May 11, 2007

Feed output up 7 percent in China's Guangdong province

Guangdong province's feed production for the first quarter this year increased 7 percent on-year to 2.72 million tonnes.

Out of the total, compound feed output increased 7 percent on-year to 2.6 million tonnes while feed concentrate production fell 9 percent to 40,000 tonnes. Premix production rose a slight 1 percent to 70,000 tonnes.

Pig feed accounted for 730,000 tonnes of the total, falling 4 percent on-year, whereas layer feed rose 10 percent to 260,000 tonnes. Broiler feed saw the largest increase of 16 percent to 1.61 million tonnes whereas aquaculture feed saw the steepest drop of 5 percent to 270,000 tonnes.

However, as the weather gets warmer, aquaculture production is expected to rev up, especially as demand for shrimp feed is seen to rise.

One major influence seen affecting feed consumption this quarter was the higher corn and soy prices. A second factor was the increased industrialization and consolidation in the livestock industries and the rise of more integrator operations that drove development in the industry and feed production.

Among the bigger feed producers, Dongguan Fanling Co. has geared up for full production this year and achieved 30,000 tonne production this quarter, accounting for a quarter of Dongguan city's feed production. Having being acquired by Haida Group in March, its ample capital is expected to put it in good standing for this year's operations.

Another major feed producer, Nanbao Group increased production 9 percent whereas Wenshi Group, a major integrated operation in China, registered an increase in broiler feed production by 18.22 percent. Tongwei, one of the largest feed producers in China, also maintained stable production in Guangdong province

A third trend seen this quarter is the strong showing made by the "second tier" areas: five of the top ten cities saw feed production increase by more than 20 percent while the two top cities saw declines.  Feed production from Yunfu City (the third largest feed producer in the province) grew 22 percent on-year the first quarter whereas feed production from the top two cities of Foshan and Guangdong saw a drop in production of 3 percent and 1 percent respectively. 

Analysts forecast a brighter outlook ahead for Guangdong's live hog production and stable growth in poultry production. These developments, together with aquaculture which has just entered its peak production, are expected to drive feed demand.

Feed production changes on-year in top producing cities in Guangdong province: