The price of
animal feed, on the rise since December, dramatically surged in
May, said Le Ba Lich, Chairman of the Viet Nam Feed Association.
|
The
owner of an animal feed store in Quang Binh Province. |
Mixed-feed prices have gone up by 19%; chicken
feed has increased from VND2,400 per kilo to VND7,200; pig feed
from VND3,800 to VND4,300, and shrimp feed from VND11,000 to
VND16,000.
Mr Lich said the
higher costs would eat into producers' profit margins. He said
many feed makers have reduced production and are hesitant to sell
existing stocks, adding that domestic animal feed output had
dropped by 20% in the past year.
The Chairman
explained Vietnam imports almost all raw materials for its feed
production - approximately 1mil tonnes per annum - from North
America, Argentina and the EU.
Animal feed has
become more expensive because the costs of its key ingredients
have soared: soybean price has increased from US$220 per tonne in
2002 to the current price of $380; gluten from $334 to $520 a
tonne, and corn prices soared a whopping 180% to $140 per tonne in
just a year.
These prices are
due a combination of poor crops in source countries, slow
turnaround of goods at ports in Argentina and Brazil, and higher
international freight charges.
An additional
factor is prices of locally available materials such as bran, corn
and cassava have also risen.
Nguyen Dang Vang,
head of the Livestock Breeding Institute, warned the feed price
increases will ravage the animal breeding sector, in particular as
the country's poultry stocks recover after the avian flu.
Vietnam's breeding
industry churns through about $1mil worth of manufactured feed
annually.
Mr Vang said the
increasing costs had obviously affected confidence as first-level
distribution agents are reluctant to supply product to second-tier
agents and breeders, worried that payments will be defaulted
because of the higher prices.
He said soaring
feed costs have seen many large-scale breeders in southern
provinces and HCM City stop rearing and take up other jobs.
Some fish breeders
in An Giang Province said the 20-30% spike in costs makes them
less profitable.
Mr Lich said only
when raw material price decreases on the world market, will prices
go down.
Mr Vang forecasted
the cost of animal feed will remain high until August when
countries offer fresh soybean supplies on the market and prices
are expected to drop by $10-12 per tonne.
(Source: Viet
Nam News)
|