May 20, 2005

Vietnam to play up dairy industry

Vietnam's Ministry of Industry has recently approved a plan to spend more than VND2,195 billion (US$139.8 million) in growing its milk industry by 2010.

This plan will include the development of facilities and equipment for all stages of the milk production process in anticipation of higher domestic demand and exports of milk. Domestic consumption is expected to reach a per capita annual average of 10 kg by 2010. 

Concentrated cow breeding areas will be developed to supply more than 300,000 tonnes of raw fresh milk - 40 per cent of the projected demand for 2010 - with milk processing plants being developed alongside the breeding areas, and existing plants also expected to continue production expansion.

The ministry requires Vietnam's dairy producers to achieve a collective annual production capacity of 228 million litres of milk by 2010.

At present, Vietnamese milk prices are 17 percent above the global average - around VND600 (3.8 US cents) a kg - a situation blamed on the small scale of the domestic dairy cow raising industry and the primitive technology used to monitor milk quality.

The price imbalance forces many domestic firms to buy cheaper imported milk, with the result that Vietnam spends around US$300 million each year on imported dairy products.

Inadequate raw milk resources means that up to 85 percent of domestic demand is met by imports, despite recent growth in domestic production at 85,000 tonnes of raw milk in 2003,  three times that in 1998 figure.