1. 1

2. ChinaFeedOnline.com

3. Brief feed industry Feeds composition Fishmeal in animal feeds Fishmeal in fish feeds Changing/problems/future My comments Agenda

4. ChinaFeedOnline.com

5. 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. Brief – Supply & Demand

6. ChinaFeedOnline.com 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); Brief – China Feed Industry

7. ChinaFeedOnline.com Brief – China Feed Industry Fishmeal arrival Qty 1,394,410.45 mt Jan-Sept 05 ExporterMarket ShareAvg CIF/ Sept 05 Avg CIF/ Jan 05 Peru70.72%$696.69$613.58 Chile16.91%$746.48$687.53 Alaska3.54%$936.29- Russia1.77%$906.46$879.69 Argentina1.49%$763.58$715.33 Resources: China Customs

8. ChinaFeedOnline.com

9. 1.Complete feed 2.Concentrate feed 3.Premix Feed Composition – 3 Categories

10. ChinaFeedOnline.com -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. Feed Composition (1) - Complete Feed:

11. ChinaFeedOnline.com water + Feed Composition (1) Complete Feed Fishmeal included 100% Complete feed

12. ChinaFeedOnline.com - 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 Feed Composition (2) – concentrate

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

14. ChinaFeedOnline.com -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 + 91- 95% corn/plants proteins Feed Composition (3)- Premix

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

16. 16

17. ChinaFeedOnline.com SpeciesFish meal chicken0-3% Baby pig5-8% Remark: - Simple, without adding any other ingredients. - Estimated production 72.25 million tons (up 5.9%) in 2005 Fishmeal in Animal Feeds – Complete feed (typical % of fishmeal) + 5.9%

18. ChinaFeedOnline.com +12%concentratefishmeal7-15% dairy- Additives- +60%Corn +12%Soybean meal +16%Compound soy 100% Remark: - 7-15 % of Fishmeal after diluted is about 2% - Widely used in pig in North, farmers have their own grains. Fishmeal in Animal Feeds – Concentrate (typical formula for pig) +2.5%

19. ChinaFeedOnline.com Ingredients%typicalsuggested premix4% Fishmeal 3%* 0% corn63% Soybean meal27%20% Wheat bran3%6% Compound soy-* 8% 100% Remark: - Compound soy replaced fishmeal - Premix demand increased sharply Fishmeal in Animal Feeds – Premix (typical formula for pig) +9.2%

20. ChinaFeedOnline.com

21. 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 Fishmeal in Fish Feeds – 3 Major species group

22. ChinaFeedOnline.com Ingredientshrimptilapiaturtle fishmeal23-40%* 5 -15%* 38 -60% Bone meal--3% premix3.5%1%- Soy meal20%12.12%12% Groundnut meal7.4%10% Canola meal-19.34%5% wheat bran/corn meal6%13.4%30% others--- total100% Fishmeal in Fish Feeds – typical formula

23. ChinaFeedOnline.com

24. 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. Changing – Why ?

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

26. ChinaFeedOnline.com Unit:200320052004-2005 000,000 tonsproductionEstimatedChanges Complete feed 64.0672.25 + 5.9 % Concentrate 20.4621.3+ 2.5 % premix 3.92 3.98+ 9.2 % Others -- - Total 87.8197.20+ 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. Changing (1) – Production 2003/05

27. ChinaFeedOnline.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.

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

29. ChinaFeedOnline.com 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. Changing (3) – Substitute Meat and Bone Meal

30. ChinaFeedOnline.com 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). Changing (3) – Substitute Plants protein + Amino-acid

31. ChinaFeedOnline.com 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. Changing (4) – Aquatic farming increased

32. ChinaFeedOnline.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 100k 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.

33. ChinaFeedOnline.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.

34. ChinaFeedOnline.com 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) Changing (7) – Consumers’ Eating Habit and Urban Population increased

35. ChinaFeedOnline.com 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 10 6 Changing (8)- Government Policy

36. ChinaFeedOnline.com 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. Problems -

37. ChinaFeedOnline.com 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. Future -

38. ChinaFeedOnline.com speciesfishmealchanging Baby pig5-8%Unchanged/SD Young pig3-5%Reduced or MBM Adult pig -Free fishmeal Young chick2-6%0 - 3% Future – Fishmeal % in Animal Feeds

39. ChinaFeedOnline.com SpeciesFmealchanging OmnivorousTilapia20-25%Plants protein Carp19-24%Partly MBM Grass5-10%Or no fishmeal CarnivorousEel65%White fmeal % down Prawn20-30%-- Low value5-10%Full/partly MBM High value15-20%FAQ to SD fishmeal CrustaceansTurtle60%-- Future – Fishmeal % in Aquatic feed

40. ChinaFeedOnline.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.

41. ChinaFeedOnline.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.

42. ChinaFeedOnline.com

43. 43