Agricultural processor Bunge Ltd has begun production at its US$100 million soybean crushing plant in southern Vietnam, which would help reduce risk and costs for local feed importers, the company and traders said on Monday.
Production began on May 8 at the plant, which is designed to crush 1 million tons of soybean a year or more than 3,000 tons daily to turn out 600 tons of crude-degummed soybean oil and 2,500 tons of soymeal, Bunge said in a statement.
The plant's products will be sold in Vietnam and exported to Asian countries, Bunge said, adding that it has been the top supplier of imported feed ingredients to Vietnam's market since 2002.
"The plant will reduce the financial pressure with exchange rate for Vietnamese buyers, cut the ratio of cargo loss during transportation while the quality of the freshly produced soymeal is higher at delivery," a soymeal trader in Ho Chi Minh City said.
Purchases made in the Vietnamese dong will help reduce the risk of exchange rate fluctuation, which happened in the latest case in February this year when Vietnam devalued its domestic currency by 8.5 percent against the dollar.
Construction of Bunge Vietnam plant started in December 2009 in Ba Ria-Vung Tau province, 70 km (43 miles) southeast of Ho Chi Minh City, Vietnam's commercial centre.
The trader said supply from Bunge Vietnam would also help save time for importers, instead of waiting for a longer shipment time from India or South American nations such as Argentina.
Vietnam spent $1.18 billion to import feed and ingredients for feed production, such as soybean, soymeal, corn and wheat meal, in the first six months of this year, 1 percent up from the same period in 2010, the Agriculture Ministry said.
India, Argentina, the United States, Thailand and China top the list of feed and feed ingredient exporters to Vietnam so far this year.
India exports around 300,000 tons of corn and 700,000-800,000 tons of soymeal each year to Vietnam, traders said.
Vietnam is forecast to import between 8.5 million and 9 million tons of feed and raw material for feed production this year, up at least 10.4 percent from 7.7 million tons imported in 2010, an industry official said in March.
The import, mainly of soybean, soymeal, corn and wheat, was to ensure the feed industry reaches an annual target output of 12 million tons of feed for livestock and poultry and another 2.5 million tons of feed for fish, he said.