August 19, 2011

 

Vietnamese feed manufacturers dominated by foreign firms

 

 

Vietnam's animal feed producers are dominated by foreign investors and the prices of animal feed have increased by 40% in 2011, according to the Animal Husbandry Department under the Ministry of Agriculture and Rural Development.

 

The animal feed prices have been adjusted for more than 10 times since the beginning of this year, the department said on Thursday (Aug 18).

 

Many foreign firms have joined hands with each other to manipulate the local animal feed market, the department said.

 

By mid-August, Vietnam has only 20 foreign-invested firms engaging in animal feed production, but these firms now control a combined market share of between 65% and 70%.

 

The department noted that domestic livestock and cattle raisers have gained little profit as a result of high prices of animal feed and animal offsprings.

 

At present, offsprings are also being supplied by three foreign firms only. They are Papfa, CP Vietnam and Emivest.

 

Some offsprings suppliers, meanwhile, have forced buyers to purchase their animal feed products at the same time. These feed products are often sold at high prices.

 

The domination of foreign firms over both domestic animal feed and offsprings market has left nearly 30% of domestic feed makers to go bankruptcy due to weak competitiveness, the department said.

 

Pham Duc Binh, vice president of the Vietnam Animal Feed Association, has urged the Vietnamese government to have suitable policies to encourage sustainable production of materials for animal feed production.

 

The current zero export tax for cassava and corn hurts the local animal feed production, Binh added.

 

While Vietnam has been viewed as a country with great agricultural potential, its animal feed sector has experienced periodic shortages of raw materials, with 50% of which being the imported ones.

 

The country is expected to import about US$3 billion of raw materials for animal feed this year.

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