The July 29 fire at BASF's plant for vitamins A and E in Ludwigshafen, Rhineland-Palatinate, Germany, led to the company temporarily suspending deliveries of these vitamins.

 

Following the incident, European suppliers and traders have refrained from offering prices for both vitamins. Additionally, feed additive traders in Vietnam were closely monitoring the impact.

 

In the weeks that followed, the prices of vitamins A and E decreased in China indicating that buyers were holding back purchases after an initial panic between late July and mid-August.

 

Buyers were concerned that supplies would face shortages as NHU's Shandong, China plant halted maintenance operations in the July-September period.

 

There was a significant spike in prices before and after the BASF incident. Previously, vitamin A (1000) was priced at US$21, while vitamin E was at US$11+. Since the fire, these have surged to US$72 and US$20, respectively.

 

Complicating matters further, BASF in October announced a delay in resuming the production of vitamins and carotenoids. Vitamin A production could only resume in April 2025, with vitamin E and carotenoids following in July next year.

 

With BASF not able to resume production soon, prices could spike further, and feed producers may take the opportunity to raise prices.

 

What does it mean for Vietnam?

 

The Vietnamese livestock industry relies heavily on imported feed ingredients, with approximately 80% of additives being imported, as reported by the Department of Livestock Production (DLP).

 

In 2023, Vietnam allocated over US$574 million to import feed additives. Despite having 225 additive production facilities, only 10 of these are capable of producing additives in raw form, such as DCP, CaCO3, copper sulfate, probiotics, and herbs. These facilities lack the capacity to produce primary additive ingredients, such as vitamins, amino acids, minerals, and other essential additives.

 

Although additives constitute only 1-3% of a livestock diet, they represent 12-15% of the total cost of feed formulas. Consequently, any fluctuations in additive prices will significantly impact feed prices, posing a substantial challenge for local producers.

 

In the short term, Vietnam relies heavily on China, the primary exporter of those products.

 

What to expect in 2025?

 

Short-term supplies are expected to be limited. Prices will likely stay strong unless BASF resumes production. Chinese producers will also strive to secure export deals to compensate for sluggish domestic sales.

 

China has a high production capacity for vitamins A and E. If the availability of raw materials remains stable, overall production of these vitamins should gradually increase as Chinese producers ramp up their output.

 

Another critical factor is the cautious approach of Chinese manufacturers. With the uncertain outlook for China's economy, vitamin producers will carefully control their output due to high costs.

 

For the longer term, producers in Vietnam will need to keep in mind other factors that will affect local feed prices.

 

Diseases like African swine fever can impact feed demand, which in turn affects the production of feed.

 

Additionally, stricter regulations on environmental standards have resulted in the closure of thousands of farms, which dampens the consumption of feed.

 

Also, with Vietnam's ban on antibiotic use for disease prevention in livestock set to take effect at the start of 2026, the industry may need to find ways to rear more livestock with less feed and support animal health without antibiotics. This is where feed additives come into play, which can influence the output and price of feed ingredients.

 

It's important to note that BASF is not the sole or primary supplier in this market; companies like Adisseo and Alltech also have a presence in Vietnam.

 

According to an industry source, a foreign company, with an office in the country, recently promoted polyphenols as a cost-effective product that can partially replace vitamin E in livestock diets.

 

As can be seen, other companies could enter the market to address any shortages in feed additives.

 

About EFL AG-DATA

 

EFL AG-DATA is a startup incubated by Singapore's Nanyang Technological University's Innovation and Enterprise Company (NTUitive) Incubator Program. It is developing an agricultural hub that will revolutionise the feed-to-meat supply chain in China and Southeast Asia countries through data-driven solutions. EFL's mission is to empower farms through innovative data-based services that solve complex problems and enhance productivity.

- Ha Thu, EFL AG-DATA