Spending billions of dollars to carry coal to Newcastle

VIET NAM - Though an agricultural country, each year Vietnam spends billions of US dollars to import materials to process animal feed. Since early June 2007, animal feed producing companies have been increasing the prices of animal feed by several thousands of dong per 25kg sack.

12 July 2007

3 minute read

This is the eighth time so far this year animal feed producers have raised the price of thier products, afflicting husbandry breeders.

Ms Hy, the owner of a chicken farm in the southern province of Dong Nai, said that so far this year the price for poultry feed had risen by VND25,500-VND33,000 per 25kg sack. However, it is still lower than the increase for pig feed, from VND40,000-50,000/sack.

Many husbandry breeders said that they were trying to find the way out by mixing animal feed themselves. According to Dang Van Chu, a breeder in Vinh Cuu, Dong Nai Province, instead of buying 100% of mixed animal feed, he only buys part of concentrated animal feed from factories to mix with local materials like maize, mash, etc. Mr. Cu said that by doing this, the price for animal feed could be reduced by VND1,500 to 2,000/kg.

“The biggest disadvantage of the local animal feed industry is its dependence on imported materials. When the prices of those materials rise in the world market, the prices of local products must increase as well,” said an animal feed producer.

According to the Vietnam Animal Husbandry Agency, local sources of materials can satisfy 70 per cent of the demand. Even materials that can be produced locally like maize are imported in quantities of 500,000 to 600,000 tonnes per year. Last year, Vietnam had to import more than $750 million worth of maize material to serve animal feed production.

“This is very unreasonable. The reason is that we don’t attach importance to investing in this variety,” said Le Ba Lich, Chairman of the Animal Feed Association.

According to Mr. Lich, the productivity of maize in Vietnam is quite low compared to that in other countries, just 3.6 tonnes per hectare. Though the country devotes more than 1.1 million ha of land to grow maize, Vietnam still has to import maize worth hundreds of millions of US dollars each year. One of the reasons, according to Mr. Lich, is the irrigation system in maize growing areas is not invested in properly.

Vietnam also has to import around $400 million of soybeans and over $100 million of fish meal.

“Vietnam is one of the leading exporters of seafood in the world. It has a coastline of more than 3,000km and a flotilla of thousands of boats, but it still has to import fish powder from Peru,” said Mr. Lich.

He said that Vietnam could be completely self-sufficient in fish meal for the animal feed processing industry if fisheries paid more attention to this field.