Vietnam Needs More Pork

02:04PM Nov 20, 2019
Vietnam marketplace
( Judith Scharnowski from Pixabay )

Vietnam is expected to fall short of nearly 200,000 tons of pork in the fourth quarter of the year due to African swine fever (ASF), reports the country’s Ministry of Agriculture and Rural Development.

As of mid-November, nearly 5.9 million of pigs have been culled or some 337,000 tons of pork, reports Xinhuanet. This makes up 8.8% of the total pig weight nationwide.

According to agricultural deputy Minister Phung Duc Tien, the average price of live hog in the country has risen to 60,000 - 67,000 Vietnamese dong (VND) ($2.60 - $2.90 in U.S. currency) per kilogram, and up to 80,000 VND ($3.50) in some areas.

During a meeting on price stabilization amid rising pork prices on Monday, Vietnamese Deputy Prime Minister Vuong Dinh Hue asked relevant agencies to calculate the supply shortage and consider importing pork to meet domestic demand while controlling the price hike and curbing inflation, Xinhua reports.

Vietnam’s consumer price index is likely to rise 0.8-1.0% in November, mainly driven by higher pork prices, which have increased nearly 19% this year.

In Rabobank’s fourth quarter report, analysts said they expect Vietnam’s pork production to decline by 0.55 million metric tons cwt (-20% YOY) this year. 

“Re-herding efforts by household farms in northern Vietnam to increase supplies for the Tết holiday suffered some setbacks with the re-emergence of ASF in areas previously declared free of outbreaks for more than 30 days,” says Christine McCracken, Rabobank senior analyst – animal protein. 

Pork consumption is also projected to decline to 2.47 million metric tons cwt this year (-15% YOY), due to supply shortages during the high demand period (Q4 2019), she says. 

“As a result, we have seen prices hit record highs, and we have noted some substitution of other, cheaper proteins,” McCracken adds.

Although live hog prices have rebounded strongly since June, a small gap remains between northern and southern Vietnam. For example, average hog prices in the second week of October had risen to VND 59,000 to VND 62,000/kg live weight in northern Vietnam and to VND 45,000 to VND 55,000/kg live weight in southern Vietnam from the August average of VND 47,000 and VND 35,000, respectively.

“Prices in northern Vietnam recovered more quickly, reflecting the impact from earlier ASF outbreaks and, to some extent, a trickle of product to China,” McCracken says. “While the substitution of chicken may have seen some uptick, prices in early October have nevertheless dropped significantly for both colored birds (to VND 25,000/kg live weight) and broilers (to VND 18,000/kg live weight) – both below production cost – signaling over-production and speculative imports.”

McCracken expects pork imports to pick up in the fourth quarter, ahead of peak seasonal demand during the Lunar New Year. Vietnam’s pork imports in the first half of 2019 have primarily originated from the European Union (67%), and the U.S. accounted for 8% of total imports. 

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