News 233 views last update:6 Aug 2012

Animal feed prices in Vietnam to stabilise

Since the beginning of 2007, the price of animal feed In Vietnam has increased many times. However, Hoang Kim Giao, deputy director of the Ministry of Agriculture and Rural Development's Livestock Department doesn't expect that this rise will continue.

Industrial feed prices in Vietnam have always been 15-20% higher than in other countries, because production costs are higher. The reason they are higher is because a lot of animal breeding is done on a small scale, so there are higher transport costs. In addition, the country has no deep water port that allows large ships to dock, so transporting is more costly.

Long term solutions
To keep feed prices in check we must look to the long term, said Hoang Kim Giao. We must for example invest in ports, transport and storage facilities. We must also invest in infrastructure to reduce transport costs. We need to produce more so that we don't have to depend on imports.

The Breeding Department has suggested that the Breeding Association open a national feed exchange where producers can advertise prices and consumers can search for what they want to improve choice. Breeders should do business on a larger scale and enter into contracts with feed producers. Breeders have to know exactly how much feed they will need at each stage of their animals' development. That way, if the industrial feed price increases, the meat price will not be affected as much.

Foreign competition
There are 241 feed producers in Vietnam, of which 35% receive foreign investment. These firms have higher production capacities because they use more modern technology. If we don't invest in the domestic industry, foreign-invested producers will occupy the lion's share of the market.

Firstly, we should invest in production lines to increase capacity. Some feed enterprises should merge and form joint-ventures. Since 2006, many feed producers with a capacity of five tonnes per hour have gone bankrupt, Hoang Kim Giao commented. He added that he doesn't expect the feed price to increase much, if at all.

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