Aquafeeds in 2019: Pulled by market demand

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Increased feed volumes across species and countries in combination with more investments in supporting farmers

By Zuridah Merican

As fish and shrimp production rose, so did feed volumes in most major markets; in 2019 fish feed volumes increased by as much as 30% and shrimp feed at 26%. The downside is that feed production capacity continued to increase, exceeding demand in most markets and competition remained tough. It was a push and pull effect as feed millers continued to support the farming industry in various ways to enhance success in farming: from laboratory services for diseases and water quality management, supply of quality fry and post larvae, holistic solutions to increase survival rates, feed management with digital innovations and auto feeders, to handling and processing harvests. Use of functional feeds, already common in China, had begun to spread to other countries.

Demand and supply

In terms of feed volumes, there were increases across species and countries (Table 1) but notably, the increases have been in freshwater fish feed markets. China showed more carp feed sales, led by that for the grass carp as more farmers began to use commercial feeds (see page 31). In Bangladesh, the total demand for commercial aquafeeds increased by 36% to 1.5 million tonnes, of which 90% was fish feeds and the remaining 10% for the marine shrimp and freshwater prawn. A surge in demand in commercial feeds for the pangasius, tilapia and Indian major carps was led by better prices for farmed fish when the supply of the preferred hilsa fish went down. Ajaya (2020) reported that fish feed production in India increased by 30% over that in 2018 (Ajaya, 2020). 

In Vietnam, good sales of pangasius fillet in the US and China markets helped to stabilise ex-farm prices of the pangasius to VND38,000/kg, raising production to 1.29 tonnes and total feed requirement of 2.06 million tonnes. Another estimate was at 2.5 million tonnes of pangasius feeds. Feed conversion ratios (FCR) ranged from 1.6 to 1.9. Unfortunately, prices dropped in the latter part of 2019 to VND18,500/kg. While demand for snakehead feeds rose 100% in China, there was a decline by 20% in Vietnam, the latter presumably because of lower ex-farm prices.

Indonesia’s fish feed market, dominated by that for the Clarias catfish, tilapia and carps, showed a marginal increase (4.4%) to 1.44 million tonnes (GPMT, 2020). The demand for marine fish feeds continued to drop as farms faced marketing problems with the ban on direct sales of live fish to Hong Kong via well- boats. Total aquafeed production in Thailand was over 1 million tonnes in 2019, a marginal increase over 2018 at 0.8%. More feeds were used for the tilapia and Clarias catfish in 2019. 

Except for China, an increase in shrimp production (with better control on productivity and disease management, lower stocking density and higher survival rates, as well as the establishment of new farms), led to a higher demand for shrimp feeds. The highest increase in demand was in Vietnam at 26%, Thailand at 16%, Indonesia at <10% and India at 5%. However, according to industry, the large increase in Vietnam was becuase production in 2018 was underestimated. Most feed millers supported the industry with healthy post larvae and feed management protocols and provided complete solutions to improve survival rates along the production chain. In the Philippines, the shrimp feed market was estimated at 100,000 tonnes in 2019, of which some 50% was imported. 

 
  Fish feeds Shrimp feeds Marine fish feeds
China 16,700,000 1,700,000 1,600,000
Vietnam 4,500,000 1,000,000 60,000
Bangladesh 1,350,000 72,000
Indonesia 1,443,945 352,248 16,500
India 1,200,000 1,300,000
Thailand 580,000 478,000 32,800
Philippines 650-750,00 100,000  
Malaysia 80,000 105,000 50,000

Table 1. Industry estimates on feed demand in 2019 (tonnes) in selected countries. Notes: Production in China. Vietnam-vannamei: monodon feeds at ratio 6:4, 2-2.5 million tonnes of pangasius feeds; Bangladesh- monodon shrimp feeds, calculated at FCR 1.8 for 40,000 tonnes shrimp production; Indonesia-data from GPMT; fish feeds mainly for Clarias catfish (35%), common carp (25%) and tilapia (25%); India- excludes an estimated 60,000 tonnes of imported shrimp feeds, mainly from Vietnam; Thailand-fish feeds are mainly for the tilapia (31%) and Clarias catfish (21%); Malaysia-includes an estimated 31,000 tonnes of imported shrimp feeds and 20,000 tonnes of marine fish feeds. chain. In the Philippines, the shrimp feed market was estimated at 100,000 tonnes in 2019, of which some 50% was imported.

