DEVELOPMENT PROSPECTS OF VIETNAM ANIMAL FEED MARKET
Although facing many difficulties in 2023 along with the general decline of the economy, the growth prospects of the animal feed industry are expected to change in 2024 with an increase in demand. essential food.
Animal feed market in 2023
With the increasing demand for meat and dairy products, Vietnam’s livestock industry has developed rapidly in recent times. In addition, the need to use quality, nutritious animal feed to ensure productivity is also increasing. However, currently the supply of input materials for Vietnam’s animal feed production industry largely comes from foreign imports. To meet the continuously growing domestic demand for livestock, in 2023 Vietnam imported 5 billion USD of animal feed and 1.26 billion USD of soybeans in main markets such as Brazil, the US, Canada, and Cambodia.
In the same year, animal feed raw material prices in the world tended to cool down, besides transportation costs also recorded a decrease, which is a positive signal for the animal feed market. According to data from the General Department of Customs, by the end of November, the total import volume of animal feed materials (wheat, corn, soybeans, animal feed) was 9.5 billion USD, down 9.5% compared to the same period in 2022. Of which, the main import market is Brazil reaching 2.46 billion USD, an increase of 15.0%; Argentina reached 2.21 billion USD, down 33.3%; The United States reached 1.2 billion USD, an increase of 9.0% over the same period in 2022. In order to reduce the burden on livestock farmers, animal feed businesses have simultaneously announced product price reductions in the early days. October. This was the fifth decrease in 2023.
Challenges that businesses in the animal feed industry face
With the general decline of the economy, the animal feed industry is also more or less affected. The challenges that businesses in the animal feed industry are facing are:
First, the price of energy and input materials is unstable. According to reports from the General Department of Customs, most import prices of animal feed ingredients such as wheat, corn, and soybeans tend to decrease compared to the beginning of this year. However, soybean import prices have tended to increase again in the last two months. This has caused input costs of the animal feed production industry to fluctuate more or less. Therefore, this is the top challenge faced by animal feed enterprises.
Second, economic growth is slow. The general economic downturn causes consumers to tend to tighten their spending, thereby affecting the prices of livestock products. Near the Lunar New Year, the supply on this occasion is very large, however, faced with a situation with fluctuating output prices of livestock products and high input prices of animal feed, livestock farmers have a cautious and reserved mentality. in deciding to invest in restocking, directly affecting animal feed output.
Third, competition between businesses in the same industry. According to statistics from the Department of Livestock, currently, the whole country has 269 complete mixed industrial animal feed production facilities, of which 90 factories are owned by foreign-invested enterprises (FDI), accounting for 51.3% of design capacity and 179 factories are owned by domestic enterprises, accounting for 48.7% of design capacity. This is proof that the advantages in capital and technology of animal feed producers in the region are dominating the market and creating competition between domestic and foreign enterprises.
Development potential of the animal feed market in 2024
Despite the difficult economic situation, with the average income of people remaining stable and increasing slightly, the need to improve meals is still increasing, especially clean food groups specifically with poultry species as well as other products. Products of animal origin such as meat, milk and eggs also increased. This shows that the growth opportunities of the animal feed market in the coming years are extremely open.
Furthermore, the recovery and development of the tourism and hotel industry is expected to continue to promote the growth of Vietnam’s animal feed market in the coming years. Besides, industrialization has reduced the area of grassland, leading to a significant increase in demand for animal feed in recent years. The pig feed industry is expected to be number one in terms of revenue by 2028. In addition, the increasing conversion of livestock farms from small-scale to organized farm-scale livestock The organization will likely continue to support growth opportunities in the animal feed market going forward.
In general, the domestic animal feed industry market is growing rapidly despite fluctuations in product prices. In the meantime, the general decline in the world economy has had a significant impact on the animal feed industry, leading to businesses facing many challenges. In particular, unstable raw material prices, slow economic growth and competition from foreign-invested enterprises in the same industry are difficult problems that Vietnamese businesses encounter. Along with the above context, there are still positive signs about people’s consumption needs and from here it can be seen that the development prospects of the animal feed industry are still open.
Realizing the development potential of the industry as well as aiming to build a professional trade bridge for feed industry businesses both in the region and around the world. Livestock Vietnam organizers will return in 2024 with a series of attractive programs, promising to be a reliable destination for your businesses. See more information about the exhibition at: https://livestock-vietnam.com/