Middle East Conflict Threatens India's Feed Industry

India's $12 billion animal feed industry is facing mounting pressure as the ongoing conflict in the Middle East disrupts supply chains, raises input costs and threatens the sector's long-term growth outlook. Shipping disruptions through the Strait of Hormuz, soaring energy prices and fertilizer supply constraints are increasing production costs for feed manufacturers, prompting analysts to reassess earlier growth projections.

The closure of the Strait of Hormuz is particularly significant because it handles nearly 45% of global seaborne methanol exports. Methanol is a key raw material for formic acid, used in feed preservation, and methionine, an essential amino acid in poultry nutrition. Producers have already announced emergency surcharges of EUR 250 per metric tonne on formic acid and EUR 150 per metric tonne on propionic acid.

India's dependence on Gulf imports further compounds the challenge, with more than 40% of its fertilizers sourced from Gulf countries. Industry experts warn that if disruptions continue for 90 days or longer, maize and soybean production could decline, tightening domestic feed raw material supplies. India's compound feed industry currently produces around 60 million metric tonnes annually, including 40 million tonnes of poultry feed, 18 million tonnes of cattle feed, and 2 million tonnes of aqua and shrimp feed.

Despite these near-term risks, long-term demand fundamentals remain positive, driven by rising meat and dairy consumption, population growth and continued investment in India's livestock sector. However, the crisis underscores the importance of strengthening supply chain resilience, diversifying feed ingredient sources and reducing dependence on imported raw materials to sustain future growth. (Feed Strategy)

Source: Dairynews7x7 3 Aug, 2026 Read full story here

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