Asia-Pacific countries have an important potential in terms of the world compound feed sector. 466 million tons (36.8%) of world compound feed production, which was 1.266 billion tons in 2022, was realized by Asia-Pacific countries. 25.4% of the 28.156 feed mills in the world, i.e. 7.146, are located in this region. According to the report of Market Data Forecast, Asia-Pacific compound feed market estimated to reach US$233.34 billion by 2026.
By Derya Yildiz
The Asia-Pacific region is the first largest compound feed producer in the world. According to the Agri-Food Outlook 2023 report by Alltech, 466 million tons (36.8%) of world compound feed production, which was 1.266 billion tons in 2022, was realized by Asia-Pacific countries.
Comparing the years 2021 and 2022, there was a very small decrease of 0.5% in the total compound feed production of the region. 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.
In 2022, animal diseases were the main factor affecting compound feed production in Asia-Pacific. According to Alltech’s report, animal diseases have disrupted feed production in more than 80% of countries. Especially African swine fever (ASF) which has played a significant role in China, Indonesia, Malaysia, Myanmar, Nepal, the Philippines, Singapore, South Korea, Thailand and Vietnam.
FEED PRODUCTION BY COUNTRY
Asia-Pacific countries have an important potential in terms of the world compound feed sector. The region hosts the world’s largest countries in terms of both production and consumption. For example, China remains the largest feed-producing country in the world.
According to the Alltech report, China, which produced 268.3 million tons of compound feed in 2021, experienced a decrease of 2.8% in 2022 and produced 260.7 million tons. Despite the decline, the country managed to rank 1st in the world compound feed production in 2022.
The largest share in China’s compound feed production belongs to pig feeds with 101.4 million tons. It is followed by broiler feeds with 91.4 million tons. Layer feeds ranked 3rd with 30.5 million tons, while aqua feeds ranked 4th with 23.8 million tons of production.
The other major producer of the region, India, produced 44 million tons of compound feed in 2021 and experienced a decrease of 1.6% in 2022 and produced 43.4 million tons. Despite the decline, the country managed to rank 4th in the world compound feed production in 2022.
The largest share in India’s compound feed production belongs to broiler feeds with 15.8 million tons. It is followed by dairy feeds with 12.8 million tons. Layer feeds ranked 3rd with 11.9 million tons, while aqua feeds ranked 4th with 2.5 million tons of production.
Another Asia-Pacific country, which is among the top 10 countries in the world with its production amount, is Vietnam. Unlike many other regional countries, Vietnam managed to increase its production in 2022 at a remarkable rate. According to the Alltech report, Vietnam, which produced 20.9 million tons of compound feed in 2021, increased this rate by 27.7% to 26.7 million tons in 2022. With this production amount, the country became the 8th largest compound feed producer in the world in 2022.
The largest share in Vietnam’s compound feed production belongs to pig feeds with 11.2 million tons. It is followed by broiler feeds with 5.9 million tons. Aqua feeds ranked 3rd with 4.6 million tons, while layer feeds ranked 4th with 2.8 million tons of production.
These countries are followed by Japan with approximately 24 million tons, Thailand with approximately 20 million tons, South Korea with approximately 19 million tons and Philippines with approximately 14 million tons.
FEED PRODUCTION BASED ON TYPE
Broiler feeds are in the first place in compound feed production in Asia-Pacific on a species basis. The region’s total broiler feed production, which was 153.4 million tons in 2021, increased to 153.5 million tons with a very small increase in 2022. According to the Alltech report, broiler feed production decreased in China but increased in Vietnam. In China, production was affected by low market demands and high raw materials prices. In India, higher broiler feed prices continue to challenge the industry’s margins and limit capacity growth. Avian influenza affected India, Japan, Korea and Vietnam. Feed production in the Philippines increased significantly, due to a switch from pig farming to broilers because of African swine fever (ASF).
