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A Tight Spot: Vietnamese Poultry Feels the Squeeze

by 5m Editor
3 June 2008, at 8:49am

VIETNAM - As long as feed prices in Vietnam continue to skyrocket, losses for poultry producers will keep piling up. Now, producers are wondering where to turn next.

Last week the cost of a 25kg bag increased by up to VND7,500 - depending on qualify and brand - to around VND160,000 (US$10). This was the second increase in May alone.

In the year to date, the price has gone up five times by a total of at least VND15,000 per bag.

Phuong Nguyen, a poultry farmer in Long Khanh District, Dong Nai Province, said she has lost VND200mil this year, adding that most farms made similar losses.

If prices continue to rise, most of the farms would have to close down, she said.

Thanh, a chicken farmer in Vinh Cuu District, Dong Nai, said the hikes in feed prices has pushed up to the cost of producing 1kg of chicken to VND24,000-25,000. With market prices at VND23,000-26,000 per kilogram, losses are inevitable, he said.

With many loss-stricken farmers defaulting on payments, animal feed distributors too are in trouble, a distributor in Dong Nai said.

Producers blame the price hike on high interest rates and costs, especially of imported additives.

An expert said that Vietnam was an agriculture country, most of the raw materials used in animal feed production, like rice bran, corn, soy-bean, powdered fish, are imported.

Le Ba Lich, chairman of the Animal Feed Association, said 34 per cent of the materials used were imported.

Since last year, when many countries began to focus on making ethanol from corn, corn prices have been rising relentlessly.

The Government has waived import tariffs in a vain effort to keep animal feed prices low.

Analysts say the industry must develop local sources for raw materials to avoid price shocks.

Nguyen Thanh Son deputy head of the Breeding Department, said his agency plans to petition the Ministry of Agriculture and Rural Development to consider imposing import taxes on chicken and limit the import of chicken wings. It has also urged the Government to support poultry breeding farms, he said.

5m Editor