1 China Feed Online com Agenda

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China. Feed. Online. com

Agenda • • • Brief feed industry Feeds composition Fishmeal in animal feeds Fishmeal in fish feeds Changing/problems/future My comments China. Feed. Online. com

China. Feed. Online. com

Brief – Supply & Demand • Supply : amount of fishmeal produced globally is not determined by demand. It is limited by governments quota / natural resources. • Demand: globally feed production continuing growing especially the aquaculture feed continues to be the fastest growing sector with expansion estimated 8 -10% /year. • China: We estimated total feed production is 4. 5% increased i. e. 97. 2 million tons in 2005. China. Feed. Online. com

Brief – China Feed Industry • China, the largest fishmeal Importer; ( approx. 20 % of the world ); • China, the aquaculture Center of the world ( approx. 70% of the world); • China, the largest swine raising country ( approx. 52% of the world); China. Feed. Online. com

Brief – China Feed Industry Fishmeal arrival Qty 1, 394, 410. 45 mt Jan-Sept 05 Exporter Market Share Peru Chile Alaska Russia Argentina 70. 72% 16. 91% 3. 54% 1. 77% 1. 49% Avg CIF/ Sept 05 $696. 69 $746. 48 $936. 29 $906. 46 $763. 58 Avg CIF/ Jan 05 $613. 58 $687. 53 - $879. 69 $715. 33 Resources: China Customs China. Feed. Online. com

China. Feed. Online. com

Feed Composition – 3 Categories 1. Complete feed 2. Concentrate feed 3. Premix China. Feed. Online. com

Feed Composition (1) - Complete Feed: - Ingredients (fishmeal included) : a feed including all kind of ingredients and the nutrition requirements for raised animals (except water). - Usage: Farmers use it alone to feed animal/fish without adding any other ingredients except water. - Dosage: 100% complete feed directly to feed animals/fish. China. Feed. Online. com

Feed Composition (1) Complete Feed 100% Complete feed + water Fishmeal included China. Feed. Online. com

Feed Composition (2) – concentrate - Ingredients (fishmeal included): Mixture of protein ingredients , minerals, vitamins and non-nutritional feed additives according to a certain formula. - Usage: It cant be used alone, but no requirements to add other extra additives/salt. Farmers must follow the formula instruction to add other like corn. - Dosage: 30% concentrate + 70% corn China. Feed. Online. com

Feed Composition (2) – Concentrate 30% Concentrate + 70% Farmers’ own corn/wheat Fishmeal included China. Feed. Online. com

Feed Composition (3)- Premix - Ingredients (no fishmeal) : Premix of more than 2 kinds of feed additives. - Usage: Farmers add energy feed (oil/fat) + protein feed (fishmeal/sbm) blended with Premix => self formula complete feed - Dosage: 1 -4% premix + 5% fishmeal + 9195% corn/plants proteins China. Feed. Online. com

Feed Composition (3) – Premix Farmers add 5% fishmeal + 1 - 4% Premix Farmers add 91 - 94% corn, plants protein China. Feed. Online. com

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Fishmeal in Animal Feeds – Complete feed (typical % of fishmeal) + 5. 9% Species chicken Baby pig Fish meal 0 -3% 5 -8% Remark: - Simple, without adding any other ingredients. - Estimated production 72. 25 million tons (up 5. 9%) in 2005 China. Feed. Online. com

Fishmeal in Animal Feeds – Concentrate (typical formula for pig) +12% concentrate - Corn Soybean meal +16% - Additives +12% 7 -15% dairy +60% fishmeal Compound soy 100% Remark: - 7 -15 % of Fishmeal after diluted is about 2% - Widely used in pig in North, farmers have their own grains. China. Feed. Online. com +2. 5%

