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Animal feed prices face regulation

Published on 23 October, 2009, Last updated at 08:59 GMT

VietNam – Animal feed has been listed as one among several goods and services whose prices need to be regulated, according to a Government newly-released decision.

There are currently 314 feed manufacturers throughout Viet Nam. Many of them are subsidiaries of major global producers.

The decision came after a period during which the feed industry has been under strong pressure, as its prices in the domestic market are 15-10 per cent higher than in other regional countries.

"Viet Nam is an agricultural country but it has failed so far in supplying animal feed to local farmers," said Le Ba Lich, chairman of the Viet Nam Feed Association.

According to Lich, prices of animal feed in Viet Nam are higher, because more than 50 per cent of materials used to produce feed animal are imported and the country has faced a material shortage.

"The country has had to import about 3.7 million tonnes of raw materials to produce animal feed. This materials include soy-bean meal, corn and other ingredients," he added.

It was estimated that the country had to spend about US$2 billion per year to import the necessary raw materials to produce animal feed and imported machinery to produce the feed.

In this situation, foreign companies have been able to maintain high prices due to a lack of domestic competition.

There are currently 314 feed manufacturers throughout Viet Nam. Many of them are subsidiaries of major global producers.

About 65-70 per cent of the domestic market share is dominated by foreign companies. These companies have advantages in technology, capital and experience.

With an understanding of the changing markets and being able to produce the required raw materials, these companies have dominated the domestic market.

"These companies produce raw materials and sell their products to domestic companies at high prices. This is due to the short-coming of the animal feed industry in Viet Nam," said Lich.

Lich suggests that animal feed must receive help from the Government like foodstuff and fertilizer producers.

"Scientists should study ways to produce the raw materials," Lich added.

He also proposes that the Government should encourage foreign investors to invest in producing raw materials.

"We also need to invest in planting corn and cassava to stabilise the market," he added.

Every year, Viet Nam produces 6 million tonnes of animal feed and 2.4 million tonnes of fish food. This only meets 50 per cent of total demand.


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