Industry trends

In Bangladesh’s fish feed market, out of the 1.35 million tonnes in 2019, 70% were floating feeds for the pangasius, tilapia and Indian major carps. In mid-2019, tilapia ex-farm prices rose to USD1.5/ kg, and pushed up fish production and demand for floating feeds. When ex-farm fish prices were lower, farms shifted to feeding fish with cheaper sinking pellets. A weak US market for tilapia affected producers in China, but 2019 production was higher at 1.76 million tonnes than in 2018 as reported by Ragnar Tveteras at GOAL 2019. In Vietnam, the government has targeted tilapia as a potential species for export, but industry commented that it is not as popular with investors as it lacks industry chain–quality fry, culture technology and processing to compete with China. Nguyen Anh Tuan, Deputy Director General at Mavin Aquaculture said that the company has developed a new type of feed, customised especially for tilapia in cage culture which is rapidly expanding in reservoirs in Vietnam.

Jeff Jie Cheng Chuang, General Manager, Sheng Long Bio-Tech International, said, “The red tilapia is popular in Vietnam and uses 300,000 tonnes of feeds. To jumpstart farming, we have imported broodstock and started supplying fry. We also bought back the harvest for processing for export to the Middle East.” Sheng Long along with Uni-President Vietnam and CP Vietnam are leaders in the tilapia feed market.

A challenge in Indonesia, is to meet market demand on acceptable feed prices. At the same time, “The competitive landscape is changing with the entry of new foreign companies with lower prices and longer credit terms. We expect disruption in industry causing the oversupply of fish and shrimp feeds, when these new companies launch new products into the Indonesian market next year,” said Haris Muhtadi, Chairman at the GPMT and Associate Director at PT CJ Feed and Livestock Indonesia during a presentation at TARS 2019. Despite higher production costs, feed millers have agreed not to increase prices as farms faced low shrimp prices and lower profit margins.

Fluctuations in raw material and fish meal prices were compounded in 2019 by the depreciation of local currency against the US dollar around Asia. However, the impact in India was very minimal as Indian feed millers used >95% local raw materials such as fish meal, corn and soybean meal, and deoiled rice bran (DORB). In terms of his top three challenges in 2019, Seshu Akkina, COO Deepak Nexgen Feeds prioritised fluctuations in raw material prices, fish meal availability and procurement as well as labour issues. The problem with fish meal availability was because of the 40-day strike against GST by fish meal processors. “Actually, the cost of production has increased in the last 3 years as fish meal and soybean meal prices increased continuously. In January 2020, many feed millers increased shrimp feed prices by about INR6/kg after 4 years of no price increase.”

Seabass and marine fish feeds

Uni President Vietnam has been exporting its seabass feeds to Thailand for several years now. “Thai seabass farmers growing table size and jumbo size fish prefer our feeds as they get good FCR and flesh quality. This is a testimony on the quality of the feeds,” said Wei Che Wen, Sales Manager. Imported marine fish feeds from Uni President and Sheng Long in Vietnam as well as from feed mills in Taiwan constituted a major portion of feeds used in the farming of the snappers, groupers and seabass in Malaysia. The 50,000-60,000 tpy marine fish feed market has six local feed millers, led by Star Feed Mills.

With the beginning of the diversification into seabass farming in India, Dr S Kandan at the Rajiv Gandhi Centre for Aquaculture, has made an estimation on the current feed demand based on wild catch and hatchery production of 5 million fry. “We calculated that based on a 40-45 days nursery rearing of seabass, from 1.2g to 10g, we need 2,000kg of feeds. Then for the grow out culture over 320-325 days from 10g to 1.2kg fish, we postulated a demand for 725 tonnes of feeds and rising to 1,000 tonnes by 2023. Presently, we use locally produced marine fish feeds by Growel Feeds as well as imported feeds from Skretting, Uni President Vietnam and Lucky Star for larval rearing of seabass, as well as for the pompano and cobia.”

Haris also reported on the situation in Indonesia. “We changed the minimum crude protein level for milkfish and for some freshwater and brackish water fish species, from 18% to 15%. This is profitable for the feed millers and it helps farmers farming milkfish in semi- intensive and traditional systems. Previously, under the Indonesian National Standard (SNI), 15% crude protein feeds were not allowed for distribution in the Indonesian market.”

Shrimp feeds

“The better uptake of auto feeders has helped shrimp farms with better feed management,” said Ravikumar Bangarusamy, Technical General Manager, Growel Feeds at TARS 2019. The use of sensor- based auto feeders in some corporate farms has helped to reduce organic loads. Data from his R&D work comparing pelleted feeds versus extruded functional feeds in about 1,000 ponds across India for the past 3 years at various locations, at different salinities and over winter and summer, showed better survival rates by 24%, better average daily growth (ADG) by 30% and improved FCR by 21% with extruded feeds.

