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Stock-feed firms struggle with imports, exchange
Nearly 40 enterprises that make feedstock for cattle, pigs, poultry and even fish have closed shop so far this year, according to Bui Thi Oanh from the Ministry of Agriculture and Rural Development's Animal Husbandry Department.
Processors spend more than $1 billion a year importing most of the ingredients, such as soy beans, corn and flour.
Prices for the various types of feed-stock have risen 60 to 110 per cent in the past year while the cost of imported ingredients has also risen considerably.
Much tighter credit, high loan-interest and exchange rates, and high foreign-exchange transaction fees have added to the problems.
"We did not have enough foreign currency (US dollars) to pay our suppliers because the banks sold US dollars at such a high level," said Do Kim Chi, a representative of New Hop Co.
On top of all this, supplies of ingredients held in reserve by manufacturers became exhausted. Complicated import procedures, plus outbreaks of diseases did not improve the overall outlook.
Nguyen Xuan Duong, deputy director of the Animal Husbandry Department warned that wood prices for stock-feed ingredients were likely to increase a further 20 to 30 per cent in the near future, threatening many more producers with bankruptcy.
Vietnam is now being forced to import ready processed stock-feed because of the shortage of domestic supplies.
This year, the nation's demand for animal food is 18 million tonnes, of which domestic manufacturers meet only about 79 per cent. In the first six months of the year, nearly 3.5 million of tonnes of feed worth US$ 1.5 billion had to be imported.
Stability efforts
In an effort to stabilise the market and support manufacturers, the Ministry of Agriculture and Rural Development has asked the Government to make stock-feed products and ingredients essential commodities.
This would enable import taxes to be dropped to zero from the present 5 per cent.
However, the ministry is initially guiding farmers on how to economise on the use of feed supplements.
Hoang Kim Giao, director of the Animal Husbandry Department, said the growth of animal husbandry was only 0.03 per cent in the first half of the year". To reach an annual growth rate of 4-5 per cent, in the second half of the year, the industry must grow by 8-10 per cent at least," he added.
The Livestock Breeding Department of the Ministry of Agriculture has already declared that it will focus on developing intensive farming areas for growing soy beans, corn and grass with high nutritional value.
VNS
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