Pig feeds rank second in Asia-Pacific’s feed production. The pig feed production of Asia-Pacific, which was 143.5 million tons in 2021, decreased by 2.2% in 2022 to 140.4 million tons. The Alltech report includes the following information about the pig feed industry in the region: Vietnam pig feed production increased by 3.36 million tons in 2022. Production has recovered to nearly the same level it was before the region was challenged by ASF. As pork prices increase, more farms are investing in pigs. Low pork prices led to a decrease of 5.5 million tons in pig feed production in China. Because of a sharp increase in the number of breeding sows in 2021, pigs sold quickly in the first half of 2022, lowering the price of pork and leading to a decline in the number of live pigs. In the first eight months of 2022, consumption of pig feed decreased by about 8%, according to the China Feed Industry Association. Thailand’s pig feed production was reduced by 1.01 million tons because of ASF.
Layer feeds rank third in feed production in Asia-Pacific. According to the Alltech report, Asia-Pacific’s layer feed production, which was 76.5 million tons in 2021, decreased by 0.7% in 2022 to 75.9 million tons. According to the report, although the 2022 price for eggs was relatively high in China, the feed material cost (maize and soybean meal) was prohibitive to layer production. The number of laying hens in stock in 2022 decreased significantly compared with 2021. Layer feed tonnage was down 3%, or a reduction of 1 million tons. In the Philippines, layer feed production increased by 0.734 million tons — or 28% — because ASF prompted conversions from swine production to layer and broiler farms. India reported an 8% decrease in layer feed tonnage because many small layer farms shut down.
In the region, another important item on the basis of species is aqua feeds. According to the Alltech report, the scale of the region’s aquaculture industry expanded in 2022. The aqua feed production, which was 37.4 million tons in 2021, increased by 2.6% in 2022 to 38.3 million tons. With the recovery of China’s economy and improvements in living standards in recent years, the demand for aquatic products has been increasing. There was also feed production growth in the Philippines, Bangladesh, South Korea, Malaysia and others.
Dairy feeds, with a total production amount of 24 million tons, became one of the feed species whose production did not change in the region. However, there have been significant changes in dairy feed production on the basis of countries. For example, Vietnam reported a 16% growth in dairy feed production. Smaller increases were reported in India, China, Japan, Thailand, Malaysia, Taiwan and Mongolia. Nepal, Pakistan, Sri Lanka and Bangladesh reported decreases in dairy feed tonnage because of reduced milk consumption and reductions in breeder stock.
Beef feeds ranked 6th in Asia-Pacific compound feed production, and became one of the feed species with the highest production increase in 2022. According to the Alltech report, cattle feed production in the region, which was 13.8 million tons in 2021, increased by 3.4% to 14.3 million tons in 2022. In its report, Alltech makes the following notes on beef feed production in the region: feed millers in Bangladesh are focusing more on cattle feed, as the market for concentrate feed is growing significantly. As a result, that country reported a 56% increase in its beef feed production, from 0.261 million tons to 0.408 million tons. South Korea reported a 3% increase in feed production, from 4.06 million tons to nearly 4.2 million tons. China and Japan also reported small increases.
Some Key Players in Asia-Pacific Feed Industry:
ADM
Amul
ANCO
Betagro Group
Cargill Inc
Chareon Pokphand Foods (CP Group)
DaChan Food (Asia)
De Heus
East Hope Group
Feed One Co
Godrej Group
Haid Group
Harim Group
JA Zen-Noh
Japfa Ltd.
Kyodo Shiryo Company
Malayan Flour Mills
Marubeni Nisshin Feed Co.
Muyuan Foodstuff
New Hope Group
New Hope Liuhe
Nippon Formula Feed Manufacturing
NongHyup Feed Inc.
