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Saturday 18 July 2015
Think Grain Think Feed July Issue
INTERVIEW WITH DR. P.E. VIJAY ANAND, DIRECTOR, INDIA - FEED/MEAL PROGRAM, USSEC
DR. P.E. VIJAY ANAND, DIRECTOR, INDIA - FEED/MEAL PROGRAM, USSEC
Please share your views on USSEC's role in the growth of Indian soybean industry viz-a-viz animal feed industry.
USSEC (US Soybean Export Council) works in 80 countries across the world with 125 representatives engaged in International marketing to establish preference for U.S soy, for applications in the animal feed and human food applications. It has its presence in India since 1996. USSEC does not limit its focus onto soy marketing and promotion only, but also addresses issues of any soy-using/soy-dependent industry in the most holistic manner, rather the entire industry's value chain is dealt with. The overall well being of the industry is expected to connect to better soy utilization. USSEC is well known for driving significant industry changes across the world, including India.
During early days of USSEC in India, the industry did not know much about soy and its uses and benefits in animal and human nutrition. The animal feed industry which hardly used any soy products then, is now dependent on about 4.4 million tons of soy meal. With education, demonstrations and extension efforts made by USSEC in India, soy utilization in India has grown significantly to a level that last year 66 % of soy meal was used within the country. Existing trade and utilization benefits derived from soy by the end users in the animal feed industry is thus a significant contribution to the growth of animal feed and soy industries. As we move on issues change and newer challenges come in and USSEC keeps an alert watch to try and address them proactively.
India is a protein-needy country and any effort made to educate people on nutritional benefits of animal protein, food safety and reaching animal products easily to a consumer; will increase demand of meat products, which in turn connect to increased animal production, increased feed and soy utilization. USSEC recognizes that demand for soy in India is moving on S&D patterns akin to China (though not so large) and efforts on improving understanding and soy utilization is expected to embark India as a potential market for U.S soy in future.
USSEC (US Soybean Export Council) works in 80 countries across the world with 125 representatives engaged in International marketing to establish preference for U.S soy, for applications in the animal feed and human food applications. It has its presence in India since 1996. USSEC does not limit its focus onto soy marketing and promotion only, but also addresses issues of any soy-using/soy-dependent industry in the most holistic manner, rather the entire industry's value chain is dealt with. The overall well being of the industry is expected to connect to better soy utilization. USSEC is well known for driving significant industry changes across the world, including India.
During early days of USSEC in India, the industry did not know much about soy and its uses and benefits in animal and human nutrition. The animal feed industry which hardly used any soy products then, is now dependent on about 4.4 million tons of soy meal. With education, demonstrations and extension efforts made by USSEC in India, soy utilization in India has grown significantly to a level that last year 66 % of soy meal was used within the country. Existing trade and utilization benefits derived from soy by the end users in the animal feed industry is thus a significant contribution to the growth of animal feed and soy industries. As we move on issues change and newer challenges come in and USSEC keeps an alert watch to try and address them proactively.
India is a protein-needy country and any effort made to educate people on nutritional benefits of animal protein, food safety and reaching animal products easily to a consumer; will increase demand of meat products, which in turn connect to increased animal production, increased feed and soy utilization. USSEC recognizes that demand for soy in India is moving on S&D patterns akin to China (though not so large) and efforts on improving understanding and soy utilization is expected to embark India as a potential market for U.S soy in future.
What is the current crop outlook for this year's soybean production in India and the world at large? Please throw some light on its consumption within India and its export patterns.
The monsoon in soy planting regions has been good. I and my colleagues physically surveyed the status last week (June 23-26). The soy farmers and the soy production industry is expecting a crop which will be better than last year. We also saw that sowing has been successful and the young soy plants (6-8 inches tall now) are in a healthy state. Industry sources say that about 11 million tons of soybeans can be expected. However writing these statements in June may be a bit too early to rely as predictions. The feed industry should watch meal production data rather than watch soybean production data.
