Source: congthuong.vn
Import sources are mainly from American countries, so shipping times are long and shipping costs are high. Due to 65 – 70% dependence on foreign raw materials, production costs and selling prices are highanimal feed (TACN) in the country is vulnerable.
Many experts believe that it is time for Vietnam to have a systematic and fundamental strategy to develop domestic food raw materials. One of the important solutions is to develop crops using biotechnology as animal feed materials with high productivity and output to supplement domestic supply and reduce imports. Meanwhile, corn is the item with the highest proportion in the group of imported agricultural raw materials of Vietnam. Therefore, introducing genetically modified corn varieties (GMO) with high yield and better resistance, and expanding corn cultivation areas will be basic solutions to increase corn production in the future. water.
The price of “domestic corn” is twice as high as “foreign corn”
According to the Ministry of Agriculture and Rural Development (MARD), in 2023, our country imported 9.76 million tons of corn, an increase of 1.6% compared to the previous year. In terms of value, this item accounted for 57.7% of total imports of animal feed and raw materials to Vietnam last year.
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| Vietnam imports corn every year |
Brazil and Argentina are the two main corn supply markets for our country, accounting for 76.6% of total corn imports. These are also countries with strengths in applying GMO corn varieties with top quality in the world. Besides, thanks to the advantage of large production scale, these South American countries have continuously expanded their harvest over the years. Abundant supply has boosted grain exports, while helping agricultural product prices from South America become more competitive in the international market.
Meanwhile, Vietnam’s pig farming industry is also among the top in the world but is greatly affected by fluctuations in animal feed prices because animal feed factories are dependent on imported sources. Our country’s animal feed raw material areas are still fragmented and small, unable to meet the needs of businesses. According to data from the US Department of Agriculture (USDA), Vietnam’s average corn yield in the last 5 crop years only reached 4.9 tons/ha, significantly lower than the 7.3 tons/ha yield of Vietnam. Argentina or Brazil’s level of 5.4 tons/ha. In addition, income from corn is lower than other agricultural products, so Vietnamese farmers are not interested in growing corn, causing the cultivated area to continuously decrease over the years.
This leads to the fact that Vietnamese livestock enterprises have to purchase and take advantage of cheap, high-quality imported supplies, instead of choosing “home” corn whose cost is nearly twice as high.
China has found a way to reduce dependence on imported raw materials
Self-reliance on raw material supply is not a problem unique to Vietnam, but is also a development goal of major importing countries in the context of agricultural markets continuously being affected by geopolitical tensions and disruptions. trade flows and erratic weather in recent years.
A typical example can be mentioned China, this country of billions of people has successfully applied policies to promote grain production, helping to ensure domestic food security. In terms of corn alone, in 2023, the country recorded a record harvest with a 4% increase in output compared to 2022. To achieve the above goal, a new pillar in China’s strategy is to accelerate industry upgrading. seed industry, aiming to improve crop productivity. At the same time, a series of synchronized measures such as increasing agricultural support subsidies, protecting production against adverse weather… were also implemented to encourage farmers to grow more grain.
Last year, for the first time, China approved the planting of genetically modified corn for the 2023 crop. Although it is estimated that the area of genetically modified corn will only account for less than 1% of the total corn planted area, this breakthrough of China is considered to be appropriately flexible in the context of prolonged geopolitical conflicts and the risk of goods transportation disruption. At the same time, China also chose this as an option to ensure national food security, avoiding dependence on raw materials imported from abroad.
In our country, at the end of 2023, the government has just approved a project with the goal of further strengthening domestic animal feed production capacity, reducing the proportion of imported animal feed ingredients. However, in reality we still face some short-term challenges. In particular, the seed stage is still the most worrying thing when Vietnam has not been proactive in seed sources, especially high-yield and high-quality varieties. Corn seeds also depend significantly on foreign supplies, so they often have high prices. Meanwhile, Vietnamese farmers are still somewhat afraid of the harmful effects of genetically modified corn, so they have not promoted the cultivation of this corn variety.
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| Cultivated area and corn output in Vietnam |
On the other hand, current farming techniques have generally made progress, but investment efficiency is still low and production is not synchronized. Corn growing is only small-scale, especially in mountainous areas, and mechanization still faces many difficulties. In addition, there is almost no support in terms of seeds, science and technology to expand corn growing area.
What solution for Vietnamese businesses?
Experiencing a cycle of “super price increases” of goods after the Covid-19 pandemic, crop failures in major producing countries and political tensions between Russia and Ukraine, and recently conflicts in Gaza and the Red Sea, have caused supply chains to become unstable. At risk of disruption, our country’s livestock industry is increasingly revealing its weaknesses due to its heavy dependence on imported raw materials. Therefore, in 2024, measures to manage raw material supply risks will be even more of a priority for businesses.
Currently, some businesses are also considering optimally balancing the mixing ratio, as well as using alternative agricultural products such as cassava, broken rice,… as a short-term solution to help reduce the proportion of import input materials. Along with that, diversifying the list of suppliers, shifting purchases from closer countries such as India, Laos and Thailand, will also limit the effects of disruptions in transportation activities. internationally, especially in the past year.
MXV believes that in the current context, livestock enterprises need to especially closely monitor raw material price developments on the world market, taking advantage of risk insurance (Hedging) operations to identify the risk of price increases to have timely strategies and reduce negative impacts from external objective factors.
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| Corn price developments over the past 3 years |
In the long term, our country needs to have a comprehensive and methodical strategy to sustainably develop animal feed raw material areas, notably building a corn value chain. And the most important thing is that it is necessary to have close cooperation and drastic participation of the entire chain from authorities, businesses, organizations, scientists and producers.
Lessons from China on applying GMO corn cultivation are also good suggestions for Vietnam in increasing production and minimizing the continuously increasing corn trade deficit in recent years. At the same time, this is a good solution to help Vietnamese corn compete with South American corn in both price and quality.
