Rising feed prices lead to difficulties for livestock industry: MARD

VIETNAM, March 21 –

Many large companies have invested in the development of animal production and food processing sectors. — Photo cucchannuoi.gov.vn

HÀ NỘI — The recent increase in the price of animal feed has caused more difficulties for the animal production of companies and farmers.

After the Tết (Lunar New Year), many animal feed products have seen a further price increase due to the impact of the increase in the world price of raw materials for the production of animal feed compared to the end of 2021.

Specifically, the price increased by approximately 22% for soybean oil, 21% for soybeans, 16% for soybean meal and 9% for corn.

The main reason is due to the influence of unfavorable weather conditions in the main growing areas of South American countries that supply a large volume of raw materials for the production of animal feed in the world.

Transportation costs are also constantly rising due to rising gasoline and oil prices. In addition, the conflict between Russia and Ukraine has a significant impact on corn and wheat prices at home and abroad.

The Most Favored Nation (MFN) tariff for certain imported animal feed products has been reduced from the end of 2021, for example from 3% to zero for wheat and from 5% to 2% for maize .

However, the cost of animal feed accounts for 65-70% of the cost of production in the livestock sector. Therefore, the record increase in these feed prices has caused enormous difficulties and challenges for the domestic livestock industry, especially pig farming.

“With the increase in the price of raw materials for the production of animal feed from 2021 to today, the prices of finished animal feed products have increased by 18-22%. Rising feed prices have squeezed farmers’ profits, and even some households and farms are suffering losses,” said Tống Xuân Chinh, an official with the Ministry of Agriculture and Rural Development (MARD).

According to Chinh, Deputy Director of the Animal Production Department of MARD, a reduction in feed prices by 3% could lower the cost of animal production by 2%.

At a recent conference on solutions to develop sustainable pig production and the management of feed production and trade organized by MARD, experts said that reducing import taxes on feed for animals was only an immediate solution. Home-based raw material production is a long-term solution for the domestic livestock industry.

Local enterprises in the livestock industry are encouraged to invest in the application of high technology and biotechnology to rapidly produce chemical and biological products as raw materials for pig feed. These products would replace natural feed sources and imports. In addition, they must make efficient use of locally available raw materials.

However, Dương Tất Thắng, director of the Animal Production Department, said the livestock industry lacks effective cooperation and animal production chains.

“The industry mainly has small-scale animal production, and the development of professional and modern production processes is limited,” Thắng said.

There is a lack of market information and forecasts, so most farmers are still passive and dependent on traders and the middle stage, he said.

On the other hand, Việt Nam has signed 17 free trade agreements, including new generation trade agreements such as CPTTP and EVFTA or bilateral agreements with many advanced animal production countries.

Therefore, it will be more difficult for domestic livestock products, including pork products, as Việt Nam is forced to open its market to imported foods from the United States, Brazil, Russia, India and from Germany. Domestic products therefore face strong competition with imported products.

However, according to MARD, the pork industry in Việt Nam has a large consumer market with nearly 100 million people and 15 to 18 million tourists per year which may increase in the coming years. In addition, mainland China, Hong Kong, Taiwan and Malaysia are potential import markets for pork products from Việt Nam.

So far, Việt Nam’s livestock sector has contributed 25.2% of GDP to the agricultural sector.

More and more Vietnamese and foreign companies have invested in the development of livestock production and food processing chains, including Masan, Dabaco, Tân Long, Trường Hải, Hòa Phát, CP, Deheus and Japfacomfeed. —VNS

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