MARKET

We must have noticed a steady rise in the prices of amino acids and corn related products recently. Here are a few reasons to explain the situation.

-There is a severe corn shortage in China now because of the Typhon that affected harvest this year in the northern part of China.

China temporarily stops importing corn from other countries, probably due to the COVID-19 situation. If China were to allow import, it will still not solve the shortage problem because imported corn is mostly GMO from the united states and brazil. And right now, China does not allow the usage of GMO corn to produce edible products.

- Meihua Xinjiang factory has a leakage problem, so production has also been temporary halted for the time being. This has not only contributed to shortage but has led to the pushing forward of all current orders.

- The upcoming Chinese Spring Festival is another call for concern when it comes to a price increase. Traditionally we know that price always increases in the fourth quarter because of the Spring Festival's local China market demand. This year has shown a significant difference with the rapid price increase, which is not expected to drop soon.

-Other producers of amino acids have all increase prices as well-meaning that the corn situation is affecting all the players in the feed industry.

We can conclude from the reasons stated above that amino acid prices may continue to rise until maybe February or March. If the situation doesn't change in March next year, we will experience a continuous price rise or steady price throughout 2021.