EU feed producers may face lower margins from anti-dumping duties on Chinese lysine imports

Feed producers in the European Union may face higher feed prices and lower profit margins following the EU Commission's imposition of provisional anti-dumping duties on Chinese lysine imports, Iani Chihaia, an animal nutritionist said.

The anti-dumping import duties will range from 58.3% to 84.8% based on the CIF price.

Lysine is an organic chemical compound that belongs to the amino acids, more precisely to the essential amino acids. The feed additive is added to feed rations for poultry, dairy cows, pigs and fish, especially when levels from other protein sources such as soybean meal and corn are insufficient.

As an amino acid involved in protein synthesis, lysine helps optimize animal growth or increase milk production. It also strengthens the animals' immunity and fed efficiency.

Currently, about 80% of the world's lysine is manufactured in China and the EU depends on China for about 60% at 500,000 mt of its lysine demand.

Knock on effect on EU soybean meal prices

In the European Union, the predominant feed formulation is based on corn-soybean meal, where soybean meal serves as a crucial protein source and corn supplies vital energy.

As lysine import costs escalate and soybean meal prices decline, feed mills may choose to boost soybean meal proportions while cutting lysine content in their feed formulations.

This change reduces the usage of lysine and lessens the need for other amino acids, particularly threonine.

However, the increased demand for soybean meal resulting from this adjustment is expected to drive up soybean meal prices.

Offers for soybean meal (48% Hipro) CIF Netherlands are seen at around $383/mt on Feb. 4.

Another market source said there are no sufficient alternative supplies for synthetic lysine from EU production or any other countries that can replace imports from China. Therefore, this measure may lead to significant adverse economic consequences for the EU feed and livestock sector.

"To cut costs and maintain performance, feed manufacturers may need to switch amino acid sources or try to increase the use of other protein ingredients, such as soybean meal," Iani said.

Iani said, "Yes, soybean meal should help to replace part of the synthetic Lysine (probably 5- 10%) but can't do 100% and there are some "side effects".