UTRECHT, NETHERLANDS – One of the main concerns for the European feed industry is what the global supply situation will look like in six months, said Asbjorn Borsting, President of FEFAC, during a press conference with journalists.
“Looking at the impact of the Black Sea situation and Ukrainian production, you probably have sufficient supply for most raw materials until some time after New Years,” he said. “But then the situation, depending on the harvest in Ukraine and depending on the logistical bottlenecks, it could be critical.”
Borsting spoke between sessions of FEFAC’s annual public meeting, which was co-located with VICTAM International on June 2 in Utrecht, the Netherlands.
He is concerned about how certain commodity processes will evolve in the spring of 2023, particularly if yields deteriorate in some parts of the world.
“We don’t have enough space,” Borsting said. “I really hope that within a few months we will get good solutions for all the logistical challenges we are currently facing with Ukraine and Russia.”
But other concerns remain that are not completely related to the war in Ukraine.
For example, the region’s dependence on additives from China. Organic protein imports, again mainly from China, have been a significant challenge for animal feed companies in Europe, Borsting said.
“We have to find solutions,” he said. “We need additional supplies of organics.”
The situation of the past two years, from COVID to the war in Ukraine, raises the question of whether some adjustments need to be made to the EU’s farm-to-fork strategy.
“Not in the sense of total sustainability, but I think some elements could be re-evaluated,” Borsting said.
The plan calls for reducing the environmental and climate impact of primary production while ensuring fair economic returns for farmers.
A new bioenergy proposal from the European Commission that calls for the expansion of biogas production by 2030 is also of concern, he said.
“It will increase the demand for biomass,” Borsting said. “It will also have an impact on our agricultural policies in the years to come.”
Re-legislation of additives is another concern for the European feed industry, said Alexander Doring, FEFAC’s general secretary, general policy.
Additive producers do not see the return on investment as clearance requirements increase with costs.
“From a user perspective, we’re concerned about losing a lot of additive substances because there just isn’t enough economic interest to defend certain additives,” Doring said. “We are actively trying with the feed industry to look at the situation to see how we can support and advocate for them.”
Looking at the bigger picture and the impact of the war in Ukraine, Borsting noted that many of his generation strongly believe in the value of free trade in the world. The focus was on addressing issues related to technical barriers to trade. The COVID pandemic and the war in Ukraine is something new.
“It’s kind of a new global barrier to trade,” he said. “Of course, this means that we will have discussions on the intelligent balance between our European regional self-sufficiency in different raw materials and our import/export balances. I think it may also be worth relearning that the former alliance partners have real value here, partners who share the same economic and commercial values.
“I think there’s a lesson to be learned that we’re not going completely to a world of free trade, but we have to find some smart balances.”