Official sources also report that the Ministry has petitioned to exempt the import duty on some raw materials for animal feed processing, including buckwheat, grease and fish oil.

The import tax on dried beans will fall from 10 to 5 per cent.

The move aims to open the door for finished animal feeds to be imported into the domestic market, forcing local feed producers to reduce prices.

The same kind of animal feed in Viet Nam costs more than that in other countries in the region, causing many financial difficulties for local breeders.

Import reliance

Although Viet Nam is an agriculture-based country, most of the raw materials used in animal feed production like maize, corn, soybeans and powdered fish are imported.

Le Ba Lich, chairman of the Viet Nam Feed Association (VFA), said the country currently had 300,000 hectares under soybean plantation, with output of only 1.2 to 1.4 tonnes per hectare. The amount is just enough for making tofu and soya milk.

Each year, the country has to import 2.0 to 2.5 million tonnes of soybean meal, 500,000 to one million tonnes of maize and a large amount of cassava and other ingredients, according to Mr Lich.

The VFA has forecasted that animal feed prices will go up this month due to the increase in price of raw materials in the world market.

Viet Nam, however, still has to import 70 per cent of the total materials it needs.

The soybean meal import price, for instance, was reportedly US$430 per tonne against $280 per tonne last November.

Meanwhile, both the import and domestic maize prices have also been rising.

Domestic maize has seen the price rise from VND 3,400 to VND 4,200 per kilo, while imports have increased to $210 per tonne, increasing between 10 to 15 per cent in comparison with October last year.

Analysts say the industry must develop local sources for raw materials to reduce imports and avoid price shocks.