Lysine is a type of amino acid that is vital for the both humans and animals. However, human/animal bodies are not capable of producing lysine naturally which is expected to increase the demand for lysine. It is essential for proper growth and development of monogastric organisms. Being a part of many metabolic processes, lysine plays an important role in animal nutrition. Microbial fermentation of sugar substrate is the industrial method of lysine production. However, feedstock supply shortage has been forcing manufacturers to consider the potential of other raw materials such as cassava and methanol for production of lysine.
Growth in global meat consumption especially in emerging countries with booming populations and increased wealth will drive the growth of lysine in animal feed market. To meet these requirements, animal feed will be required for quick growth of animals. This is well supported by lysine as it helps animal gain weight faster by drawing nutrients from limited feed and still be delivered as quality meat. Bonemeal and bloodmeal bans in many regions coupled with increasing feed prices have helped in the development of global lysine market. This has also resulted in increased lysine use as a substitute in animal feed and ultimately increase demand for lysine. Demand is inclined towards lysine as it provides an economical and efficient substitution for both farmers and animals from costly feeds and has less environmental after-effects concerning nitrous excretion. Owing to growing lysine demand, it is unable to make available sufficient raw material to produce to meet the demand, turning it into a sellers’ market. Tight feedstock supply leading to increasing prices is expected to affect demand, and government intervention may be encountered, affecting the profitability of market participants. This situation can also lead to consideration of other available options of feed amino acids feeds like tryptophan, methionine, threonine, and others. Manufacturers have been focusing on increasing their R&D expenditures to maximize capacity and minimize costs to overcome such challenges. In addition, the slump in demand for meat due to outbreaks (avian flu, swine flu, etc.) can affect the demand of lysine in sluggish feed market.
Animal feed emerged as the largest application segment for lysine and accounted for 92.4% of total market volume in 2013. Along with being the largest market, animal feed is also expected to be the fastest growing application segment for lysine at an estimated CAGR of 6.2% from 2014 to 2020. This can be attributed to the low cost, and efficient substitution lysine provides in place of costlier crude proteins like soybean and corn.
In the year 2013, about 58% of total volume consumed was used for swine/hog. In addition to being the largest livestock consuming lysine, swine is also expected to be the fastest growing livestock for lysine at an estimated CAGR of 6.5% from 2014 to 2020 Growing demand for pork meat mainly in China is expected to boost demand for lysine in swine/hog.
In 2013, China was the largest consumer of the lysine market with a 31% share of total lysine consumed. In terms of consumption, China was followed by Europe and North America. China along with being the largest market is also expected to be one of the fastest growing markets for lysine at an estimated CAGR of 7% from 2014 to 2020. Growing meat consumption in Brazil and Argentina is expected to fuel demand for lysine in Latin America.
The lysine market is concentrated with top 4 manufacturers namely Global Bio-Chem Tech, Ajinomoto Ltd., Cheil Jedang Corp. and Archer Daniel Midland (ADM) capturing over 60% of the market in terms of production capacity. Other participants accounting for 40% share include Evonik Industries, COFCO Biochemical (Anhui) Co. Ltd., Shandong Shaouguang Juneng Golden Corn co. Ltd., Changchun Dacheng Group and so on.
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