NFM: Feed price increases owing to global grain hikes

NATIONAL Flour Mills Ltd (NFM) raised the prices of its animal feed, between three to 14 per cent, last month owing to increases in global grain prices.

In a release on Wednesday, the state-owned company said there have been “incremental increases” in grain prices over the past months which forced it to increase local feed prices. In a further update, it said the local price increases were effective February 22.

NFM's grain supplies are primarily sourced in North America. But the company said global supplies were affected by China’s high demand for grain for the recovery of its hog sector which was affected by the African Swine Flu in 2018 and 2019.

“The Chinese government has made the recovery of this sector a priority for 2020 and 2021, and their high demand for grain has led to price increases of soybean and corn by over 40 per cent and 60 per cent, respectively,” NFM said.

In addition, it said dry weather in South America has negatively affected the region’s 2021 corn and soybean crops.

“These problems were exacerbated by labour strikes in Argentina in January 2021.”

NFM added that the covid19 pandemic affected international trade in general, and has driven up the cost of shipping goods.

“The demand for goods has also outstripped the availability of containers due to the large imbalance at present with supplies being shipped to China, and the delays in most major ports due to high shipping traffic is causing an escalation in freight costs in most sectors.”

No prices were included in the release. Newsday requested a listing but did not receive one up to press time.

In February, Trade Minister Paula Gopee-Scoon said she was hopeful that, as the worldwide demand for items such as steel and key ingredients used to make feed normalised, so would their prices.

But despite NFM's increases, vice president of the Association of TT Table Egg Producers Dennis Ramsingh says egg prices will not be affected.

Having already increased prices in February when Mastermix, a supplier of another brand of feed, raised its prices by ten per cent, he said they would lose too many consumers if this is done a second time.

He said 85 per cent of their farmers use Mastermix so he expects egg prices to remain the same.

“I can clearly come out and say this should not affect the prices of eggs because we already increased which we tried to withhold. But none of our members went straight to the ten per cent. We still absorbed some of it.

“If our food is not affordable to consumers, they just will not purchase it. And even though we went lower than the ten per cent, there are still effects where the demand has been reduced.”

In early February, Minister of Agriculture, Land and Fisheries Clarence Rambharat had told Newsday because feed importation was done privately, the private sector will determine the price structure.

“The import of grain, manufacture of feed and sale of feed are private sector/NFM activities. Grain prices and other costs are rising. Some will be passed to the purchasers and the minister of trade and industry can address the issue of prices to consumers.”

Back then, NFM had it was “monitoring the global pricing landscape."

Its chairman Nigel Romano had told Newsday, “We are investigating. When the investigation is complete, we will inform the population. This is not a sprint.”

Agriculture Society president Darryl Rampersad told Newsday he was not surprised by the announcement. He said it was inevitable because of the global challenges.

"One of the reasons this is happening now is because of the increase in freight costs. So, all over, what we are going to see is an increase in all the items, not just the livestock feed but the chemicals that the farmers are using as pesticide and fertilisers too.

"It also shows that we are not generating enough foreign exchange. They have no choice. We just aren't earning sufficient foreign income."

Rambharat shared similar sentiments saying the main issues are the rising grain prices and importers' access to foreign exchange. He told Newsday on Wednesday, "NFM is not a significant feed supplier to chicken producers but supplies feed to the other types of livestock. The 14 per cent price increase being passed on to feed purchasers now is only a portion of the price increases NFM and every other feed manufacturer faces, in particular on December 2020 shipments and shipments in 2021 so far. The other main supplier to the livestock market is Nutrimix and they have so far absorbed price increases and their prices continue to be lower than NFM's.

"The local poultry sector continues to work with the minister of trade and industry and Ministry of Finance on forex issues to stabilise prices and secure future grain shipments."