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Aquaculture

August 21, 2017
 
China Feed Market Monthly Review: Strong growth in aquaculture sector fails to lift China feed production in July  
 
An eFeedLink Exclusive
 
 
Livestock feed production diminished amid slower feed intake, decimating China's July feed output.
 
 
Market Analysis
 

TableChina's feed production in July 2017

Region

Hog feed

Layer feed

Broiler feed

Aqua feed

Ruminant feed

Others

Total

Feed production change compared with previous month (%)

-0.07

-3.91

-5.89

10.57

-4.9

-0.39

-0.62

eFeedLink’s statistics


Only aquaculture sector expanded in feed production, but by a slower pace of 10.57%. Hog feed output was practically flat, inching down 0.07%, while the total number of hog remained low and feed intake shrank under the hot summer climates. Layer and broiler feed consumption decreased as well as the appetite of chickens was poor due to the hot climates. Hence, feed output slid 3.91% and 5.89% respectively for the layer and broiler sectors.
 
Overall, China's feed production volume for July shrank by 0.61% on-month, totaling 14.16 million tonnes.
 
The costs of feed ingredients increased during July. Corn prices remained firm, as supplies of quality grains dwindled even as the state auction of reserved corns continued to provide the market with old grains. Prices increased almost 3% over the month.
 
Meanwhile, soymeal market strengthened, partly due to a stronger global soy futures market, and partly because feed millers restocked depleted inventories. Compared with June, soymeal prices were higher by 3.5% in July on average.
 
Peru failed to meet its fishing quota by end of July, hence perking up Peruvian fishmeal prices. This helped to prop up the prices of fishmeal in China by 2%.
 
Prices of feed additives, particularly those of vitamin products, were mostly stronger amid tight availability. Calcium phosphate prices jumped a whopping 54% due to lack of supplies. Prices of vitamin B12 and vitamin B2 surged 15% and 10% respectively due strict pollution controls. Biotin prices rose by 6% whereas those of vitamin D4, which surged 450% in June, increased by a modest 8%. Prices of vitamin C, vitamin K3, niacinamide and choline chloride were higher by 1-3% over the month.
 
Amino acids prices were stable to higher. Prices of methionine increased most significantly, by 8% while lysine and tryptophan prices rose by 5% and 2% respectively. Threonine prices stayed flat during July.
 
Hog feed
 
Hog inventories increased marginally in July due to low piglet production. Meanwhile, the unusually hot summer climates disrupted the metabolism of animals, weakening the immunity, which resulted in higher infection rates. Conceiving rates of sows were low and piglet mortality rates increased due to insufficient milk from lactating sows. All these factors worked to limit the feed consumption in July, prompting feed miller to cut output, albeit at nominal 0.07%. 
 
Concentrated feed output registered a prominent fall of 3.86% whereas premixes production shrank 0.80%. Feed millers manufactured 0.68% more complete feed, which was barely enough to hold the monthly output stable. Prices of complete feed remained unchanged.
 
Layer feed
 
Feed intake of layer dropped due to the hot summer weather while layer inventories dwindled by 1% amid inadequate pullet supplies. Although egg prices strengthened over the month, profit margins of layer farming remained low, hence dampening farmer's confidence to increase feed stockpiles.
 
Feed producers cut production for the sector by 3.91% as a result of reduced demand. At 1.83 million tonnes, layer feed output was 2.5% lower than July 2016.
 
Complete feed output dipped 4.16% while the production of concentrated feed and premixes slid 3.75% and 1.30% respectively. Amid higher ingredients costs, prices complete layer feed increased 0.76%, averaging RMB2,640/tonne in July.
 
Broiler feed
 
Broiler feed consumption fell as well due to the summer heat. This, in conjunction with a flat inventory, prompted feed manufacturers to slash production by almost 6% in July. Compared with a year ago, broiler feed output was 13% lower at 3.19 million tonnes.
 
Complete feed output shrank 6.11% while prices strayed unchanged at RMB2,980/tonne. Premixes production dropped substantially as well by 5.47%, whereas that of concentrated feed inched lower by 0.62%.
 
Aquaculture feed
 
Aqua feed output rose by 10.57% in July, reaching 2.36 million tonnes. Year-over-year, this was more than 2% higher. However, accounting for less than 20% of China’s overall feed production, aqua feed output growth could not lift July production despite its robust growth.
 
The strong expansion of aqua feed production was mainly driven by the 11% rise in complete feed volume. Concentrated feed output growth was negligible whereas premixes production volume actually started to shrink in July.
 
Ruminant feed
 
China produced 4.90% less ruminants feed in July with consumption poor. This was nearly 10% lower than July 2016's ruminants feed production.
 
 
Market forecast
 
China's weather temperatures are expected to rise further in August, affecting the feed intake of animals. With feed intake low and animal inventories limited, sales of hog and poultry feeds are poised to remain slow. Aqua feed production will continue to expand as aquaculture thrives under the hot summer climates. However, growth will maintain at around 10% as aquaculture production peaks. China's feed production is therefore expected to record marginal growths in the best scenario.
 


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