India’s decision to ban the export of de-oiled rice bran (DORB) in July 2023 marked a watershed moment for Vietnam’s animal feed industry. As the ban—now extended until September 30, 2025—continues, it has triggered immediate supply shocks, forced strategic realignments, and is set to reshape the future of feed ingredient sourcing in Vietnam.
Significant Pre-Ban Reliance
Before the ban, Vietnam was India’s largest DORB customer, accounting for over half of India’s total DORB exports in early 2023. In the first five months of 2023 alone, Vietnam imported 155,900 tons of Indian DORB, representing a staggering 54% of India’s total DORB exports. This heavy reliance made Vietnam particularly vulnerable to any disruption in Indian supply.
Immediate Supply Shock and Market Disruption
The ban, imposed with immediate effect in July 2023, abruptly severed Vietnam’s main supply of DORB, causing instant shortages and significant disruption in the Vietnamese feed sector. Feed manufacturers, already grappling with high input costs, animal disease threats, and volatile market conditions, saw their challenges multiply. The expected relief from falling global commodity prices was negated by the sudden loss of a key, affordable ingredient.
Rapid Substitution and Search for Alternatives
Vietnamese feed producers responded swiftly, reformulating rations to incorporate other ingredients such as wheat bran, soybean meal, maize, and distillers dried grains with solubles (DDGS). However, these alternatives often came at a higher cost or with different nutritional profiles, complicating feed formulation and raising overall production expenses.
Pakistan quickly emerged as a new source of DORB for Vietnam, underscoring the industry’s preference to maintain DORB in feed rations if possible. Yet, the price of Pakistani DORB ($205–210/tonne CFR) was notably higher than pre-ban Indian DORB ($160–220/tonne), and still considerably less competitive than soybean meal ($330–370/tonne). The net result was a marked increase in feed formulation costs for Vietnamese producers.
Long-Term Strategic Shifts and Supplier Reliability Concerns
The ongoing ban has catalyzed a fundamental shift in Vietnam’s sourcing strategy. Rather than wait for Indian exports to resume, Vietnamese feed companies have diversified their supplier base and adjusted feed formulations to be less dependent on a single country. This diversification is likely to persist, even if Indian DORB becomes available again, as the ban and its repeated extensions have damaged perceptions of India’s reliability as a supplier.
Current Market Scenario
Today, Vietnam’s feed industry relies on a mix of alternative DORB sources (notably Pakistan) and substitute ingredients. Meanwhile, the ban has depressed Indian domestic DORB prices, with rates dropping from ₹18,000/tonne in July 2023 to around ₹12,500/tonne by early 2024 and to ₹7,500/tonne in March 2025 , reflecting oversupply in the absence of export markets.
The Vietnamese feed sector, already experiencing rapid industrialization and consolidation, continues to grow, but remains highly dependent on imports for a majority of its raw materials. The shift away from Indian DORB has increased input costs, but also fostered greater supply chain resilience.
Upcoming Market Dynamics: Post-September 2025
When the ban is eventually lifted (currently scheduled for September 30, 2025), Vietnam’s decision to resume Indian DORB imports will hinge on several factors:
Price Competitiveness: With Indian DORB prices currently depressed domestically ($100–150/tonne equivalent), Indian exports could be highly competitive if the ban lifts. However, actual export prices upon market reopening remain uncertain, as pent-up demand and logistical bottlenecks may drive prices higher.
Supplier Reliability: Vietnamese importers are likely to remain cautious, given India’s unpredictable policy environment. Rather than reverting to pre-ban dependency, they may seek better contractual terms, maintain a diversified supplier base, and initially import smaller volumes to hedge against future disruptions.
Permanent Formulation Changes: The industry’s experience with alternative ingredients and suppliers may lead to lasting changes in feed formulations, further reducing reliance on Indian DORB.
A Shift Toward Resilience
Ultimately, the Indian DORB export ban has accelerated Vietnam’s transition toward a more resilient, diversified, and risk-mitigated feed supply chain. While Indian DORB may regain some market share if exports resume and prices are attractive, a full return to pre-ban levels of reliance appears unlikely in the near future.
Vietnam’s feed industry now balances cost considerations with the imperative for supply chain stability—an enduring legacy of the disruption caused by India’s policy shift.
Key Takeaways:
Vietnam was heavily reliant on Indian DORB before July 2023, importing over half of India’s exports.
India’s abrupt export ban caused immediate shortages and forced Vietnam to seek alternative suppliers and ingredients.
Feed costs in Vietnam increased as alternatives were more expensive than Indian DORB.
Pakistan became a major new supplier, but at higher prices.
The ban’s repeated extensions have damaged India’s reputation as a reliable supplier.
Vietnam is unlikely to return to full dependency on Indian DORB, even if the ban is lifted, due to the strategic shift toward diversification and resilience.
The DORB export ban has not only reshaped Vietnam’s feed industry but also serves as a case study in the risks of over-reliance on a single supplier in global agricultural supply chains.
Gives a overall gist of how over dependency on exports from Indian angle and imports from Vietnam side has ruined the decades long comfortably set businesses...
ReplyDeletethis is classic case example of not keeping all your eggs in a single basket.
Also keeping in mind the present scenario of trade war and the impacted foreign trade across the world, it is advisable for all businesses to try to develop domestically rather than praying for stable international policies.
Exactly, This is a perfect case study to understand various aspects!
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