The price of imported feed ingredients has increased sharply

From the beginning of 2022, the price of animal feed has continuously increased sharply and set a record in the group of products with the most price increase.
According to the Department of Livestock Production, the price of animal feed ingredients has increased continuously from October 2020 until now due to the impact of the Covid-19 epidemic and recently added the cause of the Russia-Ukraine conflict, limiting supply.
Enterprises said that the reason for the increase in prices was that imported raw materials for feed production continued to rise due to adverse weather from the world's main growing areas in South America. At the same time, tensions between Russia and Ukraine (the world's largest and fourth-largest wheat exporter) also have a great impact on the market price of corn and wheat.

The group of cereals with the strongest increase (comparing March 2022 with March 2021): corn kernels 10,200 VND/kg (up 29.3%), soybean meal 16,500 VND/kg (up 33.4%), cornmeal (corn) 10,300 VND/kg (up 23.1%), wheat 9,850 VND/kg (up 49.5%). It is forecasted that raw material prices will remain and increase until the end of 2022.
Animal feed factories are facing pressure when the time to close the price of future contracts is approaching, but world prices of animal feed and output products such as pork and chicken prices are still high. There are no positive signs.
To reduce the price of this item, the Vietnamese Government decided to reduce import tax on some materials such as wheat from 3% to 0%, and corn from 5% to 2% at the end of 2021 to support farmers. However, while farmers have never been discounted by enterprises, feed prices continue to escalate from the beginning of 2022.