Corn and wheat prices have been increasing continuously, with an average increase of 30-35%, causing animal feed prices to increase sharply. The Ministry of Finance has proposed to reduce import tax on corn and wheat.

As production is recovering in many countries, the demand for imported raw materials for animal feed and aquaculture has recently increased to a record level. Meanwhile, drought in some countries is also affecting the production output of these items, leading to increased prices.

According to the Ministry of Finance, since October 2020, the prices of key raw materials such as corn and wheat have been increasing continuously with an average increase of 30-35%. The increase in raw material prices is mainly due to the Covid-19 pandemic affecting global logistics, leading to a sharp increase in freight rates for many types of goods.

Vietnam is heavily dependent on imported raw materials for animal feed. Each year, the domestic agricultural sector can only supply 4 million tons of bran and 4 million tons of cassava while the demand is up to 27 million tons of all kinds. Therefore, Vietnam imports about 70 - 80% of raw materials for animal feed, especially items such as corn, wheat, and soybeans.

Proposal to reduce import tax on corn and wheat to reduce animal feed prices

Currently, about 45-50% of large poultry farms have suspended their cages and about 70-75% of farms and households have temporarily stopped restocking due to high animal feed prices. If this situation continues, it will lead to a shortage of domestic supply of poultry products.

The Ministry of Finance has submitted to the Government for consideration to adjust and reduce the preferential import tax rate of MFN for wheat and corn. To contribute to reducing domestic production input costs for the animal feed industry.

For wheat, the Ministry of Finance has proposed to reduce the import tax rate to 0%. As for corn, the Ministry of Finance proposed to reduce the import tax rate to 3% (previously 5%).

Reducing import tax on corn and wheat will not have a big impact on the domestic agricultural sector. The reason is that Vietnam has not been able to grow wheat and domestically grown corn is basically only for human consumption.

According to CafeF.vn