vegetable oil companies based in Hamburg, Germany and subsidiaries of the Carroux Group (and thankfully abbreviated, respectively, to NFC and NVC!) This meant that the vegoils marketing arm was extended to cover the animal feed sector in Germany as well as the UK. Today, overall, United Molasses Group Ltd, which is the holding company for all the above, is the world leader in international molasses distribution and marketing. Its companies have a combined turnover of £200 million and a global staff of 200. The big difference between being part of a PLC like Tate & Lyle


and now being owned by a family company like W&R Barnett (albeit one with a turnover in excess of a billion pounds) is that the chain of command is much shorter and consequently more nimble on its feet, which means investment decisions can be made much more quickly. On the ground though, the business continues to operate in much the same way as before. The biggest usage of internationally-traded molasses, accounting


for 58% of market share, is in animal feed where it is used in the production of compounds, blends, coarse rations, buckets and blocks and on-farm mixes. 37% is used as a substrate for fermentation products, of which the largest by volume is the production of monosodium glutamate, followed by ethanol (both potable and non- potable), yeast and lysine. The remaining 5% of use is in industrial applications such as the production of briquettes of coal, steel and rock, as an agglomeration aid in the manufacturing of tyres and dyes, and in soil and water treatments in fertilisers and anaerobic digesters. When it is used in animal feed, whether by compounders or


on-farm, molasses is usually supplied in a blended product. When sugar cane is crushed, the juices are extracted and the sugar taken out, what is left is called blackstrap molasses. Even this product can vary enormously depending on country of origin and the efficiency of extraction process; it will differ in quality, dry matter, sucrose to inverts ratio and viscosity. “Sometimes it’s thin enough that you could probably swim in it, other times it can be so viscous it would be almost possible to walk across,” is the way that Simon explains the extent of the difference. Another form of molasses is called refinery cane molasses, which is what remains to be recycled after the raw sugar extracted from the cane is melted down to produce white sugar at a refinery. Refinery cane molasses is used in the production of brown sauces, brown pickles and Worcestershire sauce; significant quantities are imported by UM into Dagenham where it is stored and traded. A by-product of the use of molasses in the production of


monosodium glutamate, lysine, alcohol and yeast is Condensed Molasses Solubles or CMS, which is made by condensing the very low dry matter liquid fraction which remains after fermentation. CMS is blended in various proportions with blackstrap molasses in ratios of, for example, 70:30, 80:20 or 90:10 molasses to CMS, depending on the requirement of the end-user. In recent times, when the price of molasses has been higher than historically as a result of world market dynamics (of which more later) and consequently inclusion levels in feed have been lower, those compounders who can handle a high molasses blend or even straight molasses have specified it, in order


to retain the benefits of its inclusion (such as enhancing flavour and pellet quality) even at these lower percentages in the mix. Other liquids which can be blended with molasses include pot


ale syrup (a co-product of the whisky distillery process) glucose and vegetable oils, depending on what is required by the customer, with the farm market in particular being full of a diverse range of speciality products. Molasses blends can help with the appearance and aroma of coarse rations, they can help to reduce dustiness, they can be included in pet foods; in one product, urea is bonded to the sugar molecules in order to afford it a certain degree of protection through the rumen. All UM sites in the UK and Ireland are UFAS accredited (which is appropriate since mixing more than one ingredient to produce a feed for animals is by definition a compound feed) as well as FEMAS accredited for straights. Molasses is one of the few products which is truly physically-


traded – there is no futures market in molasses. It is bought FOB from the country of origin and shipped into terminals in the countries and regions where it is used. There is getting on for 60 million tonnes of molasses produced annually, of which about 85% is cane and 15% is beet molasses. When Simon joined UM back in 1995, the equivalent total figure for production was closer to 40 million tonnes. However, back then 7 million tonnes was traded internationally, whereas today only about 3 million tonnes of cane and half a million tonnes of beet molasses are traded. What this leads to is higher prices and greater volatility – like throwing a rock into a puddle, the deeper the puddle, the smaller is the wave the rock creates. The reduction in the volumes traded is analogous to a reduction in the size of the puddle, meaning the same sized rock will make a much bigger splash. The biggest demand for molasses on the international markets is


from Asia, Europe and the Americas, with the largest exporters being India, Thailand, USA, Pakistan, Guatemala, Australia, Egypt, the Philippines and Fiji. Some countries, such as Brazil, China and Mexico, are very large producers but also have strong domestic markets so do not feature as highly on the list of exporters. So why, I asked, the marked drop in volumes traded and rise


in price and volatility? The single largest cause, I was told, came when Pakistan was granted tariff-free access to Europe for ethanol, partly in recognition of the costs it was bearing in playing its role in the international War on Terror. This led to an increased capacity for ethanol production in Pakistan meaning that molasses changed from a relatively low value co-product to having a higher value locally related to alcohol production. As a consequence, exports from a country which had been in the region of one and a half million tonnes fell away to just a few hundred thousand tonnes. At about the same time, the sugar regime in Europe was changed, leading to a fall in beet production in countries such as Italy, Ireland and Greece. Volatility can manifest as price falls as well as price rises, of


course; for example, a modest increase in the volume of European beet sugar production expected later this year based on a rise in the area planted has kept cane prices soft. While beet molasses cannot always substitute directly for cane molasses, because its different profile means


FEED COMPOUNDER JULY/AUGUST 2018 PAGE 27


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60  |  Page 61  |  Page 62  |  Page 63  |  Page 64  |  Page 65  |  Page 66  |  Page 67  |  Page 68