Indian consumption for the last 5 years increased by 49% (between 2010 and 2014) and has been showing a very steady growth. Exports in the same time frame dropped from 4.11 million tons in 2010/11 to 2.01 million tons in 2013/14. This indicates that growth in the domestic sector is predictable, dependable and thus is a steady and growing opportunity.
The world produced 188.30 million tons of soy meal in 2013/14 and 197.60 million tons in 2014/15, flushing the globe with ample stocks, and this in turn, has resulted in relatively lower prices. At most of the reference periods Indian soy was a lot more expensive and thus, India could not compete with international suppliers to export its meal. The global outlook for this year too looks good and future contract prices are ruling low. I will urge everyone in the animal feed industry to take time and check for soybean and soy meal prices for available on CBOT/CME sites and become knowledgeable on that aspect. With Indian stocks expected to be high in the current year (due to present production forecast and a rather higher carryover from last year) prices are expected to see a down trend. This will be favourable for the animal feed industry and they are likely to take up soy inclusion and depend more on it.
According to recent report released by Rabobank titled 'Losing Steam' it predicts that as Southeast Asia's demand for soy meal increases, soy meal exports from India are expected to become negligible within five years. Your comment?
I do concur with the Rabobank's report on soy meal S&D. The bank also brought out a similar forecast way back in 2010 which spoke on similar lines and I see that current trends match those predictions too. Soy meal demand has been steadily increasing in the south East Asian region (about 13.75 and 14.79 million tons was imported in 2013/14 and 2014/15 respectively). Few years back south East Asia was a large market for Indian soy meal but is seen shifting its dependency onto larger suppliers because of the size of businesses they run, the need to be predictable on the raw material front, to be cost effective, and to be sustainable in businesses.
The lacunae I find in planning in India is that many animal feed industries do not seem to be forecasting future needs of soy meal and corn viz a viz demand. If we consider the present soy meal requirement of India and its neighbours (Pakistan, Bangladesh, Sri Lanka and Nepal) about 5.94 million tons of meal has been utilized in 2014. With stock of 6.30-6.60 million tons of soy meal in the last two years, the only excess meal available in the region will be about 0.36-0.66 million tons. Rapid growth in meal consumption in the Asian subcontinent region will consume most of the meal in a couple of years. Internal growth/consumption is much more rapid than production of meal and if this trend continues, we will not be left with any stocks for export. Trends between soy production and utilization seem to be headed in opposite directiros when examined over a five year period (2010/11 2014/15). Soybean, Soy meal and soy crush showed a change of + 3.96%, (-) 18.27% and (-)10.75% respectively while utilization in India grew by + 49.70% and that of neighbouring countries is + 107.52%.
Could you please share the theme and the purpose of Soy Partnership Forum 2015?
The purpose of Soy Partnership Summit is to bring together all participants in the soy value chain under one roof once a year. I think it is worthwhile that soy users spend time understanding the commodity, suppliers and buyers. We conceived this idea in 2009 when we noticed that buyers and suppliers only talk on the phone but never meet each other to understand intricacies of trade and technical processes. Due to business/knowledge utility and popularity, the representation and interest towards this event is growing by 15-20% each year.
At the event we try to provide more networking and discussion time so that everyone walks out with a sense of satisfaction. A greater partnership promoted will lead to better planning, efficiencies and improved trade processes.
What changes have you witnessed in the Indian Livestock (Poultry, Dairy and Aqua) industry over the course of your career?
There was a time when no soy meal was used in early 90's and today the industry is dependent on soy meal as a reliable, consistent form of vegetable protein. These dependable traits of soy meal come in by virtue of its superior processing technology as compared to other protein meals. Two important aspects have played key roles in animal production systems - genetics and nutrition. All of us in the industry have seen that the result of genetic improvements coupled with scientific feeding, including the use of soy meal, have yielded lower FCR's, higher body weights of chicken, reduced time to reach harvest, and in layers we have seen onset of early lay, reduction of pullet eggs and increase in total number of eggs produced by the bird has increased.
