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MARD denies monopoly in animal feed pricing
Nguyen Xuan Duong, Deputy Director of the Livestock Husbandry Department under the Ministry of Agriculture and Rural Development (MARD), affirmed that the monopoly in animal feed pricing could not exist in Vietnam since no company holds up to 30% of the market share in Vietnam.
Duong said that biggest market share holder in the feed market, the CP Group, only holds 20% of the market share only.
MARD has proposed the Government to put several categories of feed materials, the supply of which has been relying on imports, into the list of products which need to have prices stabilized. For example, the list of the products which have the prices controlled by the State.
One of the products is soya oil cake. Vietnam now imports 100% of soya oil cake needed to feed the domestic demand, or between 2-2.5mil tones per, worth some US $1 billion if considering the 2008’s price.
According to Le Ba Lich, Chairman of the Animal Feed Association, said that Vietnam is currently importing between 45-92% of the total value of feed materials. Besides soya oil cake, domestic enterprises also have to import 500,000-1mil tons a year of maize, 2.5-3mil tons per year 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 tons of animal feed materials.
While having asked the State to control the prices of several groups of feed materials, MARD has also suggested the material import taxes of the products which could not be produced domestically. The ministry has asked the state to assist enterprises to collect materials when the world’s prices are low.
In long term, the ministry said that it is necessary to set up reasonable prices to push up the production of feed materials domestically.
Duong from MARD said that Vietnam’s small enterprises need to cooperate with each other, so as to be able to import feed materials in large quantities and at low prices.
Duong related a story that a Vietnamese company signed a contract on importing soya oil cake at US $320/ton only. As the price unexpected rose to over US $400/ton, the exporter ‘escaped’ the affair. 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. Meanwhile, no partner would dare escape from the contracts made with big groups like Cargill or CP Group.
When asked if there exists the monopoly in feed pricing, Duong affirmed that the monopoly could not exist in Vietnam, as no feed producer can hold more than 30% of the market share.
The question has been raised after people found out that the domestic feed prices have not decreased, despite the sharp falls in the prices of feed material prices in the world’s market.
“There has been no sign showing that big feed producers dominate the domestic market,” Duong said.
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%, cassava up between 15-20%, soya oil cake up between 20-25%). However, feed producers have not raised the sale prices of finished products as they have stored materials, which is enough for a two or three month production.
Ha Yen
vietnamnet
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