without any clarity on available volumes. FEFAC is awaiting feedback from DG AGRI on its initial Economic EUDR impact assessment.

Additionally, the Task Force addressed an ongoing EU anti-dumping investigation concerning lysine imports from China, which may not lead to a fast-track decision on provisional tariffs within the next 7 months. They noted with surprise the EC decision to extend the zero-tariff import duty for lysine products from China by six months for half the quota was also discussed (Q1 2025). They recommended that FEFAC should respond to Member State proposal to conduct also an economic impact assessment of potential EC import duties for the EU feed and livestock sector. This will be discussed at the next FEFAC Board meeting on 4 September.

The Task Force experts raised concerns about BASF's declaration of force majeure on selected vitamin A and E products. This situation underscores the EU's vulnerability in the vitamins market. The task force tackled the issue of pesticide residues in feed materials, particularly the interpretation of Footnote 1, which provides exemptions from maximum residue limits (MRLs) for certain "feed use only" products. They agreed that divergent interpretations across the EU are creating uncertainty and could impact trade. FEFAC, along with other industry associations, is coordinating efforts to establish a common position with COCERAL and PFP for the current DG SANTE working group on harmonised guidance led by The Netherlands and France, on this issue to minimise trade disruptions without compromising safety.

The next Task force meeting is scheduled for 21 October 2024.

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