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January | February 2013 An overview of shrimp feed industry in China The International magazine for the aquaculture feed industry International Aquafeed is published six times a year by Perendale Publishers Ltd of the United Kingdom. All data is published in good faith, based on information received, and while every care is taken to prevent inaccuracies, the publishers accept no liability for any errors or omissions or for the consequences of action taken on the basis of information published. ©Copyright 2013 Perendale Publishers Ltd. All rights reserved. No part of this publication may be reproduced in any form or by any means without prior permission of the copyright owner. Printed by Perendale Publishers Ltd. ISSN: 1464-0058 INCORPORATING FISH FARMING TECHNOLOGY
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An overview of shrimp feed industry in China

Jan 21, 2015

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With more than 50 years of culture history in China, shrimp is important seafood the country. Nowadays, the Chinese shrimp industry has caught the world’s eyes, for its largest production and export, as well as the potential Chinese domestic market with a population of more than 1.34 billion.
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Page 1: An overview of shrimp feed industry in China

January | February 2013

An overview of shrimp feed industry in China

The International magazine for the aquaculture feed industry

International Aquafeed is published six times a year by Perendale Publishers Ltd of the United Kingdom.All data is published in good faith, based on information received, and while every care is taken to prevent inaccuracies, the publishers accept no liability for any errors or omissions or for the consequences of action taken on the basis of information published. ©Copyright 2013 Perendale Publishers Ltd. All rights reserved. No part of this publication may be reproduced in any form or by any means without prior permission of the copyright owner. Printed by Perendale Publishers Ltd. ISSN: 1464-0058

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Page 2: An overview of shrimp feed industry in China

16 | InternatIonal AquAFeed | January-February 2013

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Page 3: An overview of shrimp feed industry in China

With more than 50 years ofculture history in China,shrimp is important seafoodthe country. Nowadays, the

Chineseshrimpindustryhascaughttheworld’seyes,forits largestproductionandexport,aswellasthepotentialChinesedomesticmarketwithapopulationofmorethan1.34billion.

The main species cultured in China arePenaeus vannamei, P. chinensis, P. monodon,P. japonicus, P. merguinsis and P. penicillatus, ofwhich more than 70 percent comprised thewhitelegshrimp,P. vannamei.

The modern shrimp farming industry inChinahasahistoryofonlyaboutthreedecadesbutithasgonethroughanextraordinaryexperi-ence which can be roughly divided into fourstages: beginning (1978-1984), rapid increase(1985-1992),recession(1993-1997)andrecov-eryanddevelopment(1998-present)

Therewereonly1,300haofshrimppondsinChina in 1978, however the area of pondsreached 300,000 ha in 2011. Total shrimpoutput increased by more than 6,900 times,from450MTin1978to3,110,000MTin2011,and the average yield increased from 350 kg/hato7,000kg/ha.Thedevelopmentofshrimpfarmingalsopromotesrelatedbusinesses, suchas broodstock, breeding, feed nutrition, animalhealth,processing,transportationandmarketing.

The shrimp feed industry has been devel-oping with the shrimp farming and booststhe development of the total Chinese shrimpindustryconversely.

Ingredients and shrimp feedTheprimaryfeednutritioncompaniesmade

Chineseshrimpfeedwithahighnutritionlevel.In order to produce feed with more than 40percentprotein,alotofgoodanimalingredientshavetobeused.Therearemanyraw ingredi-entscanbeusedinfishfeed,suchascarpandtilapia, butusuallyonly fishmeal, soybeanmeal,peanutmeal,wheatflour,shrimpshellpowder,squidpaste,someotherrawmaterialsandaddi-tivesarepopular in the shrimp feed.Although

the ratio of fishmeal is decreasing yearly as itsincreasingprice,itstillholdsmorethan30per-cent.Chinaistheworld'slargestuserofsoybeanmealandfishmealandreliesheavilyimports;thehighpricesofthesetwoingredientsin2012eatintoChinesefeedmanufacturers’profit.

Almost every feed producer has its qualitycontrollab,nomatterhowbigorsmall,tocheckandcontroltheingredientsandfeedquality,astheingredientsareexpensivetheproducerneedto buy them with reasonable price accordingto the quality level. Besides the governmentqualitystandards,somebigfeedproducershavestricterstandardstoensureeverybatchofrawmaterialscanbecheckedbeforeentrancingintothefactorywarehouse.Fishmealtakesupnearly50percentofthetotalcostoffeedformulationandnobodywants tobuybadquality fishmealwhich is supplied by illegal businessman. Feedproducers control the fishmeal quality withmorethan15items.Withthemicroscopeandaminoacidanalysis,thequalitycanbeestimatedmoredirectly.

