Recently the Ministry of Agriculture in China released their 13th five-year plan for the years 2016 to 2020 for the feed industry. The key points of this plan mainly affect the outputs, enterprise numbers and raw materials, according to CCM’s analysts. For foreign suppliers of raw materials, this plan will change future trade, due to the fact that China tries to lower its dependence on import of the materials and additives and concentrates on self-manufacturing of those.
The plan, published in October 2016, contains on the one hand a review of the 12th five-year plan and on the other hand points out the guidelines for the next years’ development.
According to the 12th plan, the feed industry in China developed very fast. In fact, since 2010 this industry experienced a total growth of 23.5% compared to 2010, the beginning of the last five-year plan. The overall output even reached 200 million tonnes in the year 2015. This amount by the way earns the People’s Republic of China the first rank worldwide in feed output. The flagship of the feed industry in China is the pig feed’s output with namely 83.44 million tonnes. That is a 40.3% increase over 2010. The 13th plan has the goal to increase this amount even further up to 94 million tonnes. The overall feed output is supposed to rise to 220 million tonnes.
In opposite to the increasing feed output, the Ministry of Agriculture plans to decrease the amount of feed manufacturers in China, due to the inefficiency and environmental pollution of many small producers. The number already decreased by 4,071 units during the last five years and this trend is supposed to go on until a reduction to around 3,000 factories. To keep the production up and even boost it, the plan provides for the fact that the focus on developing is on the big enterprises with an annual output of 500,000 tonnes or more to increase the number of manufacturers with an annual output of at least 1,000,000 tonnes.
Source: Ministry of Agriculture of the People’s Republic of China
The table illustrates the different shares of the feed industry segments and the comparison of the outcome of last five years to the forecasted outcome of the next five years. The important rule of the pig feed segment and the endeavors to grow it the highest degree is shown obviously. The table also illustrates, that both poultry feed industries accumulated surpassed the pig feed industry in the last five years, while the 13th plan determines those segments on the second place after pig feed.
Related to the huge growth of the feed industry in China, the upstream industries like feed additives are also blessed with a rapid growth. The output of feed grade vitamins, for example, reached 280,000 tonnes in 2015. The sector of feed grade amino acids experienced even an output of 1.52 million tonnes, according to the Ministry of Agriculture.
Another notable fact is, that China has loosen its heavily dependence on methionine imports, due to the establishing of two big methionine plants in China. The 13th plan is forecasting a stabilization of the production capacity of feed grade vitamins and amino acids to meet the domestic demand of those.
The plan of the Ministry of Agriculture furthermore intends to lower the dependence on protein feed additives, which are mainly imported, and goes towards more use of synthetic amino acids for feed additives.
For foreign suppliers of feed additives like vitamins and amino acids, this development should be watched very carefully, as China is about to strengthen own manufacturing over import. Nevertheless, the focus on the domestic manufacturing also offers good opportunities for investments in the Chinese feed additive industry itself.
The five-year plan, or five-year guideline, in China was published in 1953 for the first time. Since then it identifies the areas, where researchers, investors and human resources put their focus on. The guideline provides the direction of the second largest economy in the world, which guarantees it huge domestic and foreign attention. Also, the 13th five-year plan is the first plan under President Xi Jinping. It is therefore very important, as the year 2020 will be the last year of realizing China’s goal of a moderately prosperous society, according to the Ministry of Agriculture.
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Tags: amino acid, feed, five-year plan