February 18, 2011
Vietnamese feed prices continue to rise
Vietnam''s animal feed price is seen to continue to go up because of higher prices of raw materials and the recent depreciation of the Vietnamese dong against the US dollar, according to animal-feed producers.
Pham Duc Binh, general director of the Dong Nai province-based feed maker Thanh Binh Corporation and deputy chairman of the Vietnam Animal Feed Association, said the price of animal feed willl likely rise by about 3%.
Prices are expected to go up after producers have exhausted all of their current stock, Binh said.
Previously, animal-feed producers stocked raw materials for production for three months, but due to the high interest rates on bank loans they have borrowed, they are keeping them for only two months.
Animal-feed companies import about 55% of their raw materials to make animal feed like corn, soy and wheat products.
They also import 90-95% of dried soy cakes, fish powder and meat powder, and 100% of minerals and vitamins to produce animal feed.
In addition, Vietnamese exporters will impose higher purchase prices for raw materials, including cassava.
There are additional concerns that the price of electricity, petrol and coal will rise soon.
Last year, Vietnam imported US$2.7 billion of raw materials to make animal feed, compared to US$2.1 billion in 2009.
The country is expected to import about three billion of raw materials for animal feed this year.
Because animal feed accounts for 70% of production costs, breeders will be affected adversely.
The price of animal feed has risen three times this year, with each time increasing by VND100-250 (US$0.0051-$0.0128) per kg. Last year, the price of animal feed rose 14 times.
Le Ba Lich, chairman of the Vietnam Animal Feed Association, said the price of animal feed increased as a result of the continuous increase in raw materials prices.
Binh said the production costs of raising pigs and industrial-bred chicken in many localities have become higher than selling prices.
Small-scale breeders will suffer more losses than large-scale professional breeders, he added.