July 1, 2024

 

Why did China's aquafeed output shrink in 2023

An eFeedLink Exclusive

China's production of aquafeed decreased by 3.79% on-year to 23.06 million tonnes compared with 2022. Aquafeed output dropped by 900,000 tonnes, with production in the first quarter last year down by 250,000 tonnes and the third quarter down by 685,000 tonnes (changes in the second and fourth quarters were minimal).

 

China's aquafeed output consists of freshwater and seawater types, with the former accounting for 85% of total production. The output of freshwater aquafeed in 2023 was 19.86 million tonnes — 980,000 tonnes below that of 2022 and an 8.30% drop. Notably, the decline in aquafeed production was mainly caused by the falling output of freshwater aquafeed. On the contrary, seawater aquafeed production increased by 74,000 tonnes in 2023.

 

In June last year, the prices of fishmeal prices surged tremendously in June, with the rental cost of ponds (for  aquaculture use) rising. Under the pressure of high costs and low prices, aquaculture farmers cut down production of the four common fish in China. This led to a drop in the overall production of freshwater fish feed.

 

Furthermore, the production of feed for certain unique freshwater species, such as snakehead fish, diminished as well. Snakehead fish was seen as a ‘windfall fish' that had fetched huge profits for farmers. The production of snakehead fish in China is currently at 700-800 thousand tonnes, while the sales volume of feed for the fish is around 800,000-900,000 tonnes.

 

However, the snakehead fish farming sector also suffered serious losses for the 10 months since October 2022. Only less than 20% of farmers were expected to break even or make a small profit in 2023 last year. As the rearing volume of snakehead fish seeds dropped from five billion in 2022 to 3.5 billion in 2023, the production of snakehead fish feed dwindled in tandem by about 300,000 tonnes.

 

Looking forward, market participants are split concerning the outlook of China's aquafeed market in 2024. Based on the first quarter data, quarterly output was 6% lower compared with the same period in 2023, a weak start for the year.

 

It is expected the output of aquafeed products for common species will continue to fall this year. Also, overall aquafeed production is projected to fall further in 2024.

- Shi Tao, eFeedLink