In Asia, there is only 5% of extruded shrimp feeds versus 95% of Bangladesh, Nourish and Chuyya Agro) had 40% market share in 2019. On the contrary, in India’s 30-feed mill (<25,000-65,000 tpy) strong industry, the top five shrimp feed millers (Avanti Feeds, CP India, Growel Feeds, Deepak Nexgen and Dewi Seafoods) had almost 76% of the market share in 2019. In the fish feed market, five fish feed millers (Indian Broiler, Deepak Nexgen, Growel Feeds, Godrej and Uno Feeds) had a 40% market share. In Indonesia’s shrimp feed market, the top four market leaders (CJ, CP Prima, Japfa Comfeed and Matahari Sakti) accounted for 70% of the production and in the fish feed market, three market leaders (Sinta Prima, CP and Japfa Comfeed) produced 65% of the volume.

“In for Vietnam’s shrimp feed market, there are four market leaders (CP Vietnam, Grobest, Sheng Long and Uni President) contributing almost 78% of the production. But only two feed millers (Proconco and Viet Thang) contributed equally 25% each to the pangasius feed market in 2019. Their production was at full capacity,” said an industry source.”

Fish meal and alternatives

2019 was a watershed year with more certainty that many of the fish meal and fish oil replacements in Asian markets work. Dr Jarin Sawanboonchun said that current shrimp formulations contained 10-12% fish meal. Undoubtedly, vannamei shrimp requires less fish meal but for many shrimp farmers, fish meal is the gold standard and farmers insist on knowing the inclusion rates and look for dark brown pellets. With R&D, industry in Thailand is on track towards zero-fish meal diets and seek alternative protein sources and additives when feeds have low fish meal inclusion rates.

At TARS 2019, Indonesian farmer Rizky Darmawan, PT Delta Marine, said that he prefers using low fish meal feeds (finisher at 30% CP) which are fermented prior to use and fed over 24 hours with autofeeders at his vannamei shrimp farm. In his view, aside from competitive pricing, feeds should deliver his KPI of 0.3g ADG.

In China, with supply and price limitations for fish meal, feed millers have been adjusting inclusion rates. “After several years of education and performance demonstration, some farmers no longer insist on high fish meal and oil inclusions in feed,” said Dong Qiufen, Guangdong Nutriera Group, China, adding that research on fish meal substitution is ongoing to help feed millers overcome the shortage of fish meal supply and cost pressure. Some alternatives, especially animal proteins have been effective in replacing 50% fish meal and their inclusion could be at 30% to 35%.

In Vietnam, farmers seek darker colour feeds as an indication of more fish meal. They link this to higher nutritional value for fast growth. Chuang said, “Our years of research showed that fish meal in feeds can be reduced, after balancing with amino acids, krill meal, insect protein, cotton meal, corn meal, soybean protein concentrate (SPC) and corn gluten meal (CGM). We continue to research on the minimum level of fish meal.”

In replacing fish meal with alternative ingredients, the objective is “same growth performance at same cost.” Thailand’s Thai Union Feed Mill has been conducting trials on its zero fish meal shrimp feeds with 11% FeedKind, alternative protein meal produced by Calysta. At the Seafood Expo Global in April 2019, both companies promoted shrimp fed with this feed to buyers. This is working downstream, influencing the supply chain’s customers. At SeaWeb 2019, the discussion among producers of alternatives for fish meal and fish oil (Calysta, Corbion and Veramaris) and Thai Union as the feed miller, was how to communicate to consumers these innovations. These findings, as well as output from the roundtable sessions at TARS 2019 which focussed on aquafeeds, showed that fish meal and fish oil replacements in shrimp feeds are no longer a technical challenge. It is more of a marketing challenge to get the customers to start adopting feeds with alternative ingredients. As fish meal prices keep going up, the industry is pushed in this direction. (See page 30 on the update with fish meal up to May in 2020)

Functional feeds

Functional feeds are becoming well accepted in Asia, particularly in China where industry categorises such feeds under health care, preventive, fast growth, special culture, fillet quality etc. Functional feeds with astaxanthin added are common in China, Thailand and Vietnam. A buyer’s perspective is that in terms of colour, the preference for cooked shrimp is between 27-30 on the colour fan and dark coloured shrimp which can give a premium on the price at USD1/kg or more (Tanco, 2020).

The market is willing to pay for such feeds said Wei. “Our colour enhancement feeds also show excellent performance and is well accepted by our farmers. We have customers buying our feeds to increase weight to as large as wild caught monodon shrimp. Farmers can reduce losses from white faeces disease by using feed for improved digestion and nutrition.”

Functional feeds for snakehead fish farming are relatively common. While Uni President markets feeds which give the fish an ability to combat stress and reduce mortality during transportation, in China and India, there are functional feeds to overcome liver disease. Farming the snakehead or murrel is beginning in India and the feed market is only at 5,000 tonnes (Chen, pers comm). Uno Feeds produces extruded 1mm to 6mm feeds with functional premixes to overcome poor liver condition.

