Market Trends of Vietnam Compound Feed Industry
Cereals Dominate as the Largest Feed Ingredient
In the Vietnam compound feed industry cereals play a pivotal role as they consist of various nutritional components such as 21% to 27% of total dietary fiber, 12% to 16% of crude protein, and 18% to 22% of crude fat. Corn, barley, and sorghum are the significant cereal ingredients used in manufacturing compound feed.
Corn leads as the primary feed grain in Vietnam, accounting for 7.9 million metric tons followed by soybean meal at 6 million metric tons, feed wheat at 1.9 million metric tons, and many others, the Food and Agriculture Organization estimated. Along with corn, Vietnam is one of the leading importers of dry cereal flour and DDGS (fermented by-products) from the United States, driven by a resurgence in pork production, growth in beef and poultry sectors, and a booming aquaculture industry. Corn DDGS imports in 2022 reached 1.31 million metric tons, a 6 percent increase from 2021. According to traders and feed millers, feed wheat, barley, rice bran, and broken rice often substitute corn as energy sources in various feed formulations. Corn imports from Pakistan, Myanmar, and South Africa increased from 0.5 million metric tons in 2021 to 1.72 million metric tons in 2022.
Ducks are an important source of animal protein in Vietnam, particularly in the Mekong Delta, where over ten million are reared annually for both egg and meat production. Rice bran and polishings, derived from the country's staple food grain, are the traditional feed supplements for all classes of livestock. Grains make up about 80% of a quail's diet. Typical feeds for quails or game birds include cracked corn, various grains (barley, oats, rye, and wheat), and oat grouts, enhancing nutrient digestibility.
Moreover, in Vietnam, sorghum emerges as a promising alternative to cassava for providing starch in Pangasius feed. Sorghum contains a reasonable amount of protein (10%), higher than cassava. In 2020, the U.S. Grains Council (USGC) executed a sorghum feeding trial on Pangasius catfish at a private research farm in Vietnam. Results indicated that sorghum could replace cassava in Pangasius diets at a 20% inclusion rate, akin to corn's 10% rate, leading to improved body weight, a favorable feed/gain ratio, and reduced mortality.
Along with this, Vietnamese governmental bodies have rolled out initiatives to boost cereal incorporation in animal feed. For instance, in January 2021, Vietnam signed a deal with India, procuring 70,000 metric tons of 100% broken rice to satiate domestic feed production demands. Similarly, in 2021, the Department of Livestock Production launched projects aimed at bolstering the animal feed processing sector from 2021 to 2030. These initiatives focus on leveraging cereals for feed production, advancing corn and soybean seed development, expanding cultivation areas, and integrating cutting-edge production technologies.
Swine Leads as the Largest Growing Animal Type
Swine feed has emerged as the highest-consumed feed across the country due to growing consumer preferences for pork meat. Pork not only serves as a primary protein source for the Vietnamese but also as the main ingredient of many dishes in its gastronomy. The Vietnamese people with 98% of households use pork daily, accounting for more than 70% of the total meat consumption in 2021. According to the General Statistics Office (GSO), the total swine population in Vietnam witnessed a 2.5% increase, reaching 24.7 million heads in 2022, while live-weight production rose by 6.5%, reaching 26.3 million heads by the end of June 2023. According to the Department of Livestock, Vietnam, the total pork production in Vietnam in 2023 was 4.9 million metric tons, an increase of 4% compared to 2022. This factor cause a surge in the demand for different feed ingredients in the country in the coming years.
In Vietnam, numerous small and medium-sized farmers actively engage in swine production. This sector is vital, serving as a primary income source for many rural households and supplying manure for rice and vegetable crops. Consequently, to ensure economic stability, Vietnamese farmers are raising swine, driving up domestic demand. As a result, swine feed has emerged as the dominant segment in the market.
Vietnam has turned to imports of corn as a feed ingredient to support the level of meat production, which increased by nearly 30% in 2021 from the previous year. Small farmers in the country use fresh sweet potato roots and vines, dry cassava chips, rice, rice bran, maize, and various forms of vegetables/grasses as the main sources of pig feed. Such feeds are not commonly used in southern Vietnam. There, pigs are mainly produced on a large scale and fed on commercial feed.
In response to the surging demand for swine feed in the country, companies are ramping up their production capacities and business operations. For instance, in March 2022, Japfa Comfeed Vietnam Co., Ltd inaugurated a 48,000-head fattening swine farm in the Phu Rieng district of Binh Phuoc province. Additionally, the company has expanded six feed production factories, over 1,000 poultry and swine farms, and established a network of more than 40 stores dedicated to selling meat and processed foods across Vietnam. Thus, the escalating demand for pork in the country, the appetite for compound feed from the swine segment is projected to rise during the forecast period.
