India Animal Feed Market

Market Overview

The India animal feed market size was valued at USD 1.0 billion in 2023 and is projected to reach  USD 2.2 billion by 2032, registering a CAGR of 9.0% during the forecast period (2024-2032). Population growth, growing affluence, urbanization, and changing dietary choices all boost India's animal feed market share.

Animal feed is the nourishment given to domestic animals throughout animal husbandry. It is designed to provide animals with all the necessary nutrients for growth, upkeep, and reproduction. Animal feed is critical in maintaining the health, productivity, and overall well-being of cattle, poultry, and aquaculture animals. The growing purchasing power of the population and favorable demographics in the country, from rural to urban areas, all contribute significantly to the country's compound feed industry. People are eating more animal products, such as dairy, meat, fish, and eggs, as their disposable incomes increase in cities, needing more high-quality feed. This is a crucial component driving growth in the compound feed sector. 

Recently, it was discovered that raw materials needed in animal feed manufacturing, such as soybean meal, sorghum, and maize, are being diverted for human use, causing feed scarcity. Furthermore, the high cost of these raw resources and their price and supply instability are prompting industry players to shift to more sustainable and cost-effective ingredients for animal production.

Highlights

1. Poultry generates the highest revenue share by animal type.
2. Cereal dominates the market by ingredients.

Market Dynamics

India Animal Feed Market Drivers:

Rising Demand for Animal Protein

As India's economy grows and urbanizes, dietary tastes change toward higher consumption of animal protein, such as meat, eggs, and dairy products. Rising earnings, changing lifestyles, and cultural influences all play a role in driving this trend. India's population is expected to reach 1.4 billion by mid-2023, accounting for 17.76% of the global total. This makes India the world's most populous country, surpassing China by April 2023. India's population density is 481 per square kilometer, with a median age of 28.2 years. Cities are home to 36.3% of the Indian population. India has a sizable and expanding customer base for animal protein. The growing population, urbanization, and lifestyle changes drive greater demand for animal products.

According to the Times of India, India's per capita meat availability in 2022-23 is 7.1 kilos per year, up from 5.7 kilograms in 2016-17. Furthermore, the Indian poultry business has expanded significantly in recent years. In 2023, India consumed more than four million metric tons of poultry meat. To accommodate rising demand, the country's poultry population has increased quickly. In 2022-2023, India's total egg output is expected to be 138.38 billion, with 118.16 billion coming from commercial production and 20.20 billion from backyard poultry. The country's overall meat production for the same period was predicted to be 9.77 million metric tons, with poultry accounting for 4.995 million tons or 51.13%.

Additionally, the National Dairy Development Board (NDDB) predicts that India's fluid milk production will reach 212.7 million metric tons (MMT) in 2024, up 3% from 2023. The NDDB expects India to produce 0.8 MMT of nonfat dry milk and 6.9 MMT of butter in 2024, a 4% and 2% increase over 2023, respectively. Thus, Rising demand for animal protein drives up demand for animal feed, which supports the growth, health, and productivity of livestock, poultry, and aquaculture species. This trend creates chances for feed makers to expand their operations, innovate their products, and contribute to the long-term development of India's animal protein sector. 

India Animal Feed Market Restraints:

Feed Ingredient Availability and Cost

Feed manufacturers in India have hurdles due to the need for essential feed materials, including maize, soybean meal, and fish meal, as well as shifting pricing. Maize is necessary in animal feed formulas, particularly poultry and livestock diets. Maize shortages in India can result from weather-related disruptions, pest infestations, and supply chain inefficiencies, causing maize prices to rise and feed makers to struggle. According to data from the Department of Agriculture, Cooperation, and Farmers Welfare, Government of India, maize production in India has fluctuated in recent years due to changes in weather, pests, and illnesses. On May 1, 2024, the average price of maize in India was Rs.2,177.82 per quintal. The lowest price was Rs.1,450, and the highest was Rs.4,000. In March 2024, the average cost of maize in Bihar's Gulabbagh exceeded Rs.2,400 per quintal.

