|VietNamNet Bridge – The import tariff on feed materials will increase as of January 1, 2010, which will create higher feed prices and affect the local husbandry industry.
According to the Vietnam Animal Feed Association, 70 percent of materials needed to make feed are those subject to import tariff increases. Fish paste, for example, will increase from zero to five percent, maize from zero to five percent, and wheat from 10 percent to 15 percent.
In fact, the animal feed prices have risen two times by 300-400 dong per kilo in total since mid-November 2009 due to higher prices in the world and the dong/dollar rate increases. Feed prices are now selling at 7,200-7,400 dong per kilo.
Nguyen Quoc Trung, General Director of Japfa Vietnam, a livestock company, believes that the higher import tariff on feed materials in early 2010 will surely affect pricing.
According to Trung, maize is some $240 per tonne. As maize will be imposed a five percent tariff, the domestic maize price will be $12 or 222,000 dong per tonne, 110 dong per kilo more expensive. To produce one kilo of chicken, breeders need 1.7-1.9 kilo of feed.
As such, the maize import tariff increase alone will make production cost of every kilo of chicken increase by 374-418 dong. If counting other expenses, input costs will rise 500-1,000 dong.
In the first 11 months of 2009, import revenue for feed materials reached $1.7 billion, while the figure for all of 2009 is expected to reach two billion dollars.
Pork, chicken will see prices increase
Pork and chicken prices have been increasing sharply with chicken prices up by 7,000-8,000 dong per kilo.
Tran Quang Trung, the owner of a Dong Ngai pig farm, said that livestock relies on imported materials because maize and rice bran are gone. Trung has predicted meat price increases for the Tet holiday.
Meat imports have been decreasing over the last few months. Statistics showed that in September, Vietnam imported 2,500 tonnes of frozen chicken, while the figure dropped to 1,800 tonnes in October and then dropped to 1,000 tonnes in November. The 35 percent decrease in imports has pressured the market price.
Phung Khoi Phuc, Director of D&F Dong Nai, also thinks that food prices will escalate for Tet, explaining that the pork supply has decreased because farmers discouraged by losses have decreased the scale of their animal herds.
Big wholesale markets in HCM City have also reported sharp falls in supply. Binh Dien Market has reported decreases of 15 percent in their daily supply, while Tan Xuan and Hoc Mon have claimed 11 percent.