November 7, 2023

 

Comprehensive Strategic Partnership to improve Vietnamese feed factories' access to US raw materials

 

 

The Comprehensive Strategic Partnership established between Vietnam and the United States will "benefit greatly" animal feed factories in Vietnam, said Phạm Quang Anh, director of the Vietnam Commodity News Center.

 

The partnership will improve access to raw materials from the US.

 

Following US President Joe Biden's visit to Vietnam, the Vietnamese Ministry of Agriculture and Rural Development and the US Grains Council had a meeting to discuss the promotion of bilateral trade in agriculture. The meeting paved the way for potential future agreements, which will facilitate the import of US corn to the country.

 

With another source of corn unlocked, Vietnamese animal feed producers will be able to expand their pool of suppliers and get more competitive offers.

 

According to the Department of Livestock Production, the country imported 8.2 million tonnes of feedstock in the first six months of 2023, worth US$3.4 billion. The US remained Vietnam's second-largest exporter of soybeans but was never among the major exports of corn to the country. 

 

There are 269 factories of animal feed in Vietnam to date, with a total capacity of 43.2 million tonnes per year. However, the factories are running under capacity, producing just 20.8 million tonnes annually.

 

Nguyễn Xuân Dương, chairman of the Animal Husbandry Association of Vietnam, cited supply-demand imbalance as the main cause behind the factories not meeting their designed output.

 

He called on the government to not incentivise the construction of new factories until 2030 to avoid overcapacity. He said if such factories are built, they should be located in areas where the potential of livestock farming has not been fully realised.

 

He also called for measures to encourage the use of alternative materials, such as seaweeds, in animal feed production so as to be less reliant on corn and soybean imports.

— VNS