China seeks center stage in global feed industry

As parts of Asia's population continue to experience greater wealth, the demands of consumers begin to evolve. Increased consumption of animal products generally follows an increase in household income and along with it, a need for more self-sufficiency in livestock production goes hand-in-hand with a growth in feed markets. China's feed market is poised to take over the United States in size sometime in the next two years if forecasts by the China Feed Industry Association are on the mark. Feed sales in China are predicted to rise to US$50 billion by 2010, which would be a growth of $10 billion in four years.

Expansion varies by region 

Feed International  reported in January that industrially made compounds were estimated to represent about 63 million tons of the total feed volume recorded in China for the first three quarters of 2007. Sources have reported to Feed International that annual production seems to have increased by about 3 percent to 84 million tons this year, from 81 million tons in 2006, despite the loss of animal inventory caused by poultry and pig diseases. Sources tell Feed International  the losses of livestock from disease has occurred primarily in backyard sites that were not using feeds from an organised supply and thus do not have as great an impact on the feed market. Figures from the China Feed Industry Association in 2006 showed 111 million tons of all feeds produced, with 73 percent as compounds from industrial mills.

The rate of expansion in China's feed market has varied by region, depending on the dominant livestock practice. Most of the growth in 2007 occurred in the central and north-east regions, according to the China Feed Association. The bulk of the demand comes from the poultry and aquaculture sectors rather than pigs or cattle, with China's poultry industry principally located in the south-eastern coastal region. Most of China's pork is produced in the central part of the country, while dairying is found mostly in the northern provinces. Feed International  has reported that approximately one-eighth of all feeds produced industrially in China have been made in mills in the southern province of Guangdong, where the market usually is divided into 55 percent poultry, 23 percent pig and 21 percent aquafeeds. But change for the pig industry may be on the horizon as officials in the Dongguang city zone along the banks of the Pearl River have declared their intention to ban pig units from the area due to the concerns over increasing environmental pollution.

China's animal feed industry is valued currently at about US$40 billion and has been growing at a rate of about 15 percent per year in line with the growing demand for meat products.