Value Chain Analysis of the Egyptian Aquaculture Feed Industry04 August 2014
The commercial aquaculture feed industry in Egypt is growing at a rapid rate. As a result, the number of fish feed mills has increased from just five mills producing about 20,000 t per year in 1999, to over 60 mills with a current production estimate of 800,000–1,000,000 t/year, writes Abdel-Fattah M. El-Sayed, WorldFish, Malaysia.
The performance of the aquafeed industry in Egypt is not well understood, as the value chain structure has not yet been mapped. This study aims to assess the status of the fish feed sector in Egypt, with an emphasis on: mapping and understanding fish feed value chains, describing the main actors and stakeholders within the chain, assessing value chain performance, identifying major strengths and weakness of the sector, and suggesting appropriate actions, management and development strategies.
Two structured questionnaires in English and in Arabic were drafted. They were distributed to fish feed mills and fish farmers. Information was collected from the farmers and feed mills by interview, phone call, email or fax. Twenty-five fish feed mills were interviewed, 17 from the private sector and 8 from the state-owned/public sector. A total of 34 fish farmers, representing a range of production systems and aquaculture areas, were also interviewed.
The results of the study indicate that the value-chain of the fish feed sector in Egypt is relatively simple. It includes four main stakeholder groups/actors: feed ingredients/additives and raw material suppliers; feed producers; feed marketers and traders; and fish farmers.
- The main constraint facing the fish feed industry and fish farmers is rapidly increasing prices. A large proportion of feed ingredients used in Egyptian animal and aquaculture feeds are imported. In 2011, imports accounted for 99 per cent of soybean cake, 97 per cent of soybean seeds and 50 per cent of maize used or consumed in Egypt. Importation is carried out by a number of private sector importers. Meanwhile, international market prices for key raw materials have risen rapidly in recent years. These factors have contributed to increased prices for fish feed ingredients and fish feeds.
- An estimated 90 per cent of Egyptian fish feeds are produced by 50 private sector fish feed mills, producing both conventionally pelleted feeds (80–85 per cent) and extruded feeds (15–20 per cent), most of which (85 per cent) are formulated to contain 25 per cent crude protein (CP).
- The public sector owns 9 mills, producing an estimated 10 per cent of total commercial fish feed production. None are equipped to produce extruded feeds so they only produce conventionally pelleted feeds, usually formulated to contain 25 per cent crude protein (CP).
- Employment in private sector feed mills was estimated at 29.2 full-time equivalent (FTE) jobs per mill, with an average of 3.9 jobs per 1000 t of feed produced. Employment levels in public sector feed mills were higher (average 90.3 FTE per mill) while productivity was lower (13.3 FTE per 1000 t of feed produced). Based on these calculations, the total full-time number of jobs in fish feed manufacturing is estimated at about 4000–5000 jobs. Males represent 90 per cent of the employees in the public sector and 96.6 per cent in the private sector.
- An estimated 80 per cent of fish feeds produced by public sector feed mills is sold through traders or retailers, compared to only 15–20 per cent of fish feeds from private sector mills. Fish feed traders and retailers add around 3–6 per cent to the price of fish feeds. Some traders sell feed on credit, with an additional price increase of around 2–4 per cent.
- Fish farmers stated that feed costs represent around 80 per cent (70–95 per cent) of the total operating costs of their farms. If they purchase feed on credit, they pay 3–6 per cent more and are likely to receive poor quality feed. However, they are forced to do this because they lack access to other sources of credit and financial support. Farmers said they lack basic knowledge about feed and feed management as they do not receive training or quality control inspections.
The study summarized the major constraints facing the fish feed industry in Egypt and proposed the following recommendations for better management and development of the sector:
- reduce dependency on expensive feed ingredients
- improve capacity for production of high quality feeds
- increase employment opportunities in the aquaculture feed sector
- improve access to credit
- improve access to training
- strengthen the legal and policy environment for feed production, quality control, handling, storage and trading.
You can view the full report by clicking here.