Animal feed prices in Vietnam to stabilise

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.