November 25, 2011

Foreign-invested companies controlled as much as 95% of the Vietnamese shrimp feed market, said Duong Ngoc Minh, vice chairman of the Vietnam Association of Seafood Exporters and Producers (VASEP).

Minh said that foreign-invested enterprises such as Uni President, CP and Tom Boy have seized most of the local shrimp feed market and control the feed prices.

In the low-season of shrimp farming, shrimp feed with protein ratio of 35-40% is priced from VND28,000-30,000 (US$1.33-1.43) a kilogramme. In the high-season, the price is much higher, ranging from VND38,000-42,000 (US$1.81-2.0) per kilogramme.

At those prices, the foreign-invested manufacturers enjoy lofty profits as input costs to produce shrimp feed are pretty low, Minh said.

Also, foreign firms hold around 70% of the market of shrimp breeds while supply fails to meet demand, creating favourable conditions helping them control prices accordingly.

Vietnam's shrimp farming costs are higher than that of neighbouring countries, because foreigners predict high prices of feed and breed, Minh concluded.

The local firms' inability to set up long-term business is main reason attributed to their defeat to foreign competitors, Minh added.

Vietnam is forecast to produce 403,600 tonnes of shrimp in 2011, rising 12.8% from last year. The country exports shrimp products to the US, Japan, EU, Canada, S. Korea and many other countries.