Feed Facts

by Teresa Acklin
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Currency devaluations and volatility wreak havoc with region's feed industry.

      Vietnam

   Coarse grains (1993-1997 average):

Production1,242

Imports27

Exports106

Change in total domestic use* (1991 through 1996)+129%

   *Data on feed use only are unavailable.

   Vietnam continues to operate as a command economy moving only gradually toward market liberalization. Vietnam's feed sector slowly is developing a more commercial orientation, spurred by rising urban incomes and government efforts to improve diets nationwide. Until recent years, most feed mills were small, low-tech operations, but several modern commercial facilities have been constructed through joint ventures with overseas companies in the private sector.

      Thailand

   Coarse grains (1993-1997 average):

Production3,756

Imports202

Exports98

Change in domestic feed use (1991 through 1996):+22%

   Thailand's feed industry has faced a mixed bag of effects from the region's economic troubles. On one hand, domestic meat intake dropped sharply since the baht was devalued in July 1997, with pork consumption down by 20% to 30%, chicken meat by 10% to 20% and eggs by 10%. On the other hand, the baht devaluation also sparked sharp increases in broiler meat exports. The export increase and expectations of an economic recovery should boost Thailand's feed use of coarse grains in 1998-99 by about 7% from the previous season, close to the 1996 record of 4.2 million tonnes.

      Malaysia

   Coarse grains (1993-1997 average):

Production43

Imports2,275

Exports0

Change in domestic feed use (1991 through 1996):+45%

   Malaysia relies heavily on imported feed ingredients, and the feed sector has been hit hard by the currency turmoil. With the ringgit losing nearly 48% of its value against the U.S.dollar, demand for imported maize and other feed ingredients sold on a dollar basis has tumbled; this has made Chinese maize imports more attractive. Even so, feed importers remain cautious in their purchase plans, generally buying hand to mouth, to reduce currency exchange risks. Many observers expect an economic recovery to begin later this year, which would brighten the outlook for the Malaysian livestock and feed sectors.

      Philippines

   Coarse grains (1993-1997 average):

Production4,400

Imports284

Exports0

Change in domestic feed use (1991 through 1996):+21%

   Feed demand in 1998 is expected to increase by around 3% to 4%, as Filipino meat consumption continues to grow despite the currency crisis and economic slowdown. But the feed industry has undergone some changes related to the crisis. Large integrators are expanding feed production to supply small and medium scale livestock producers, who have been forced to halt their own production of feed because of high interest rates. Consequently, feed production market share has shifted away from small and medium feed millers to the larger integrators.

      Indonesia

   Coarse grains (1993-1997 average):

Production5,830

Imports993

Exports77

Change in domestic feed use (1991 through 1996):+55%

   Domestic feed use of coarse grains in 1998 is estimated to drop to 2 million tonnes, the lowest since 1989 and a level that effectively wipes out the consumption gains of the 1990s. Poultry processing earlier this year dropped to 30% of normal, while feed production in the first quarter was 20% of normal. Only four of 11 major feedlots in Lampung — the area that supplies Jakarta — have continued operations through the crisis. But the worst may be over. Feed production in the second quarter was estimated to have increased to 30% of normal levels , and observers expect feed and poultry activity to recover to about 50% before year-end.

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