Vietnam aquatic feed market is expected to grow at a compound annual growth rate of 4.99% over the forecast period to reach a market size of US$2,215.482 million in 2027, from US$1,575.559 million in 2020.
Aquafeed is a type of aquaculture feed that can be used to feed aquatic species, as the name implies. Aquafeed typically contains vital vitamins and minerals, which serve to meet the dietary needs of various aquatic species, improving their health and productivity. According to Food and agricultural organization, after China, Indonesia, and India, Vietnam is currently the fourth-largest aquaculture producer of seafood. Furthermore, changes in consumer diet habits, combined with rising earnings, have increased seafood consumption in the country, positively impacting the aquafeed business. Shrimps, pangasius, tuna, and marine fish are some of the most popular seafood products in Vietnam. Increased exports, strong government backing, developments in feed manufacturing technology, rising knowledge about the adoption of modern feeding techniques, and so on are some of the key factors boosting the market. Existing manufacturers in the country have extended their production capacity due to the rising demand, and several new players have just entered the market.
Market Trend
Vietnam shipped seafood to 154 markets in the first nine months of 2020, according to the Vietnam Association of Seafood Exporters and Producers. Nearly 80% of the export turnover was accounted for by the key markets, including Japan, the United States, China, the EU, South Korea, and the ASEAN region. As a result of the increased demand for aquafeed from the seafood industry, the aquafeed market in the country is predicted to grow dramatically. As a result, higher consumer expenditure on seafood is predicted to increase demand for premium fish, boosting the feed market's growth in the future years. The rising cost of feed ingredients and raw materials, on the other hand, is one of the primary limitations of this industry.
Growth Factors
The development of high-yield aquafeed is directly impacted by the increased demand for aquaculture products. Commercially manufactured aquafeed is used in intensive aquaculture, although farm-made feed is used by most inland farmers in the country. As an ASEAN member, Vietnam is a party to several bilateral and free trade agreements, which have resulted in a significant increase in demand for Vietnamese aquaculture goods in major economies such as the United States, North America, China, and India. Imports of pangasius fish from Central and Eastern European countries are also on the rise. The Netherlands and Germany imported a considerable amount of pangasius fish, which was exported to Central and Eastern European countries with small import ports. Exports of aquaculture goods to the EU are likely to rise shortly, thanks to tax benefits provided by the EU-Vietnam Free Trade Agreement (EVFTA). During the projection period, this is likely to increase aquaculture feed consumption in the country significantly.
Vietnam is one of the world's major aquaculture countries and the world's second-largest shrimp exporter. Shrimp farming has been more popular in the country in recent years, owing to increased worldwide seafood demand. Skretting Vietnam constructed a new aquaculture feed mill in the Mekong Delta in 2017 to support the country's rapidly expanding shrimp farming business. A particular system for producing Skretting's unique functional health feed for shrimp, Lorica, is also housed at the new facility. Shrimp aquaculture has faced difficulties as the environment has become more contaminated. For food safety assurance, the Ministry of Agriculture and Rural Development approved a semi-intensive shrimp farming project in 2018. Shrimp farming is predicted to increase at a fantastic rate in the country due to rising investments and sustainable farming practices, boosting shrimp feed demand in the coming years.
Restraint
In Vietnam, where aquaculture is primarily based on intensive, semi-intensive, and traditional feeding systems, aquafeed is a key concern for small-scale farmers. The majority of inland farming relies on aquafeed produced on the farm. Because feed materials like fish meal are expensive, inland farmers augment their feed with crop leftovers, fish trash, and cornmeal, lowering overall aquaculture productivity and increasing water usage and pollution.
Impact of COVID-19 Pandemic:
To contain the COVID-19 pandemic, the Vietnamese government implemented several measures, including social isolation, mobility restrictions, and the closure of non-essential service institutions. The main impact of the containment restrictions was on fish and other seafood exports, which influenced the country's aquaculture feed requirements. However, thanks to the government's early actions, the aquaculture feed market in Vietnam has experienced a moderate impact.
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