Russian-Ukrainian crisis hits local livestock industry
VIETNAM, March 5 –
Health officials check the quality of a pig farm in the southern province of Bạc Lieu. NV’s livestock industry is likely affected by rising tensions between Russia and Ukraine. — VNA/VNS Photo Tuấn Kiệt
HA NỘI — Việt Nam’s livestock industry is likely to be hit by rising commodity and feed prices since the start of the Russian-Ukrainian conflict, Agribank Securities JSC (Agriseco) said.
Russia and Ukraine are the world’s largest and third largest wheat exporters, and the dispute has pushed prices up 17.8%.
Ukraine is also the fourth largest maize exporter, accounting for 22% of world supply. Maize prices have risen 8.4% since the start of the fighting.
Currently, local breeders and animal feed producers mainly depend on raw materials imported from these two countries.
According to a report by Agriseco, rising tensions between Russia and Ukraine will affect global food prices. These two countries now account for around 29% of world wheat exports and 19% of maize.
The report says rising food prices are inevitable in the context of the current escalation of tensions between Russia and Ukraine.
Meanwhile, the domestic livestock industry largely depends on raw materials imported from other countries, ranging from wheat to grains. He noted that rising food prices would affect the input costs of local livestock and feed businesses.
The Vietnam Commodity Exchange reported that prices of agricultural products will fluctuate due to the impact of supply and demand. Other factors such as economics, policies and politics rarely appear, but they have a substantial impact on the price of agricultural products.
According to the Livestock Department of the Ministry of Agriculture and Rural Development (MARD), the country’s animal feed industry imports 90% of its raw materials.
While the price of raw materials has generally accounted for around 80-85% of the cost of production, the price of animal feed has increased by 16-36% during the period 2020-21. The biggest increases were in the price of cereals.
According to a report by Yuanta Securities Vietnam Quanta, the price of commodities has risen sharply since the start of 2021 due to high transportation costs.
Animal feed manufacturers rapidly increased their imports of raw materials. The price of corn has increased by 50%, soybeans follow it with 38% and wheat with an increase of 62% compared to the start of 2021.
Meanwhile, pet food prices are up about 30% from the start of 2021.
The company predicts that feed prices could decline in the second half of this year as the flow of goods improves.
According to the company, it will be difficult for local animal feed producers to keep up with rising commodity prices.
The Ministry of Industry and Commerce predicted that the local livestock industry will continue to face many difficulties this year due to the development of the pandemic. The disruption of the global supply chain will also continue to affect the local livestock industry. — VNS