A lot of challenges are awaiting domestic feed industry when Vietnam becomes an official member of the World Trade Organization due to its heavy reliance on imported input materials, said Le Ba Lich, chairman of the Vietnam Feed Association.
Imported materials currently account for more than half of the production cost, and this leads to high prices of animal feed, making the country’s farm products like milk, egg and meat less competitive.
Last year, the country spent US$500 million importing 1.68 million tons of materials, accounting for half of the production value. Main material imports include corn, soybean cakes, bone powder, wheat and minerals with most coming from the US.
Statistics from the Livestock Breeding Department showed that the country currently has almost 250 animal feed firms with an annual combined capacity of 5.3 million tons, meeting just 45 to 50 per cent of domestic demand.
As most materials are subject to import tariffs and value added tax, and coupled with high freight, prices of home produced feed are 10 to 20 per cent higher than the average in the region, and 20 to 25 per cent higher than the world average, he said.
As prices of animal feed are sky high, the local husbandry industry will face difficulties in competing against imported farm products once Vietnam joins WTO.
Vietnam annually uses up around nine million tons of feed, 80 per cent for pigs, 18 per cent for poultry, and the remainder for cattle.
Of the volume, local animal feed factories are able to supply 4.6 million tons at the most, fulfilling only 40 per cent of the total demand, forcing the domestic animal feed production sector to heavily rely on imports.
Experts said Vietnam’s animal feed industry and farming industry could only cope with imported products after the year 2010.
Vietnamese