Fishmeal in Animal Feeds – Premix (typical formula for pig) Ingredients% premix Fishmeal corn Soybean meal Wheat bran Compound soy typical 4% 3% 63% suggested 4% * 0% 63% 27% 3% 100% 20% 6% * 8% 100% Remark: - Compound soy replaced fishmeal - Premix demand increased sharply China. Feed. Online. com +9. 2%

China. Feed. Online. com

Fishmeal in Fish Feeds – 3 Major species group 1. Carnivorous fish – required fishmeal or other animal proteins in their diet. 2. Omnivorous fish – flexible for any diet. 3. Crustaceans – Most demanding of fishmeal China. Feed. Online. com

Fishmeal in Fish Feeds – typical formula Ingredient fishmeal Bone meal shrimp 23 -40% tilapia turtle * 5 -15% * 38 -60% - - 3% premix 3. 5% 1% - Soy meal 20% 12. 12% Groundnut meal 7. 4% Canola meal wheat bran/corn meal others total 10% - 19. 34% 5% 6% 13. 4% 30% - - - 100% China. Feed. Online. com

China. Feed. Online. com

Changing – Why ? • Fish meal is always been treated as the best protein sources in China, However, supply of fish meal is limited and value is high. This pushed Chinese start thinking to change. • Some start to look for other cheaper and good performance sources to reduce the cost. • Some start to look for proper formula without reducing productivity. China. Feed. Online. com

Changing…. . 1. Feed Production 2005 2. Feed composition 3. Substitutes 4. Aquatic Farming 5. Industrialization 6. Farmers’ knowledge 7. Consumers 8. Government policy China. Feed. Online. com

Changing (1) – Production 2003/05 Unit: 000, 000 tons 2003 2005 2004 -2005 production Estimated Changes Complete feed 64. 06 72. 25 + 5. 9 % Concentrate 20. 46 21. 3 + 2. 5 % premix 3. 92 3. 98 + 9. 2 % Others - Total 87. 81 - 97. 20 - + 4. 5% - Animal feed = 90 -92% , Aqua feed = 8 -10 % - Complete feed growing well in baby pig/cattle/aquaculture - Concentrate feed dropped quickly - Premix increased sharply. China. Feed. Online. com

Changing (2) – Feed Composition • Premix - Allow small feed makers to purchase a whole group of micro nutrients rather than attempting to determine how much is available from the productivity of the system and the other ingredients. • Small feed makers blend premix with fishmeal and vegetable protein by their formula. • Premix increased sharply is a signal that cultivating industry is more industrialized. China. Feed. Online. com

Changing (2) – Feed composition Complete feed – growing well • piglet • High value fish Concentrated feed – slowing down due to numbers of individual farmers decreased. China. Feed. Online. com

Changing (3) – Substitute Meat and Bone Meal Research: Many trials of using animal protein to replace part of fish meal and found If the rate not over 50% in tilapia is very success. New dosage & Usage: 5 -10% MBM in low value fish, pig Forecast: USA MBM annual production about 2. 1 million tons, 20 -30% for export. Once China re-open USA MBM, we estimate importing quantity will return to 200 – 250, 000 tons a year. China. Feed. Online. com

Changing (3) – Substitute Plants protein + Amino-acid • Nutritional studies - plants proteins supplemented with specific amino – acids could achieve the same production levels with fishmeal. Partial replacement of fishmeal with plant protein is already widely accepted in S. China. • ASA in Beijing has done high SBM feed 80: 20 in Tilapia and they found the averaged FCR 0. 97: 1 and the flavor of fish is no difference with those fed by fishmeal. • Low fishmeal formula - suggested fishmeal/sbm ratio down from 2. 1 to 1. 3 plus amino-acid. fishmeal content lysine 4. 56% (1. 9 times SBM), methionine 1. 6% (3. 05 times SBM). China. Feed. Online. com