San Miguel Pure Foods
Shuangbaotai Group (Twins Group)
Tangrenshen Group (TRS)
Tongwei Group
Wen’s Group
West Hope Group (Sichian Tequ)
WH Group
Yuetai Group
Zhengbang Group
ASIAN-PACIFIC FEED INDUSTRY
In terms of the presence of feed mills, Asia-Pacific has an important place in the world. Because in 2022, 25.4% of the 28.156 feed mills in the world, i.e. 7.146, are located in the Asia-Pacific region. This number also indicates that 157 new feed mills have been put into operation compared to the previous year (2021). As in the rest of the world, the consolidation process continues in the Asia-Pacific region, but this process is slower compared to regions such as Europe and America. As the consolidation continues, the number of mills engaged in small-scale production decreases and the number of mills with higher capacity increases.
COMMERCIAL VALUE OF THE MARKET AND EXPECTATIONS
Research companies estimate commercial value of Asia-Pacific compound feed market between US$ 150 and 250 billion. For example; according to the report of Market Data Forecast, Asia-Pacific compound feed market was worth US$213.42 billion in 2021 and estimated to be growing at a CAGR of 1.8%, to reach US$233.34 billion by 2026. According to another report by Knowledge Sourcing Intelligence, the Asia Pacific animal feed market is expected to grow at a CAGR of 6.14% over the forecast period to reach a market size of US$214.546 billion in 2027 from US$141.349 billion in 2020.
Although different commercial values are announced for the compound feed market of the region in the reports of the research companies, what is completely certain is the potential of the region for the feed industry. Asia-Pacific accounted for the most extensive market and is anticipated to remain the leading consumer of compound feed in the coming years. Increasing incomes, high meat consumption, and high meat production are responsible for the region’s dominance.
According to the report of Research and Markets; in Asia, the livestock industry is an essential part of agricultural development that has grown remarkably in the last few decades. Large-scale livestock production helps meet the surging demand for livestock products. In addition, farm animals, like poultry, swine, cattle, etc., play an essential economic and social role in Asian countries.
With rapid economic growth, the demand for meat protein rose significantly in Asia, especially in India, Malaysia, China, and Thailand. The growing demand for meat protein increased meat production and consumption in the region, where the uptake of compound feed increased considerably and is anticipated to increase further during the forecasted period.
According to the Food and Agriculture Organization (FAO), in 2021, total animal meat production increased from 145.4 million metric tons in 2018 to 152 million metric tons in 2019 to meet the increasing demand for meat consumption in countries such as India, China, and the Philippines. Therefore, the surge in meat production and demand will help increase the demand for compound feed in the region during the forecasted period.
According to the report, China dominates the market in the region. The presence of large-scale poultry farms in the country, the increase in the animal population, the demand for affordable animal protein, and the continued focus of poultry producers on increasing productivity through a higher feed conversion ratio (FCR) by increasing the use of compound feed are the factors that are expected to increase the demand for feed production.
In China, consumption of poultry meat increased to 22,913 thousand metric tons in 2021 and is projected to increase to 23,311 thousand metric tons in 2028. This may lead to the growth of poultry in the country. According to Food and Agriculture Organization (FAO), poultry meat production increased to 24.6 million metric tons in 2021 from 20.6 million metric tons in 2018.
COMPETITOR ANALYSIS
According to the report of Research and Markets, Asia Pacific compound feed market is fragmented, with major companies holding a small part of the market share. Major companies concentrated on the acquisitions of small feed mills and increasing production capacity. Some companies increased their geographic presence by expanding their sales to other regions.
References:
1. Research and Markets; Asia Pacific Compound Feed Market – Growth, Trends, COVID-19 Impact, and Forecasts (2023 – 2028); April 2023; https://www.researchandmarkets.com/reports/5011896/asia-pacific-compound-feed-market-growth
2. Market Data Forecast; APAC Compound Feed Market Research Report – 2022 to 2027; March 2023; https://www.marketdataforecast.com/market-reports/asia-pacific-compound-feed-market
3. Knowledge Sourcing Intelligence; Asia Pacific Animal Feed – Forecasts From 2022 To 2027; Nov 2022; https://www.knowledge-sourcing.com/report/asia-pacific-animal-feed-market
4. 2022 Alltech Agri-Food Outlook, https://www.alltech.com/agri-food-outlook
