VIETNAM ANIMAL FEED MARKET

Vietnam Animal Feed Market is estimated to grow at steady growth rate in the coming years owing to the growing demand for meat products, the increasing consumer incomes, the rising requirement for animal feed, and the government initiatives to expand the animal feed industry.

Major Vietnam Animal Feed Market Drivers and Challenges

Vietnam’s evolving dietary patterns coupled with strong inclinations towards food with high protein results in increased demand for dairy and meat products which has led to substantial increase in the animal feed demand in the country. With the population forecasted to reach 107 million by 2030 along with the rising income among the consumers, it is likely to drive up the demand for high-quality protein from animals which requires high-grade animal feed. Consequently, producers are innovating with premium and advanced feed products to meet the increasing demands of consumers, as there is also a significant focus on developing eco-friendly and high-tech feed products.

The annual requirement for feed in the fisheries and animal husbandry industries ranges from 32 to 33 million tons, which the rising demand for aquafeed, swine feed, and poultry feed is a key driver of revenue growth in Vietnam animal feed market. In addition, the animal feed industry is witnessing a strong rise in the demand for natural feed products as there is a growing recognition among people about the benefits associated with organic foods. To meet the increasing consumer demands, producers are directing their attention towards the production of organic feed products for animals.

The other factor contributing to the growth of Vietnam animal feed market size is the government initiatives to foster the development of the animal feed industry through the introduction of various initiatives and laws to strengthen the country’s animal feed production. This involves developing environmentally sustainable animal feed products with a long lifespan, alongside enforcing strict guidelines regarding antibiotics and the use of other harmful ingredients. For instance, the Ministry of Agriculture and Rural Development has employed regulations to oversee the manufacturing of animal feed products in Vietnam. In addition, the Vietnam Competition Authority has set forth regulations to encourage competition in the industry and to prevent unfair trade practices. Meanwhile, the Ministry of Finance has launched a tax incentive scheme to promote investments in the manufacturing and distribution of feed products, which involves lowering taxes on profits generated from selling animal feed items and ingredients.

However, the Vietnam animal feed market is facing challenges including the increasing feed costs and scarcity of raw materials which are expected to impact this industry growth. The country anticipates a challenging period for the livestock industry due to its heavy reliance on imported animal feed from Ukraine and Russia. The conflict initiated by both countries has led to significant price increases with corn prices having risen by 50% and wheat prices soaring by 62%. Meanwhile, according to findings from Yuanta Securities Vietnam Quanta, the local animal feed price has climbed about 30% from early 2021. The company also predicts that the animal feed price may decrease as logistics and supply chain improvements are expected to enhance the products circulation, despite the domestic animal feed manufacturers may find it challenging to address the rising costs of raw materials.

Ministry of Industry and Trade has projected that the domestic livestock industry will face numerous challenges due to the ongoing effect of the pandemic as the disruptions in the supply chain globally will persist. Animal feed sector in Vietnam depends on imported raw materials for 90 percent of its needs. Ukraine and Russia collectively contribute approximately 29% of global wheat exports and 19 percent of maize exports, while also being the primary suppliers of the market in Vietnam.

Furthermore, recently there are 265 animal feed factories with 85 of them being foreign direct investment that collectively control 65% of market share, meanwhile local enterprises are facing challenges due to a shortage of raw material. Vietnam’s domestic agricultural production is capable of supplying up to 4.5 to 5 million tons of maize and 4 million tons of bran annually while the total annual demand for these commodities, notably corn and wheat, is estimated at around 26 to 27 million tons each.

Segments covered in the Report:

The Vietnam Animal Feed Market has been segmented on the basis of type and product. Based on the type, the market is segmented into poultry, swine, ruminant, aquaculture and others. Based on the product, the market is segmented into pellets, mash, crumbles.

Market Segmentation

Vietnam Animal Feed Market by Type

• • Poultry
  • Swine
  • Ruminant
  • Aquaculture
  • Others

Vietnam Animal Feed Market by Product

• • Pellets
  • Mash
  • Crumbles