Changing (4) – Aquatic farming increased • Aquatic farming has become the fastest-growing sector averaged over 10%. (24% FH 2005). • Traditional faming of low-value fish and omnivorous species’ (like carp) fish meal dosage has been reduced or even removed (S. China) • High-value , carnivorous species (shrimp, eel) production increased and dosage still remain unchanged. But when fish meal is expensive, SD fishmeal is replaced by FAQ. China. Feed. Online. com

Changing (5): Industrialization • Small to Large-scare: Number of feed mills has decreased over the years. At present, China has about 10, 000 feed mills. Annual production over 100 k tons’ feed mills increased 20% last year. • Traditional to Intensive operation: Semi/intensive operation has gradually superseded the traditional method of cultivation (given feed by hand). More farmers use automated feeding system with a consequent improvement in feed efficiency. China. Feed. Online. com

Changing (6) – Transfer of Knowledge China feed industry has changed dramatically in the past decades. It’s expansion is not only in total volume but knowledge. • Balance Diet : More Farmers learned it is important to feed a balanced diet that provides a proper mix of protein and other ingredients. • Formulation: More farmers are changing from the use of essential fishmeal based diet to a current more diversified formulation structure based on protein’s price level. Formula becomes more flexible and eventually fishmeal will be used at only those low possibility to be replaced species such as eel/shrimp/high value fish. China. Feed. Online. com

Changing (7) – Consumers’ Eating Habit and Urban Population increased • Eating habit: switch from traditional pork meat, egg to more poultry(+3%), beef, dairy (+20%), fish (+10%) • Income: New demand from urban people life improved. • Urbanization: City population increasing which is the most important & long-term power in the future. China still has over 58% population are in rural area. (meat: 21. 74 kg urban v 12. 72 kg rural) China. Feed. Online. com

Changing (8)- Government Policy Ministry of Agriculture New Regulation – July 15 , 2005 (China License) : • Histamine: 300/500/1000/1500 mg/kg 40 mg/kg (white fishmeal) • Chrome (Cr): 8 mg/kg max • Total Bacteria count : 2 x 106 China. Feed. Online. com

Problems • China is short of protein and energy feed materials including fishmeal. This is a long term problem that China cant solve it in the short terms. • Large % of farmers still feel fishmeal must be in the diet and feed should have a good fish smell in order for them to work. • Over feeding, over nutrition causing water pollution, wasting feed, damaged environment is still a common problem. • Aquaculture history is short in China. Improving aquatic technology is the critical issue. China. Feed. Online. com

Future • At present, cost of feed in farmed fish is about 60% high. Improving technology to reduce the cost via improve the feed performance with cheaper protein is future’s target. • Different diets for various species/growth cycle: - Omnivorous fish : fish meal free formula - Carnivorous fish : lower fish meal formula - High value fish : remain unchanged • Select a proper quality of fish meal and formula per species, fish size, age, eating habit …to feed. China. Feed. Online. com

Future – Fishmeal % in Animal Feeds species fishmeal changing Baby pig 5 -8% Unchanged/SD Young pig 3 -5% Adult pig - Reduced or MBM Free fishmeal Young chick 2 -6% 0 - 3% China. Feed. Online. com

Future – Fishmeal % in Aquatic feed Species Omnivorous Fmeal changing Tilapia 20 -25% Plants protein Carp 19 -24% Partly MBM Grass Carnivorous Eel Prawn Low value High value Crustaceans Turtle 5 -10% Or no fishmeal 65% White fmeal % down 20 -30% -- 5 -10% Full/partly MBM 15 -20% FAQ to SD fishmeal 60% -- China. Feed. Online. com

My Comments • Changing use fishmeal in both animal and fish feeds is the important objective for the future. • To produce a high performance, quality feed containing lower levels of fishmeal will be challenging. China. Feed. Online. com

My Comments • The rate of feed industry growth in China will continue grow at about 5% per year in coming 5 years. • Fishmeal usage will gradually move toward to mainly in aquaculture and baby pig only. • China will continue buying fishmeal and more high quality steam dried. China. Feed. Online. com

China. Feed. Online. com

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