Special Edition: Asian Trends

Increased compound feed demand in India

By Jane Byrne contact

- Last updated on GMT

© istock
© istock
The USDA, citing feed industry sources, says India’s feed industry is growing at a CAGR of 5-7% with poultry, cattle and aqua feed sectors emerging as major growth drivers.

“Experts report the demand for animal protein and dairy products will increase the compound feed consumption demand by Indian fiscal year 2017/18 (April-March) to 27-28 MMT against an estimated supply of 21-22 MMT.”

That demand-supply gap is likely to expand in the coming years, said the US Department of Agriculture (USDA) in a recent GAIN India feed and grain market​ outlook.

The commercial feed industry largely caters to poultry (70-75%), aquaculture (10-12%) and dairy cattle (10-15%) feed sectors, noted the authors of that field report.

“The poultry industry has been growing by about 5-6% per annum [in the past few years] on higher consumer demand for animal proteins due to a growing economy and expanding middle class.”

Feed corn usage

Industry sources, according to the USDA publication, report that corn and soybean meal dominate the commercial feed market in India, with supplementation by other coarse grains including small quantities of spoiled/inferior quality wheat and other oilseed meals depending on the comparative pricing.

In March, the USDA said MY 2018/19 corn consumption is forecast higher at 26.5 MMT on expected steady demand for poultry feed, starch, and ethanol. Forecast consumption includes 14.5 MMT for poultry feed, 1.5 MMT for other animal feed, 1.8 MMT for starch, 1.5 MMT for ethanol, and the balance for food, seed and other uses, it said. Its more recent outlook said corn consumption forecast remained unchanged.

“Despite weak corn exports, growing demand from the rapidly expanding demand from the domestic poultry industry as well as, commercial animal feed and starch industries has supported back-to-back ‘bumper’ production in recent years.”

In fact, due to growing demand from the feed sector, India is likely to emerge as net importer of corn in MY 2018/19 with imports forecast at 0.5 MMT, said the USDA in March.

Small quantities of DDGS (200,000 MMT to 300,000 MMT) from ethanol plants are used by India’s poultry feed manufacturers, it added.

The Indian livestock feed industry sometimes incorporates de-oiled rice bran and a small quantity of broken rice as fillers in commercial feed as well. “However, there are no official or reliable industry estimates available for rice for feed consumption or industrial use.”

feed india USDA gain
India feed usage © USDA Gain field report

Dairy feed trend

Given the small-scale dairy operations that dominate that sector currently, most of the dairy feed supplies are met through farm feed mixes, which are typically given to lactating cows and female buffaloes, said the USDA.

“However, the recent trend of replacing local low-yielding dairy animals by higher yielding cross-bred cows and ‘murrah’ breed buffaloes has increased the demand for commercial dairy feed by about 15% per annum; this change drives higher wheat usage in dairy feed sector. “

The US agency said, typically, the spoiled and inferior quality wheat not deemed fit for human consumption, both government-held and open market, is used for animal feed. Though, citing again market sources, it said there is a belief that the relatively tight government-held wheat stocks in recent years have limited the diversion of government-held wheat to animal feed in India.

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