April 11, 2011
Vietnam''s feed producers unable to stabilise local prices
Vietnam''s animal feed makers are forced to hike prices of their products despite the government''s price stabilisation programme, as import prices are on the rise.
Animal feed producers rely heavily on imported materials, and the rising prices in the global market are forcing them to hike local prices, said Le Ba Lich, president of Vietnam Animal Feed Association, in an annual meeting of the association in Ho Chi Minh City.
In 2009, the prime minister issued a decision which placed animal and fish feeds and 11 other essential items such as rice, sugar and milk in the national price stabilisation programme.
As required, producers and vendors of these items have to register their selling prices, but Lich said only a dozen or so big enterprises in the feed industry have registered prices with the Ministry of Finance. Lich said that the number of registration would rise in the coming time as required by the ministry.
However, prices of materials for producing animal feedsuch as corn, soy, fish powder, and cassava have increased by 30% over the last year and are set to increase further. Therefore, current measures to stabilise feed prices do not work.
Pham Duc Binh, director of the Dong Nai-based feed maker Thanh Binh Co., said rising materials prices and other cost factors are weighing on local enterprises. "In addition to heavy dependence on imported materials, high interest rate, high electricity and fuel bills also forced animal feed makers to increase selling prices if they do not want to run into losses," Binh said.
The government''s instructions to stabilise feed prices is not feasible in the absence of measures to help reduce the production costs, Binh said. "The price control measures like registration with the Ministry of Finance are just temporary, and in fact it has not proved effective. In the long term, we need other measures to keep prices under control," he said.
Le Ba Lich also said that the association would send a proposal to the government for necessary intervention.
The total animal feed output last year was 12.9 million tonnes but the country had to import nearly eight million tonnes of materials, said the Ministry of Agriculture and Rural Development''s Department of Livestock Production. The heavy reliance on imports has pushed up local prices especially when the global price accelerates.
The increasing prices of animal and fish feeds have pushed many farmers in the Delta Mekong into losses as animal feeds account for some 70% of the total expenses.
Vietnam has about 27.3 million of pigs, 5.9 million of cattle, 2.9 million buffalos, 1.2 million goats and over 30 million poultries.