March 18, 2004

Vietnamese Feed Producers Call For Tax Relief

Animal feed producers have called for the government to reduce taxes on raw feed materials as the industry attempts to recover from the devastating impact of the bird flu outbreak.

The Vietnam Association of Animal Feed Producers requested that tariffs for the import of 500,000-600,000 tons of corn and soybean be temporarily removed as well as a 5% reduction in import tax and VAT of lysine.

Vietnam Feed Association Chairman Le Ba Lich said that the measures must be undertaken to help the domestic poultry and feed industry recover and avoid greater losses.

The association also seeks to extend their import tax payments within 60 days from 30 days previously and freeze debts for poultry feed producers.

"The bird flu outbreak has caused losses of around VND700 billion ($44.8 million) for 260 animal feed producers in Vietnam. Around 200,000-230,000 tons of animal feed has deteriorated due to bans on the transport and consumption of the feed, causing significant losses to producers," Lich said.

Vietnam spent $218 million on importing a total of more than 900,000 tons of animal feed and raw materials in 2002, of which soybean, corn and fish powder accounted for 10-40%.

"The prices of animal feed, especially for poultry, will increase by at least 10-15% after the outbreak, as feed producers look to be compensated for losses and higher production costs," Lich said.

The association said that 30% of the country's total annual animal feed output of three million tons is for poultry.

There are 15 foreign-invested companies and joint ventures with foreign involvement holding 50% of the domestic market share. Key players include US's Cargill, Thailand's CP Group, France's Proconco and Guyomarch, Taiwan's TTC, China's NewHope and South Korea's Cheil Jedang Group.