VIET NAM - Ron Lane, Senior Consultant for Genesus, provides an outlook of the Vietnamese hog market during 2012.
Vietnam Hog Markets Summary for 2012
- During 2011, the price for market pigs returned favorable profits. Farmers were excited about entering 2012 with confidence for continued profits. However, led by companies with foreign capital, there was a continued increase in the herd size that created plentiful supply for the market. The first three months of 2012, the price of pork was quite stable with an average rate of 50,000 VND/kg ($2.40 USD/kg) for a market pig. These prices created good positive returns.
- Entering the second quarter of 2012, the media agencies reported that some farms used banned growth hormones (eg Clenbuterol) in pig production that caused consumers to have concerns about the safety of pork. They turned to alternative protein sources such as seafood. The pig industry was in disarray as pork consumption dropped. This, in turn, caused pork prices to drop below the break-even price for most farmers. This was the pattern until the end of the year.
- Although a large amount of pork was sold to China by various traders, and this should have stabilized the domestic pork prices, it did neither increase the market pig price nor the local pork prices in Vietnam. By mid-December 2012, the price of pork in the Southern region was at 43,000 VND/kg ($ 2.07 USD/kg) and in the northern area of the country, an average price of ??50,000 VND/kg ($2.40 USD/kg).
- In general, the pig industry in 2012, especially the last 6 months, was quite gloomy and there were low returns or large losses to the farmers. Furthermore, the rise in grain and ingredient prices; the increased costs of most inputs; lower purchasing power; lack of credit, capital and high interest rates along with the loss situation caused by diseases (mainly Foot and Mouth and PRRS) added to the losses and this forced many farmers to reduce or suspend their operation in order to limit losses. (Recently, the estimated loss per month for pig producers was $95.7 million USD/month).
- According to the General Statistics Office and looking at the total preliminary results of the animal investigation program on January 10th, there were 2.63 million buffaloes (96.89 per cent compared to the same period last year); 5.2 million cattle( 95.5 per cent of last year); 26.48 million pigs (97.9 per cent of last year) and 308.3 million birds (95.6 per cent compared to the same period last year). The dairy herd showed the most improvement and development trend reaching 167 thousand head (an increase of 17 per cent compared to last year).
- Meat output in 2012 reached 4.27 million tons, up 2.45 per cent compared to the same period last year. Buffalo meat production slightly increased by 0.77 per cent; beef output slightly increased by 2.37 per cent; poultry supply increased by 4.8 per cent and pork production rose by 1.97 per cent. Overall meat production in 2012 increased-mainly during the first 6 months of the year.
- As mentioned before, there were 26.48 million pigs on the farms of which there were 4.03 million sows. This represents a herd reduction of 0.53 per cent compared to the same period last year.
- The General Statistics Office has released the consumer price index (CPI) for December, 2012. December increased by 0.27 per cent from the previous month and up 6.81 per cent from December, 2011. Thus, this year's inflation has been contained below 7 per cent -target set by the National Assembly. Food groups increased slightly (up 0.24 per cent) overall from the previous month-pork was up 0.51 per cent, poultry up 2.84 per cent, processed meat up 0.13 per cent, eggs up 1.54 per cent, fresh seafood up 0.53 per cent and vegetables down 2.93 per cent.
What to look for over the next few months
- Recently, the Ministry of Agriculture and Rural Development (MARD) announced a compensation program to pay farmers for losses caused by natural disasters and animal diseases. Currently, MARD is offering farmers about 72,800VND/market pig ($3.50USD/market pig). The government will spend about 36 USD million on this scheme.
- A steady supply of live market pigs has been moving into the southern region of China (about 300 to 400 tonnes of pigs/day). The price in China is about 55,000VND/kg ($2.64USD/kg) as compared to the local markets ranging from 43,000 VND/kg ($2.07 USD/kg) to 50,000VND ($ 2.40USD/kg).
- The Country plans to increase agriculture production by 2.8 to 3.0 per cent in 2013. Meat production is targeted at 2.5 per cent growth for a total of 4.3 million tonnes.
- With the approaching Tet Holiday in early February, 2013, the market pig prices have improved since the beginning of December. During the first half of December, pig producers saw an increase in live market price of 30 per cent to 40,000 VND/kg ($1.92USD/kg). This price could remain flat or increases can occur during January as traders/retailers prepare for a high demand during the Festival. Currently, at a price of 40,000 VND/kg ($1.92USD/kg) means that most farmers will break-even or even make small profits.
|Genesus Global Market Report
Prices for the week of January 21, 2013
(Liveweight a lb)
|USA (Iowa-Minnesota)||84.14 USD/lb carcass||62.26¢|
|Canada (Ontario)||1.58 CAD/kg carcass||57.06¢|
|Mexico (DF)||22 MXN/kg liveweight||78.31¢|
|Brazil (South Region)||3.30 BRL/kg liveweight||75.30¢|
|Russia||70 RUB/kg liveweight||$1.03|
|China||17.59 RMB/kg liveweight||$1.28|
|Spain||1.303 EUR/kg liveweight||80.12¢|
|Vietnam||39,000 VND/kg liveweight||84.90¢|
|South Korea||3,000 KRW/kg liveweight||$1.25|
To find out more about Genesus Genetics, please take the time to visit their website at www.genesus.com .
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