The steep demand of the end-users alsoneedsaqualitycontrollabinthefeedfactorytotestthefeedproductregularly.Besidesthenutri-tion items, crude protein, crude fat, fiber, ash,moisture,Ca,Pandsalinity,physicalappearanceitemsaremoreimportanttothefarmers.Astheshrimpfeedhasbeenover-suppliedtheseyears,whenthefamerschoosetheshrimpfeedtheycanputdifferentkindsofshrimpfeedtogether,feel the smell and dust with their noses andhands, compare the length and size together,test the water stability and water colour withdifferentcups.Thefeedfactoriesneedtocheckthefeedphysicalcarefullyduringtheproductioncourse.

Production technologyThe Chinese feed production technology

has developed speedily over the past years.The primary feed production machines weremostly imported from Germany and AmericaandthenfromTaiwan.TodayChinesemachineproducers make practical and economic feedproduction lines. The local machine suppliers

adjust their products continually according tothe market demand, make the machines withhighefficiency,highcostperformanceandlowerenergyconsumption.

Chinese feed production lines have beenexported to more than 100 countries since1990s.Somelargerfeedmakersoptimisetheirmachinery and equipment yearly with goodproduction performance and feed physicalappearance.

Withtheincreasedpricesandthehighratioof fishmeal, fewer and fewer raw ingredientswithstarchcanbeusedintheshrimpfeed.15yearsagoinfeedproductionformulation,morethan 30 percent wheat flour with 32 percentwetflourglutenwasusedtogivefeedsatleasttwohourswaterstability(someproducershadtouseabout0.2%binder.)Nowadays,itiseasyto produce shrimp feed with the same waterstability,butwithabout20percentwheatflourwith about 30 percent wet flour gluten, andnobinder.This isduetothe improvements inproductiontechnology.

Feed management and food safetyBefore 2007, most of the Chinese farmed

shrimpwereexportedandtheChineseshrimpindustryhadtobeinlinewiththeinternationalremands and standards. So far most shrimpfeedmakersarecertifiedwithISOmanagementsystem, some ones are with HACCP, GlobalGAPandsomeothercertifications.TheChinesegovernment legal regulations are continuousimprovingtokeeppathwith thedevelopmentoftheshrimpindustry.ThenewAdministrativeRegulations on Feed and Feed Additive wascarriedoutinMay2012withmorespecificandstricter restrictions. Some feedproducerswhocan’t meet the standards in this new law willbeclosed.

Toensurethefoodsafetyofshrimpindustry,besidesthelawsforthedomesticfeedproduc-ers, there are also specific regulations for theimport feed raw ingredients. From January 1,2011,without the importregistered license,allthe listed animal source ingredients could notlongerbeimportedasbefore.

An overview of shrimp feed industry in Chinaby Dong Qiufen, Peng Zhidong, Zhang Song and Yang Yong, China

22 | InternatIonal AquAFeed | January-February 2013

FEATURE

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Correlative industrySome related industries aredevelopingwith

the shrimp feed industry. In order to keep theshrimpfeedmarketshare,somefeedproducersarealsoinvolvedinbroodstock,breeding,animalhealth,shrimpfarmingandprocessingbusinesses.Ifaproducercansupplygoodqualitypostlarval(PL),animalhealthproductsandcultureservice,his feedwithgoodquality justcanbesoldsuc-cessfully.

AmongthefiveChineselargestPLsuppliers,fourarefeedmakers.NowtheSPF/SPRbrood-stock inChinaarealmost imported fromUSA,butdomesticbroodstockandbreedingresearchisunderdoing.About90percentofthe500bil-lionPLinChinaaredomesticPL,thefeedandPLsuppliersneedtoimprovethePLqualitythentogetbettershrimpfeedperformance.

AttheearlystageofChineseshrimpdevelop-ment, some medicines were over-used duringthe shrimp culture course. But after the casesof Taura Syndrome Virus (TSV), White SpotSyndrome Virus (WSSV) and other diseases,farmershavefoundthatmedicinescan’ttreatallthediseasesnomatterhowmuchtheycost.Onlyimproving the culture technology and manage-mentcanhelpthemtopreventthediseases.

Withthestrictgovernmentsupervision,moreandmoremedicinesarelistedinprohibiteddrugslist. Aquatic medicines and chemical producersdevelop new medicines with new technology.MicroecologicsandmedicinalherbarepopularinChinanow.Probiotics,prebioticsandbioflocarehotkeywordsinChineseaquaculture.Somefeedmakers are also conducted related research topromotethesalesoftheirshrimpfeed.

Fierce competitionChinese shrimp farms are distributed along

almost 18,000 km of coastline from HainanProvince in the tropics to Liaoning Province inthe temperate zone. The shrimp feed factoriesarealsolocatedalongthecoastline,morethan70percentfactoriesareinSouthChinaasthelargeshrimpfarmingareaisthere.

