March 25, 2009
Vietnam government denies monopoly in animal feed pricing
The Vietnam Ministry of Agriculture and Rural Development denied that a monopoly exists in the country''s feed pricing since no company holds 30 percent of the total market share.
Nguyen Xuan Duong, Deputy Director of the
Livestock Husbandry Department under MARD said biggest market share holder in the feed market, the
CP Group, only holds 20 percent of the market share.
Doubts were raised as domestic feed prices have not dropped, despite the sharp falls in the prices of feed material prices in the world''s market.
Duong said that "there has been no sign showing that big feed producers dominate the domestic market."
He added that that the feed material prices in the world have increased again since the end of February and early March (rice brand up by 15 percent, cassava up between 15 to 20 percent, soyoil cake up between 20 to 25 percent). But feed producers have not jacked up prices since they have stored materials enough for a two or three- month production.
MARD has urged the Government to put several categories of feed materials, the supply of which has been relying on imports, to have prices stabilized.
One of the products is soyoil which Vietnam imports 100 percent or 2 to 2.5 million tonnes worth US $1 billion from the 2008 price to cater to the domestic demand
According to Le Ba Lich, Chairman of the Animal Feed Association, Vietnam is currently importing between 45 to 92 percent of the total value of feed materials. Aside from soyoil, feed producers also import 500,000 to 1 million tonnes of corn, 2.5 to 3 million tonnes of corn, 2.5 to 3 million tonnes of rice bran and others like lyzin and DCP.
In general, Vietnam needs to import ten types of feed materials out of 22 to make finished feed products. In 2008, Vietnam imported four million tonnes of animal feed materials.
Aside from urging the State to control prices of feed materials, MARD has also suggested taxes of imported raw materials which could not be produced domestically. The ministry has asked the state to assist enterprises to collect materials while world prices are still low.
In long term, the ministry said that it is necessary to set up reasonable prices to push the production of feed materials domestically.
Duong said Vietnam''s small enterprises need to cooperate with each other to import feed materials in large quantities at low prices.
Duong said a Vietnamese company signed a contract on soyoil at US$320/tonne only but when prices rose to US$400/tonne, the exporter did not abide on the contract stipulations. The Vietnamese company could not take legal proceedings against the foreign partner in this case because of the weak financial capability and low legal capability.