The US Department of Agriculture (USDA) has just published a new report on Myanmar feed consumption patterns and demand.
The agency estimates that livestock feed demand in that country this year will be about 3 MMT overall.
Feed represents about 70-75% of total production costs in that market, particularly in the broiler and layer farming sectors. The country’s poultry sector is the biggest consumer of animal feed, at around 70%, with the swine sector taking up around 25%. The rest of the demand comes from other sectors such as dairy, duck, and quail.
In Myanmar, around 45% of total livestock feed demand is for complete feed, 20% is for local home-mixed feed, and another 35% is for raw feed materials, noted the USDA.
Feed raw materials
The UDSA publicaton shows the major raw materials used for feed production in Myanmar are broken rice, yellow corn, wheat, rice bran, wheat bran, soybean meal, sunflower meal, bone meal, corn distiller’s dried grains with soluble (DDGS), oil cakes, and fishmeal.
Yellow corn, broken rice, by-product brans and fishmeal are produced locally.
Myanmar’s yellow corn production was around 2.25 MMT in MY 2017/18 but about 60% of total production is exported, primarily to China, said the analysts.
Due to particularly strong demand from China this year, there was a hike in yellow corn prices, resulting in local feed millers facing a shortage of supply and high prices:
“As an alternative, feed millers tried to import yellow corn from other countries, including the US. However, local corn traders and growers pressured the government to prevent such corn imports. The Ministry of Commerce agreed and refused to issue import permits for corn grains. When feed millers complained, the government and local producer groups suggested that they enter into contract farming arrangements with local farmers.”
Feed millers, though, pointed out that there are not strict controls or regulations on contract farming, and there is no guarantee that farmers would put aside the agreed amount of corn for domestic feed use if Chinese buyers offer higher prices, added the USDA experts.
Trade policy
Myanmar currently only restricts whole corn grain imports. It allows imports of feed additives and other raw materials such as soybean meal, soybean grains, and feed wheat.
Imports of raw materials for animal feed are tax exempted, but need to receive an import recommendation from the Department of Agriculture and an import permit from the Ministry of Commerce, as per the USDA report.
Myanmar is importing soybean meal, DDGS, corn gluten, feed wheat, bone meal, and other protein source ingredients from the US, India, Paraguay, India, Brazil, Pakistan, Canada, Ukraine, Moldova, and Argentina.
“Trade sources report that the import of these types of feed ingredients has increased due to higher domestic prices for yellow corn and other oil cakes.”
Aqua feed trends
The USDA estimates that commercial aqua feed demand in Myanmar in 2018 will reach about 0.5 MMT.
The sector tends to have a feed conversion ratio (FCR) of 1.5-2.0, depending on feeding practices, said the authors. Less than 60% of fish farmers use scientifically formulated mesh, sinking pellets or floating pellets.
Most shrimp farms in Myanmar rely on imported pellet feed, according to the USDA. The country imported around 100,000 MT of aquaculture feed in 2017/18, with Thailand and Vietnam being the main suppliers.
There are about six large aqua feed mills in Myanmar - one of the largest local aqua feed mills is located in Yangon, with capacity of 450 MT/day.
Rice bran constitutes the largest portion of aqua feed, and protein comes from oilseed cakes such as groundnut, sesame, sunflower, cottonseed, aspergillus niger, rapeseed and soybean.
The USDA report, again citing trade sources, noted increasing raw feed prices are becoming a major challenge for aqua feed producers and fish farmers in that Asian market.
High level of foreign direct investment in feed sector
The feed sector is mainly led by foreign companies, which hold about a 60% share of domestic sales in Myanmar.
Some feed millers import inputs themselves and some buy through local importers. There are over 20 livestock feed concentrate and feed ingredient importers in the country, added the US agency.