In China, the shrimp feed market is about1,250,000 MT, but there are more than 100shrimpfeedmillswithatotalproductioncapacityat2,500,000MTandfourshrimpfeedmagnatesholdnearly70percentofthemarketshare.TheChineseshrimpfeedmarketcompetitionisveryfierceanditmakesthisindustrymovefaster.

With the strong competition, the price ismuch lower than before with a net profit nomore than 100 USD/MT for P. vannamei feednow. To get the marketing tickets, the feedmakersneedtoproducegoodfeedwithaniceappearanceandensurethefarmerscomparethephysical andcultureperformancewith the feedfrom some other competitors. Homogeneouscompetitionmakes some small feedcompaniessupply the shrimp feed on credit; the farmerscanpay for the feed inacertain times, suchasamonthorthreemonths.Butit isadangerousmarketoperationandalmosteveryshrimpfeedmaker knows it. Some feed suppliers try toincrease theirmarket sharebyofferingahigherdiscounttothedistributorsandfarmers,butthatkindofmarketsharecan’t last longasahealthyenterpriseneedsprofit.

But increasing feedsaleswithcash is ahardjob;theChinesefeedsalesmenarealwaysunderhighpressure.Since2006,somebigfeedproduc-ers have promoted service marketing, that issellingthefeedtothefarmerswithgoodserviceandhelpthemtocreatevalues.GuangdongHaidGroup is a good service-marketing examplewitha strong technical service teamwithmorethan 2,000 members who are highly educated.Haidhasastrongtrainingsystemtomakeeveryservice-marketing member hold the necessaryknowledge, an efficient management system,available good quality PL and animal healthproductscankeeptheservice-marketingprogramgoeswell.

The service members are distributed intodifferent areas, butmostof theirwork is goingtothe farmingpondstocommunicatewiththefarmer,dothetechnicaltraining,deliverthenewculture information, help them to prepare theponds and treat the diseases and some otherserviceswork.Therearemorethaneightdiffer-entshrimpfarmingmodesinChina,Haidhasitsmembers to study and promote the successfulmodesindifferentfarmedareas.Withthispow-erfulservice-marketingsystem,Haidhasheldthebiggestshrimpfeedmarketsharewithmorethan300,000MTlastyear.

Forthemarket,morefeedcompaniesarefol-lowing Haidalthoughevery bossknows it isso difficultto build aneffectiveserviceteam.Anyway, itis not easyto produce

feed in China now; feedmills also need to beinvolved in hatchery, water quality treatmentproduct and farming technology service. Withtheservicetothefarmers,mostofthemcangetgreater profits from shrimp culture thanbeforeandfeedmillscansell feedwithmorecashthandebt.

The future of the Chinese shrimp feed industry

With the upswingofChinese feed industry,some issueshavebeenconcernedpublicly.TheChinesevannameishrimpfeedproteinisgeneral-lybetween39-41percent,themonodonshrimpfeedevenwithhigherproteinandsomefarmersarefeedingtheirvannameiwithmonodonfeed.The shrimp feed protein in other countriesis mostly between 30-35 percent, and someresearch papers have reported that decreasingtheproteinlevelbyincreasingreasonableenergyand balanced nutrients can maintain the similargrowthperformance.

Furthermore,lotsofresearchaboutthesub-stitutionoffishmealiscarriedouteveryyearandmanyavailablemethodscanrelievethepressurewhich is causedby fishmeal.However, fishmealstillaccountsforgreaterthan30percentoffeedand the Chinese feed makers are now findingfishmeal expensive. With the ever-increasingprice,theratiooffishmealinChineseshrimpfeedwillbedecreasedoneday.WeforecastthattheenvironmentallyfriendlyandhealthyshrimpfeedwillbepopularinChina.

Another issue is that although the Chineseshrimp feed industry is already over-supplied,totalproductioncapacityisincreasingmorethan100,000MTyearly.The cut-throat competitionwill manage this industry, but it still needs thegovernmentguidance.Withstrongcapital,tech-nology,humanresourcesandmarketshareofthelargefeedgroups,thesuitableacquisitionisgoodtothe industrialrestructuringandcanmaketheshrimpfeedindustrymovehealthily.

The development in China and a domesticmarket of more than 1.34 billion spells greatpotential for shrimp consumption. About 70percentofthetotalChinesefarmedshrimparesold locally at present and this number will goon increasing. However, with limited land andincreasingfarmingcost,itseemsChineseshrimpproduction won’t increase as quickly as in thepast and the shrimp feed industry will developmoreregularly.

References available on request

AuthorsFrom left to right: Yang Yong, Zhang Song, Peng Zhidong, Dong Qiufen

24 | InternatIonal AquAFeed | January-February 2013

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