Similarly, soybean meal is a vital feed ingredient that provides protein and essential amino acids in animal diets. India primarily relies on imported soybean meal, and fluctuations in global soybean prices, currency exchange rates, and trade policies can all impact supply and cost, influencing feed formulation and pricing tactics. Data from the Ministry of Agriculture and Farmers Welfare show that India relies on imported soybean meal to meet domestic demand. Fluctuations in global soybean prices, currency exchange rates, and trade policies can all impact the cost and availability of soybean meal in the Indian market, making it difficult for feed makers to manage input costs while keeping feed affordable for farmers. In January 2024, soybean meal prices in India averaged Rs.41,000 per tonne, ranging from Rs.40,500 to Rs.47,000. This represents a modest increase from the average cost of Rs.42,500 per tonne in December 2023.

Moreover, feed ingredient shortages and cost changes can affect feed makers' production schedules, formulation consistency, and pricing strategies, resulting in operational issues and margin pressure. High feed component costs can raise overall production costs for livestock, poultry, and aquaculture products, reducing farm profitability and consumer affordability of animal protein.

India Animal Feed Market Opportunity:

Expansion of Aquaculture

India is one of the world's major producers of farmed shrimp, and aquaculture contributes significantly to the country's seafood exports. The United Nations Food and Agriculture Organization (FAO) predicts that aquaculture will account for approximately two-thirds of India's fish production by 2030. The coastal states of Andhra Pradesh, Gujarat, Tamil Nadu, and West Bengal are prominent shrimp-producing areas. In 2023, India's shrimp production was 9.7 million tonnes, including 6.4 million tonnes farmed and 3.3 million tonnes from fisheries. The Society of Aquaculture Professionals (SAP) predicts that India's shrimp production in 2023 will reach 8-9 lakh tonnes. However, due to unfavorable farmer mood, production is anticipated to fall 20-25% in 2024.

In addition to shrimp, there is a growing interest and investment in freshwater fish farming, which includes carp, tilapia, catfish, and pangasius. Freshwater aquaculture is growing in Maharashtra, Karnataka, and Kerala. In 2023, India produced 175.45 lakh tonnes of fish, making it the world's third-highest producer. Freshwater fish are the most frequent aquatic animals raised in India, with carp and pangasius being the most popular. However, fish growers are expanding into other species. 

Furthermore, the Indian government's Blue Revolution initiative intends to increase fish production and productivity through aquaculture interventions, fisheries infrastructure development, and technology adoption. Several states have started aquaculture development initiatives through the plan to improve sustainable fish farming practices and enhance fish production. Furthermore, India's aquaculture business has attracted considerable investments from both domestic and international firms, resulting in the expansion of shrimp hatcheries, aquafeed mills, processing plants, and infrastructural development along the coast.

Moreover, expanding the aquaculture business allows feed makers to provide customized aquafeed solutions that meet the nutritional needs of various fish and shrimp species. Feed makers can use research and innovation to create high-quality aquafeed formulations that improve growth rates, feed conversion ratios, and disease resistance in farmed fish and shrimp.

Regional Analysis

The Indian animal feed market analysis is conducted in South India, North India, East India, and West India.

South India Dominates the Indian Market

South India is the most significant Indian animal feed market shareholder and is estimated to grow at a CAGR of 8.8% over the forecast period. Cattle are raised for their milk since Hindu culture dominates India and considers bovine animals to be sacred. Large production volumes enable increased milk consumption in India. In 2022-2023, India's per capita milk availability was 459 grams per day, more than the global average of 322 grams per day in 2022. As a result, increased demand for milk is expected to benefit the compound feed market over the forecast period. Aside from milk production, several sections of India, such as Assam, Kerala, and southern India, have gradually grown beef consumption.

Thus, South India is the primary market for animal feed, with the largest market share. Due to increased poultry product manufacturing, the market has expanded in Andhra Pradesh, Karnataka, and Tamil Nadu. South India's chicken consumption is expected to reach 2.96 million metric tons (MMT) by 2023. This represents an increase from the 2022 projection of 2.9 MMT. Telangana has experienced considerable investment in feed manufacturing in 2023. The state government organized the first Food Conclave in April 2023, attracting over two dozen investment commitments totaling Rs 7,218 crore. These promises are to the food processing, edible oil, aquaculture, and meat processing industries. 

