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Industrial compound feed production

Animal feed in India is currently evolving from a fragmented industry into an organised sector. The compound Livestock Manufacturers Association (CLFMA) estimates domestic demand for compound feed in India currently at around 45 million tonnes and is expected to grow to around 68 million tonnes by 2010.



Poultry feed is the largest segment in this industry and includes both broiler feed and layer feed. Feed practices in the country are sufficiently advanced and typically involve the use of compound feed instead of feeding grains or foraging. With increasing integration within the poultry industry, the use of compound feed has also increased. The poultry feed segment's growth has been fuelled by the broiler industry where both consumption and production have been growing at an annual growth rate of 9% over the last five years.

The layer bird industry has also been growing and India is currently the sixth largest egg producer in the world. Only 10% of compound feed production is for commercial purposes. This is primarily because despite the high cost of feed, the use of compound feed does not results in higher egg yields as the feed also increases the risks to the birds.

The feed production by the organised sector was around 1.5 million tonnes of which broiler feed production was around 1.0 million tonnes.

However, industry estimates show that the total poultry feed requirement in India was 14.3 million tonnes in 2004, of which 6.2 million tonnes is estimated to be broiler feed. This highlights the importance of the large number of unorganised players (who are primarily home mixers), although the organised sector is expected to become increasingly important as more and more independent poultry farmers are being incorporated as contract farmers by the integrated players.

Source: Rabobank

Source: CLFMA, Rabobank



The cattle feed segment is also a segment for potential growth given the fact that Inida is largest producer of milk in the world.

Production is expected to grow 4% at an anuual basis. India's yearly production of 91 million tonnes of milk implies that the potential market for cattle feed should be approximately 45 million tonnes annually.

However the vast majority of cattle and buffalo in India are fed through grazing and the use of basic mixes and concentrates and the market for compound feed is estimated to be around 5.5 million tonnes.

The private players produce around 1.2 million tonnes; the dairy cooperative sector produces around 2.5 million tonnes of low cost feed that is sold to member farmers involved in milk production. The rest is produced by home mixers.

Source: Rabobank

Source: CLFMA



Aquafeed is the third major segment in the Indian animal feed industry. It comprises primarily shrimp feed and fish feed, with shrimp feed being the dominant type of feed, as the segment is largely dependent on marine exports (60% of volume, 86% of value). Prodcutin of brackish water shrimp feed was around 155,000 tonnes in 2004.

Approximately 10,000 tonnes of shrimp feed was imported in 2004. Production of freshwater shrimp feed in 2004 was estimated to be around 100,000 tonnes, while fish feed production was app. 10,000 tonnes.

Source: Rabobank (note: 2005 figures estimated)


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