On the soy meal front; to benefit the poultry industry we identified a program called "Crush for Meal" because meal quality is priority for animal feeds. Today the industry has access to good quality meal and there is awareness among soy crushers as to what feed industry's expectations are. However we still believe that a lot more should happen on the soy front and that is one of the reasons for conducting the "Soy Partnership Summit" as an annual event for the soy industry and the feed/food industry.
As for aquaculture, we indentified that the country never used any formulated feed to a degree that it should. Thus it was like a 100% opportunity for the aquaculture industry to improve itself through feed usage. From 2003 we designed programs and commercial demonstrations to show how feed works and brings in good returns. Thus the feed industry which was in a zero position in 2006 (though India appears 2nd on the worlds charts for aquaculture produce), today has about 1.5 million tons of installed capacity. Only about half is currently under actual use indicating that there can be higher utilization of feed if more of the traditional farming systems adopt technology.
Please share your views on use of genetically modified soya as animal feed.
In 2012, 170 million hectares of land, around 12% of the global arable land, was planted with genetically modified (GM) crops of soybean, corn, cotton and canola in 28 countries. United States of America planted the largest area, 69.5 million hectares, while Brazil showed highest increase in area planted with biotech crops (6.3 million hectares).
India planted 10.8 million hectares of Bt cotton and the farm income from 2002 to 2011 was 12.6 billion dollars. Income from Bt cotton among small farm households in India made a positive impact on food security and dietary quality, suggesting transgenic crops can be important in food security strategy. Cotton is a success reference of a GM product in India and the cotton seed meal is used almost extensively in the dairy feed industry in India since many years. And milk is the end product emerging from its use and all of us know milk forms a significant part of Indian diet across the country.
The European Commission recently (April 2015) authorized 17 biotech events for feed and food use. The events included 10 new authorizations for GMO's for food/feed use and 7 renewals of existing authorizations. The traits underwent a full authorization procedure, which included a favorable scientific assessment by the European Food Safety Authority (EFSA). European norms are often very strict and GM happenings in Europe can be positive, ready references to others in the world. Misconceptions and negative news that we see regarding GM products are often not sound science based. When the ultimate users are human beings, research and development has to ensure safety to humans and am sure this is kept in mind before any development or investments are made for GM related work.
I strongly feel that there should be a science-based approach or justifications taken before commenting on any GM related issues. If one were to look deep into dependence of India on products with GM connection, then we may have to say “No” to many things in India. Milk with a touch of GM cotton seed in India is all over the country and I don't think India can do without milk and milk products. Vietnam grows fish on imported soy meal, and all other feed stuffs that have GM connections and most Indian hotels use Vietnam produced fish.
What future challenges do you see in Indian feed industry? What would the feed industry look like by 2020?
India appears in the list of top 5 feed producers in the world according to Alltech's Feed Survey report 2015, producing 29.43 million tons of feed. USSEC estimated feed production as 30.50 million tons in 2013. Usually feed that is used for poultry breeders and aquaculture (shrimp/fish) are often not taken into account or estimated correctly. Both these sectors put together account for 3 million tons of feed. Nevertheless we have closer estimates which definitely serve planning purpose. USSEC also forecasts that the feed utilization in India will grow to about 40 million tons by 2020 (taking Alletch's feed survey for 2014 as base line + adding its own annual feed estimates). To be able to cater to 40 million tons of animal feed (barring dairy feed not taken for soy calculations), the Asia subcontinent will need 9.43 million tons of soy meal @ 18% inclusions and 10.48 million tons @ 20% inclusion. By terming the region as Asia subcontinent we mean India, Bangladesh, Pakistan, Nepal and Sri Lanka. To produce this quantity of meal exclusively for animal feeds, the region will need about 13 million tons of whole soybeans.
Here is a small opportunity analysis - An extra serving of 100 g chicken consumed in India translates to 400,000 MT of feed that relies on 100,785 MT of soy meal. Similarly one extra egg eaten each year will need 202,000 MT of feed to produce that quantity of eggs and will use up 20,252 MT of soy meal. I am sure the consumption in India will be more than 100 g chicken and one egg per person per year.
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