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February 23, 2017
 
China Feed Market Monthly Review: China's feed sector sees worst first-month performance in 2017
 
An eFeedLink Exclusive
 
 
No sector was spared from the decline adding up to a sharp 9% decrease in China's feed output in January.
 
 
Market Analysis
 

Table 1China’s feed production in January 2017

Region

Hog feed

Layer feed

Broiler feed

Aqua feed

Ruminant feed

Others

Total

Feed production change compared with previous month (%)

-7.30

-3.72

-15.25

-39.46

-5.84

-0.54

-8.87

eFeedLink’s statistics

 
Demands for livestock products were especially weak this January despite pre-Chinese New Year stimulation.
Meanwhile, the poultry sector was plagued by the outbreak of H7N9 bird flu, which closed down live poultry centres.
 
With livestock feed demand unexpectedly poor and aqua feed consumption falling to negligible levels, China feed producers manufactured 8.87% less than in December.
 
Extending late 2017's weakness, corn demand continued to slide during January as feed production failed to pick up. Moreover, farmers who were in need of cash during Chinese New Year eagerly lowered prices in a bid to clear stocks. Over the month, prices dropped 3.7%
 
Soymeal prices registered a slower fall of 1.8% compared with those of corn. After an initial fall in prices during early January, soymeal market strengthened partly due to stable domestic demand and partly the result of a stronger global soy market.
 
With aqua feed output falling significantly and piglet population limited, sales of fishmeal were sluggish, dragging prices down by 1%.
 
Despite lacklustre demand, whey prices remained stable over the month while import costs of US products climbed steadily.
 
Hog feed
 
Demand for pork was stable during January, but not as strong as expected in the period leading to the Chinese New Year. Feed producers were therefore reluctant to produce in excess, especially as the hog market is poised to stay soft after the holidays due to diminished animal inventories.
 
Consequently, January's hog fed production volume was substantially lower by 7.30% compared with December's. Complete feed production shrank by 7.39%, lifting prices by 0.65% amid limited supplies.
 
Layer feed
 
Egg prices tumbled over 8% during January against the expectations of market participants. Hence, producers held back production, resulting in an output decrease of 3.72% compared with the previous month.
 
Prices of complete feed rose by 0.75% while production dropped 2.31%.
 
Broiler feed
 
Broiler sector was hit the hardest in January due to the H7N9 bird flu epidemic. As the disease spread faster, 192 human infection cases were reported, out of which 79 patients died from the disease. Alarmed by the high infection and death rates, Chinese consumers cut the intake of chicken, particularly native breed broilers that are usually slaughtered in live poultry centres for the freshness of the meat.
 
The production of complete feed plunged 15.72% while producers slashed output in anticipation of poor demand. Prices rose 0.65% amid scarce availability.
 
Aquaculture feed
 
China's aquaculture production was limited to the southern coastal regions, which enjoyed warmer climates. However, inventories of marine creatures were so low that aqua feed output continued to fall another 38.46% to less than 200,000 tonnes in January. This was lower by 12% compared with January 2016.
 
Ruminant feed
 
Ruminants feed contracted by 5.84% during January, totalling slightly short of 850,000 tonnes. Compared with a year ago, production volume dwindled over 3%, an indication that China's ruminant sector is not thriving as well.
 


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