August 30, 2014
Vietnam Feed Market Monthly Review: Animal feed prices in Vietnam high despite plunging raw material costs
An eFeedLink Exclusive
Animal feed prices in Vietnam high despite plunging raw material costs
While prices of feed raw materials have been going down to record lows globally, prices of animal feeds remain high in Vietnam
. Reason: most of the raw materials in these feeds were imported long before prices started falling.
The retail prices of feeds in Vietnam: complete feed
for hogs, VND10,500/kg (US$0.50)/kg; concentrated feed for hogs, VND14,500/kg (US$0.68/kg); aquaculture feed, VND9,000/kg (US$0.42/kg); broiler feed, VND12,000/kg (US$ 0.56/kg); and, layer feed, VND11,000/kg (US$ 0.51/kg).
In August, import of raw materials, such as corn, soy and bone meal, sharply rose. Corn shipments in that month alone hit 171,000 tonnes, equivalent to US$45 million. All in all, from January to August this year, corn imports reached 2.83 million tonnes at a total cost of US$734 million.
In terms of volume, the increase was 2.3 times compared to the same period in 2013. But since the purchase cost was lower, the increase in cost was only 1.8 times.
The import volume for soy this year is also expected to reach 3.2 million tonnes.
Import of feed and feed ingredients for August, according to the Ministry of Agriculture and Rural Development (MARD), was estimated at US$323 million, up 8.6% compared to the same month last year.
For the first eight months of the year, the value of animal feed and feed ingredient imports hit US$2.25 billion. These imports came from Argentina, accounting for 33%; the US, 13.9% and China, 10.7%.
Le Ba Lich, chairman of the Vietnam Animal Feed Association, says animal feed production outside aqua feed is expected to hit 14 million tonnes in 2014, up 700,000 tonnes on-year. According to him, aquaculture feed will also increase by 10% on-year.
He says he expects feed consumption to rise significantly this year due to the livestock sector's recovery from the recent disease epidemic and the continuing high prices for hogs and poultry.
A sharp increase in Vietnam's seafood exports is also driving the rise in feed production, he adds.
With hog prices stable at between VND54,000/kg (US$2.55/kg) and VND55,000/kg (US$2.60), says Nguyen Tri Cong, chairman of the Dong Nai Animal Husbandry Association, pig production is projected to expand and so is the demand for feeds.
Total feed production, including aqua feed, hit 17 million tonnes in 2013, according to statistics from the Vietnam Animal Feed Association. About 65% to 70% of this total output came from independent feed millers, 15% from the CP Group and 10% from Proconco.
With prices of soymeal, soy and corn hitting record lows till end of the, compared to those of 2013, due to expected record high outputs in the US and South America, Vietnam's feed grain and feed raw material imports are also seen to rise sharply this year.
Vietnamese feed mills and raw material importers are happy with the current price outlook in the global market. The price of soy is predicted to further drop 22% from its current price in the fourth quarter of 2014, while the price of corn, already the lowest in four years, is expected to remain steady till end of the year.
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