Think Grain Think Feed spoke with Dr. Aman Sayed, managing director of India and regional director of South Asia at Alltech, to get a better understanding of the trends
and changes in feed production in South Asia in 2022. Below are the excerpts and
survey report.
Despite significant macro economic challenges that affected the entire supply chain, global feed production remained steady in 2022 at 1.266 billion metric tons (BMT), a decrease of 0.42% from 2021’s estimates. The Alltech Global Feed Survey, which has been conducted annually for the past 12 years, includes data from 142 countries and covering more than 28,000 feed mills.
Top challenges to feed production*
Survey respondents identified the biggest ag-related challenges in their country. Inflation and the overall state of the economy, particularly the increased prices of raw materials, feed and food have been the biggest challenges affecting the agri-food sector in 2022, respondents said.
Supply chain disruptions also remain an obstacle for the agri-food industry across all regions.
Animal diseases have disrupted feed production in more than 80% of reporting countries.
Asia-Pacific region
Feed production in the Asia-Pacific region was flat. Reductions in China,
Pakistan, Thailand and Malaysia were offset by increases reported by Vietnam, the Philippines, Mongolia and South Korea. Despite the challenges faced there, Vietnam has been a growth market for feed in Asia.
Indian Feed Survey
India saw a decrease of 2.19% in poultry feed (for broilers, layers, and breeders)in 2022 compared to 2021, with a total production of 27.75 MMT. Chicken is the most affordable, acceptable, and available meat overall, but due to high energy and protein prices, and flat retail prices of chicken meat and eggs, the poultry sector observed a decrease in feed production. Dairy and aqua feed production grew by 2.29% and 7.49% respectively, compared to 2021, with a production of 12.92 MMT and 2.52 MMT respectively. Pet feed production, at 0.084 MMT, also increased by 18.06% in 2022 compared to 2021.
In the 12 years that the Alltech Global Feed Survey has been conducted, what major trends have you observed?
Significant consolidation: A few years back, the survey was conducted in 120 countries with 32,000 feed mills, and now, the survey includes 22 more countries but only 28,000 feed mills, illustrating a major consolidation-the highest of which is in the poultry feed sector.
Market potential: With an increasing population and increase in disposable income, animal protein consumption is expected to grow in Asia.
Highest performer: The Middle East market showed the highest growth (of 25%) compared to last year, which is due to an initiative by the government to expand broiler chicken production.
What factors have contributed to an increase in Indian dairy feed production?
Indian dairy feed production totaled 7.75 MMT in 2014. Now, as per the recent survey, it is close to 13 MMT, which shows significant growth. At present, the Indian milk industry is growing at a CAGR of 4-4.5%, while milk products are at a CAGR of 15-20%. Along with an increase in milk production, the high volatility of ingredient prices has also resulted in a shift to compound feed.
Market trends:
A shift from unorganized dairy farming to organized dairy farming.
The diversification of Northern and Eastern poultry feed millers in other segments, like dairy, aqua, and swine which is otherwise not the case in the rest of the country.
The largest feed production is coming from dairy cooperatives.
There is a major room for improvement in terms of quality feed production.
At Alltech, we are supporting dairy feed millers with an in-vivo fermentation model lab associated with Bangalore Veterinary College. The services are complimentary for cooperatives, milk producers, and other clients, as they allow to suggest better fodder or feed ingredients. The company is exploring new technologies and channels to increase milk production and also reduce methane emissions.
The Indian aqua industry has seen challenges in the last year, but the survey shows an increase in Indian aqua feed production. What are your thoughts?
In the first half of last year, the industry was in great shape, but in the latter half, it struggled due to various factors, like Ecuador getting a bigger share of the U.S. market. India is also facing competition from Vietnam, which is selling value-added shrimp products to the U.S. market.
Market trends:
Some shrimp farmers are diversifying with fish farming.
There is a huge scope of potential improvements in fish feed quality.
What are your observations on the Indian pet feed industry?
As pet ownership has increased significantly after the COVID-19 pandemic, so has the demand for pet feed. Many existing feed millers are diversifying into the pet feed sector, which has seen a growth of 7-8% CAGR in the last 3 to 4 years.
We have witnessed an unexpected decline in feed production in Nepal. Can you identify the reasons behind this?
Economic slow down, financial restrictions, less disposable income etc has led to a decline of 20% compared to last year. Total feed production for various species has been 0.825 MMT. A lower purchasing power has affected poultry consumption in the country. The local government is acting fast to control the situation.
In 15 years, the Nepal feed industry has come a long way, from its first pellet feed mill to more than 60 feed mills. Also, a lot of investment is going into developing the poultry infrastructure.
How has the economic crisis in Sri Lanka impacted agribusiness there?
Economic crises resulted in a lower feed production of 0.934 MMT in 2022, which is 1.632% lower than in 2021. It is quite challenging, as the whole country has gone through 70% inflation. As the inflation rate improves on a month-to-month basis, the economy is also improving, albeit at a slower pace. The main reasons for this issue are the effects of the pandemic, its impact on tourism, and the improper implementation of the organic farming. Alltech Sri Lanka was committed to support the feed producers in these challenging times. With ongoing progress, it should be in a better condition (or at least be normalized) in the next 18-24 months.
What are your views on the feed industry in Bangladesh?
I am quite optimistic. As disposable income increases in Bangladesh, the meat consumption will increase. Although growth was flat last year, with only around 0.23% and a total production of 6.572 MMT, in the coming years, we will see significant growth prospects, especially in the dairy sector. As of now, the country is importing significant amount of milk and milk products and the government is very much inclined to boost the local dairying and local production.
A big jump was also observed in dairy feed production. Aqua feed is expected to grow with the ongoing Vannamei trails where I expect there will be success similar to what was seen in India. Production of poultry and Sonali (local breed) feeds will also continued to grow, as poultry feed millers are diversifying into the segments, like dairying feed and farming.
Vietnam entered the top 10 feed-producing countries in 2022. What are your thoughts on that development?
Vietnam experienced a great recovery in its feed tonnage in 2022, entering the top 10 ahead of Argentina and Germany. The culture of that country makes it a unique model. Women’s involvement in agriculture is quite high there, and all segments are growing. The results speak for themselves; broiler feed is up 178%, pig feed by 48%, layer feed by 40.9%, and dairy feed by 16%. The “ease of doing business” initiative by its government has encouraged many international companies to set up their manufacturing facilities in that country. Its geographical position is another advantage. Alltech opened its eighth global mineral plant in Vietnam.
According to the Global Feed Survey, India is in fourth place, with 43.360 MMT-but Brazil, which came in third, has almost double production, at 81.948 MMT. Where do you see the Indian feed industry going in the coming years?
In 2014, Indian feed production totaled 29 MMT, but in the recent survey, it totaled 44 MMT, equaling a significant growth of 42.8% in the last eight years. Various factors-like population growth, a young population, disposable income, etc. have contributed to this growth. I foresee a similar growth pattern in the coming years, and we may even beat Brazil in a few years.
Protein consumption in India
If we go by the rule of thumb 1 gm/kg of protein per body weight, even then, the current protein consumption of adults is 0.6 gm/kg of weight, which means that a 40% gap must be filled.
Further more, the amount of protein coming from various animal sources in India is quite low.
This shows the huge scope for Indian market.
What are your suggestions how we can contribute to industry growth?
All stakeholders should come together to understand supply and demand, which will make growth profitable for producers as well.
The industry has done a good job in the backward stream, but now, it should focus on forward marketing.
Some percentage of profits should be invested in R&D, which is the backbone of innovation.
