Losses for Vietnamese feed producers

Feed producers, especially raw material traders,
imported large volumes of soybean-bean based oil cake from July to September at
the high price of US$550 per tonne. Mass purchases were made under the fear that
prices would keep increasing. However, the price fell to $360 per tonne in
October, and now hovers between $280 and $300 per tonne.

Feed producers
cannot recoup their investment in the raw materials, and the stock-piled oil
cake is estimated to be worth about $16 million and has a volume of between
20,000-30,000 tonnes, according to the Vietnam Animal Feed Association. Around
40 animal feed producers have stopped production and about 20-30 per cent have
reduced production to avoid losses caused by decreasing prices of raw material
in international markets, said Le Ba Lich, chairman of the association. Other
producers are accepting losses to retain their consumers.

Oil-cake made
from soybeans is not the only raw material to see prices decline. The price of
corn has been cut almost by half from $305 to $164 per tonne. Fish meal has also
decreased from $1,100 to $764 per tonne. It takes about one to two months for
animal feed to be shipped to Viet Nam, because it is imported from the US, India
and Peru. So, the feed was imported at the high prices of this summer, and the
importers face loss, Lich said. This is a recurring problem, because most
companies focus solely on export prices and do not pay enough attention to
import prices, Lich said.