Expansion and acquisitions

The expansion into Asia by China’s large multinationals continued to be a concern. Dr Zhang Song, Vice President at Guangdong Nutriera Group, China, explained that because of the increasing costs, from land, capex and opex to environmental issues within China, its large feed multinationals will build aquafeed mills abroad, in particular the top five aquafeed giants (Tongwei, Haid, Guangdong Evergreen, New Hope and East Hope). Four new feed mills are expected in Indonesia in 2020, contributing to 120,000 tpy of additional capacity to an existing 700,000 tpy.

Local players continued to expand capacity in Indonesia. In September 2019, Indonesia’s PT Matahari Sakti started a fish feed plant in Cikupa, West Java, to be closer to farmers. This added 1,000 tpy to its production. It has an East Java fish feed plant in Gempol and shrimp feed plant in Surabaya. Shrimp feed market leader, PT CJ Feeds has added two new shrimp feed lines to the plant in Serang, Banten province.

Dr Erwin Suwendi, Manager and Head of Nutrition and Feed Technology, PT Suri Tani Pemuka (STP) said, “Japfa Comfeed’s subsidiary, PT Indojaya Agrinusa has inaugurated a new aquafeed

mill in North Sumatra with a capacity of 9,500 tonnes of floating fish feed, 2,000 tonnes of sinking fish feed and 700 tonnes of shrimp feed per month. The feed mill covers sales for the northern areas of Sumatra, where the aquaculture industry demands 30,000 tonnes of feed/month.” He added that Japfa Aquaculture (STP) has been expanding several aquafeed production lines at each unit to support growth of aquaculture in Indonesia. Annual feed production capacity of STP will be around 400,000 tpy.

In Vietnam, Tuan said, “Mavin Aquaculture will invest USD30 million to start marine farming in Kien Giang province in the south of Vietnam. This large 2,000 ha project will target the grouper, barramundi and pompano with designed capacity of 30,000 tonnes/year. The project applies concepts in modern marine fish farming, such as Norway’s round cage technology , France’s feeding systems and fish harvesting technology from Australia. As we target the export market, we will focus on environmental impact and traceability to meet EU’s requirements such as relating to illegal unregulated and unreported (IUU) fishing. Feeds for marine species such as cobia, grouper, pompano and barramundi are under our R&D focus and are expected to be available by 2022.”

In November 2019, De Heus Group opened a dedicated 200,000 tpy aquafeed facility in Myaung Dagar, Myanmar which is close to the centre of aquaculture. The company said that this will give aqua farmers access to the affordable high-quality feeds needed to further improve the development of their farms.

In terms of acquisitions in 2019, in mid-May, Pilmico International Pte. Ltd, the agribusiness arm of Aboitiz Equity Ventures acquired Singapore-based Gold Coin Management Holdings. Gold Coin has aquafeed mills in China, Malaysia, Thailand and in Medan and Lampung in Indonesia. In July, Chicago-based ADM took over Neovia which markets the Ocialis brand of fish and shrimp feeds.

As a regional player, Chuang said, “We will continue to focus on the Vietnam shrimp feed market and enhance our competitiveness which also includes diversification of health products, establishment of optimal culture models, consolidation of our service team and eventually enter into shrimp processing. In India, our feeds have increased by an estimated 40% via our improved distribution and dealers’ network.”

Outlook for 2020

Certainly, the first 5 months of 2020 has been particularly challenging for feed millers across Asia. COVID-19 pandemic and ensuing lockdowns continue to affect the supply chain, feed ingredient cost etc. One surprising effect is lower soybean meal prices, caused by African swine fever lowering feed demand. (Some experiences by industry leaders with the lockdowns and predictions on aquafeed demand in 2020 are given on page 6).

Chuang commented on concerns with the supply of imported aquafeed ingredients and raw materials. News of worker strikes and port blockades in South America prompted uncertainty on prices of fish meal and soybean meal from South America and their prices are expected to skyrocket in the short term. The supply risk is higher with other fish meal supply countries, such as India, Africa, and North America which are in the epicentre of the pandemic. “Fortunately, for the time being, raw materials such as fish meal, corn gluten meal, wheat, and miscellaneous raw materials from China, Vietnam and other countries in Southeast Asia are stable in price and supply.”

Acknowledgement

This is a review on the aquafeed industry in Asia published annually. The author would like to express her sincere gratitude to those mentioned in this article and to other industry stakeholders who have willingly provided information but have requested to remain anonymous.

This article is adapted from issue May/June 2020, Aqua Culture Asia Pacific, pp24-29.

Zuridah Merican, PhD is the editor of  Aqua Culture Asia Pacific Magazine

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