Furthermore, in 2023, Kerala's dairy market was valued at INR 555 billion, with cow and buffalo milk accounting for the majority of production. The Dairy Development Department has provided each farmer with up to 20 cows by 2023 and intends to distribute animals to 64,000 farmers below the poverty level soon. 

West India is anticipated to exhibit a CAGR of 9.1% over the forecast period. West India's states include Goa, Gujarat, Maharashtra, and Rajasthan. Western India has had the highest share in cattle feed output, followed by the north, south, and east. Amul Dairy began producing chicken feed in Gujarat and Maharashtra in July 2023, intending to expand into Punjab, West Bengal, and Madhya Pradesh later that year. Amul Dairy tries to distinguish itself from competitors by providing vegetarian poultry feed. 

Additionally, the State Planning Board of Maharashtra has allotted Rs 500 lakh to execute cattle feed subsidy scheme components in 2023-24. These factors are projected to drive the country's market over the forecast period. 

Segmental Analysis

The Indian animal feed market is segmented based on animal type and ingredients.

The market is further segmented by Animal type into Ruminants, Poultry, Swine, and Aquaculture.

Poultry feed is the most popular product type on the market, owing to India's rapid increase in per capita meat consumption. Poultry includes domestic birds grown for meat and eggs, such as chickens, ducks, turkeys, and geese. Poultry feed formulations are tailored to birds' nutritional requirements at various production phases, such as starters, growers, finishers, and layers. Poultry feed often comprises grains, protein sources (such as soybean meal), vitamins, minerals, and additives to promote growth, egg production, and immunological function. Specialized feeds can be designed for broilers, layers, breeders, and free-range poultry systems to improve performance and health.

In addition, according to a report from the Department of Animal Husbandry and Dairying India, chicken production in India has advanced significantly over the last four decades, switching from traditional agricultural approaches to a commercial production system based on cutting-edge technology. According to India's 20th Livestock Census, the total poultry population in 2023 is 851.81 million, a 16.81% growth over the 2012 census. This consists of 317.07 million backyard poultry and 534.74 million commercial poultry. 

Aquaculture is the cultivation of aquatic organisms like fish, shrimp, mollusks, and crustaceans in controlled conditions such as ponds, tanks, or cages. Aquafeed formulas are crucial to farmed aquatic animals' growth, health, and production. Aquafeeds comprise various protein sources (such as fishmeal, soybean meal, and insect meal), carbs, lipids, vitamins, minerals, and additives. Aquaculture species' nutritional requirements vary according to their species, life stage, water temperature, and environmental circumstances. Specialized feeds can be designed for certain species (e.g., carp, tilapia, catfish, shrimp) and production systems (e.g., freshwater, marine, intensive, extensive) to improve growth, feed conversion ratios, and disease resistance.

The market can be further bifurcated by ingredients into cereals, cakes and meals, byproducts, and supplements.

Cereal will account for the most significant proportion of the market by ingredients in 2023. Cereal grains are the primary source of carbohydrates and energy in animal feed compositions. Corn (maize), wheat, barley, sorghum, oats, and rice are some of the most often utilized cereal grains for feed production. These grains are high in starch and provide easily accessible energy to livestock, poultry, and aquaculture animals. Cereal grains can be consumed whole, cracked, or processed into various forms, such as flakes, pellets, or meals, to improve digestion and flavor. They are frequently used in feed formulations for ruminants, poultry, swine, and aquaculture animals to meet their energy needs and promote development and output.

Byproducts are secondary or residual materials derived from various food and agricultural processing sectors that can be used as feed additives. Distiller grains (from ethanol manufacturing), wheat bran, rice bran, beet pulp, citrus pulp, and molasses are common animal feed byproducts. These byproducts frequently contain significant nutrients such as protein, fiber, vitamins, and minerals, making them appropriate for feed formulations. Byproducts minimize waste, lower feed production costs, and provide alternative animal nutritional sources, contributing to sustainable feed production and resource utilization.