March 3, 2009

Continually increasing feed prices are waning off shrimp and catfish production in Mekong Delta, according to industry officials.

Despite a recent 14-percent drop, feed prices are still exorbitantly high, forcing a large number of catfish and shrimp farmers to leave their ponds, they added.

Fish breeder Nguyen Minh Nhi, also a former deputy chairman of An Giang Province, said that up to 50 percent of farmers had ceased working and were still hesitating to resume production.

In the past few years, feed prices had risen along with the price of seafood products.

However, the anti-dumping trade penalties hurled against Vietnam has shrunk the country''s seafood export market and feed suppliers did not reduce their prices despite fish breeders'' huge profit losses.

Experts estimate that feed and medicine accounts for up to 90 percent of shrimp farming expenses, which results in little or no profit for farmers.

Phan Van Danh, chairman of An Giang Province''s Fishery Association, said feed prices for catfish at VND17,000 (US$1) a kilo leads to a loss of VND1,000 per kilo of fish.

Recently, a substantial fall in prices of raw materials has led to pressure on feed producers, who still have a large stock of materials that had been purchased at high prices.

For example, the price of dried soy at the end of last year dropped by 30 percent and corn by 45 percent on the world market.

The feed industry''s association projects that total amount of raw materials in stock are more than 200,000 tonnes.

Approximately 40 feed suppliers nationwide are on the edge of closing down or posting great losses, the association adds.

Le Ba Lich, chairman of the feed industry''s association, said the volatile foreign currency exchange had been a major obstacle to suppliers'' ability to reduce feed prices.

He explained that feed producers had to pay for a transaction fee of US$0.12 for each dollar they exchanged at banks to pay for their imported raw materials.

The industry had imported US$1.5 billion worth of raw materials from the onset of 2009 which led to higher feed prices, he said.

Duong Nghia Quoc, chairman of Dong Thap''s Association of Fisheries called on the government to reduce value-added taxes on feed to ease farmers'' expenses.