May 23, 2016

 

Global Feed Summit 2016: Asian feed market rising as meat consumptions grow

  

 

The second Global Feed Summit in Bangkok, Thailand, happened on May 16-17 and congregated key industry figures in the value chain to discuss strategy and thoughts on the feed industry's demand trends.

 

Chris DeLavigne, KPMG Services' principal (strategy) opened the event which saw a gamut of related topics presented over the next two days including DeLavigne's "Investment strategy and business model to succeed in a competitive feed industry". Along with his presentation, other speakers expressed the opinion that the feed market is expanding in Asia as higher meat consumptions occur.

 

DeLavigne revealed the world's animal feed "eco-system" - consisting of commercial animal feed, meat processing, livestock farming and various other sectors - at an estimated value of over US$13 trillion, based on an Alltech feed survey for 2013-15.

 

The feed industry, DeLavigne said, continues to grow at "fairly healthy" rates of 1-2% per annum. By 2014, the world market size of feed production had reached 980 million tonnes, with Asia as the top region taking 36% of market share.

 

A crucial factor to this uptrend is the rise of China's pork consumption, driven by an increasingly affluent Chinese middle class and the modernising livestock industry.

 

DeLavigne also pointed to the aquaculture market which demonstrated "strong growth" as feed for the sector rose to 41 million tonnes in 2014 from 34 million tonnes in 2012. In this market alone, Asia represents 90% of the overall global share.

 

China - as shown by Dr. Julian McGill, LMC International's Head of Special Projects, during his "Global Aquafeed Market Outlook & Trends" presentation on the summit's second day – was ranked the biggest market for aquafeed last year.

 

While the world aquaculture industry underwent a steady growth towards 2015, the wild capture of fish stagnated due to the declining oily fish capture. This led to a series of drops in fishmeal production amounting to around five million tonnes by 2014. Given the tighter supply, fishmeal prices spiked to about more than US$1,500/tonne in the same year.

 

As for Southeast Asia, Indonesia, Thailand and Vietnam were the highest feed-producing nations, at 20 million tonnes, 16.9 million tonnes and 4.1 million tonnes, respectively in 2015. This data was shown by Kevin M Roepke of the US Grains Council during his presentation, "Global feedgrains outlook: 7 megatrends impacting agriculture".

 

Rising feed productions are also accompanied by more meat consumptions in Southeast Asia, particularly Malaysia, Vietnam, Thailand and Indonesia where pork and poultry are the most popular choices. Consumptions in these countries are expected to grow towards 2024.      

 

In the "Gain the comparative advantage for the AEC-TPP, Thailand experience" session, Dr. Kij Soonthorn of Alltech Thailand emphasised the use of cassava (tapioca) as an alternate animal feed. He touted the advantages of the crop such as its low pH, easily digestible starch and thus improvement to animal intestinal health. Cassava's other benefits - including introducing a low-cost feed and reducing medical treatment costs - were also highlighted by Dr. Soonthorn.