May 17, 2010
German feed makers predict higher prices
The German feed industry (DVT) has announced higher prices on the short term for compound feeds due to a shortage in oilcakes on the market.
According to DVT, feed manufacturers not only face a weaker euro to the dollar, but also have to deal with shortages in rapeseed cake, an important constituent in German animal feeds.
The shortage in
rapeseed cake is mainly caused by a fire in the oil mill of Bunge Deutschland GmbH at Oberrhein. This mill supplies approximately 25% of German use of rapeseed cake. Bunge has cancelled all existing contracts, DVT said.
As a result of these supply failures, the companies are forced to purchase expensive coverage, whereas the rapeseed cake market shows significant price jumps.
Rapeseed cake suppliers and compound feed manufacturers will have to pass these additional costs to their customers.
For current sales contracts, force majeure clauses will be opened. DVT speaks of a need for adjustment between EUR0.40 (US$0.50) and some Euros per 100 kg, depending on the type and formulation.
Given the shortages of rapeseed, the association expects continued solid compound feed prices.