40 Industry Review
Asia’s aquafeed players battle with rising costs Rising feed raw material prices continued from 2021 but with new challenges- escalating wheat prices and inflationary pressures in 2022
Feeding cobia in cages
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hese last two years (2020 and 2021) have been difficult times for Asia’s aquafeed players with uncertainties and since September 2020, unprecedented rises in costs of major feed raw materials, namely soybean meal and corn. A detailed report “Is there a crisis in the works for Asia’s aquafeed players?” was published in issue May/ June 2021, p28-34). In this review, we continue to follow the trends in 2021 up to May 2022. In summary, the battle continues as the challenges faced in 2020 and early 2021 remain unabated. However, added to this is the new dimension since March 2022 - the effect of the Russia-Ukraine war on global wheat supplies, rise in energy and fuel costs and onset of inflationary pressures. In preparation for this review, we asked some industry players on their strategies following the rise in feed raw material costs as well as their views on functional feeds, automation and outlook for 2022.
Rise in feed raw material prices
Aquafeed players singled out peak prices with soybean meal (SBM) throughout 2021. Prices rose even higher to USD521.9/tonne in early March 2022, up 64% from that in October 2021. From the first week of March 2022, the price per tonne of wheat surged 80%, compared to that of the past 12 months. As a comparison, in November 2021, wheat prices were around USD311.50/tonne. In May 2022, corn prices rose 29% YTD (Market Insider). In India, Dr Ajay Bhaskar, Nutritionist at IFB Agro Industries, said, “SBM prices were at all-time high in 2021 at USD1.5/kg. Luckily now it is lower at USD1/kg. We were in a better situation when the government allowed imports of SBM in 3Q 2021.”
May/June 2022 AQUA Culture Asia Pacific
In 2020, aquafeed millers were able to support the farming system, by extending credit to farmers during the lockdowns, when farmers could not sell their harvests. But since late 2020, a different picture emerged when aquafeed millers themselves are also suffering with high costs of raw materials and rising production costs. This is reflected in Indonesia when a leading aquafeed miller known for its CSR (corporate social responsibility) activities decided to not aggressively pursue sales. A company source said, “Within this pandemic we have restrained from increasing feed prices with farmers facing cash flow problems. Recently, by not changing formulations and incurring significant cost increases of more than 10%, we needed to increase feed prices more than once in 2021 for fish feed and once for shrimp feed.”
Production trends in 2021
Some industry players gave their take on aquafeed production in 2021. Dong Qiufen, Guangdong Nutriera Group, quoted data from the China Feed Industry Association which gave the growth in aquafeed production in China at 8% in 2021 to 22.9 million tonnes. This is higher than the 21.7 million tonnes published in Alltech’s annual agrifood survey. However, another estimate on growth was only 5%. In China, the bulk of aquafeed production in 2021 was freshwater fish feed (16 million tonnes). Production of marine fish feed ranged from 2 to 2.5 million tonnes and shrimp feed was 1.1 to 1.5 million tonnes. Industry players said significant changes were the result of higher demand for feed for high value freshwater fish like the snakehead and largemouth bass. Feed demand also rose
