VIET NAM - Ron Lane, Senior Consultant for Genesus Viet Nam, and Meggie Vo, Research Assistant, provide an update on the Vietnamese hog market.
- According to a survey by the General Statistics Office, the country had 26.3 million pigs on farm at the end of December, 2013 (a decrease of 0.9 per cent compared to the same period last year). There is estimated to be 3.9 million sows (a decrease of 2 per cent compared with the same period last year) in the total country. Meat output reached 3.2 million tonnes, up 1.8 per cent compared to the same period last year (for June 15th/2013 there was about 26.5 million pigs and for April, there was about 26.98 million total pigs on the farm).
- For the entire year, the total meat supply is estimated to be at 4.3 million tonnes, an increase of 1.49 per cent compared with 2012. In 2013, pork supply reached 3.2 million tonnes (up 1.8 per cent); poultry meat production reached 746.9 thousand tonnes (sales rose 2.4 per cent- up slightly); buffalo meat reached 85.3 thousand tons (down 3.5 per cent); and beef reached 285.4 thousand tons (down 2.9 per cent) compared with 2012.
- Pork supply still represents about 74.4 per cent of the total meat supply in Viet Nam.
- In the first 6 months of 2013, the market price has been most times below the production costs and thus farms have showed unprofitable or less profitable cash flows. Farmers were seeing financial stress and have little incentive to invest in their farms (several farms have closed down or have reduced their sow herd). Market pig prices were: January, 48,000 VND/kg ($2.27US/kg-$1.03US/lb.)(North region) and 44,500 VND/kg ($2.11 US/kg-$0.96US/lb.) (South region); in March, 43,000 VND/kg ($2.04US/kg-$0.92/lb.)(North region) and 38,000 VND/kg ($1.80US/kg-$0.82US/lb.)(South region); and in May, 41,000 VND/kg ($1.94US/kg-$0.88US/lb.)(north region) and 37,500 to 39,000 VND/kg-$1.78US to $1.85US/kg-$0.81US to $0.84/lb.) (South region). Currently and in recent discussion with producers in Dong Nai province, market pig prices were about 50,000 VND/kg ($2.37US/kg-$1.08US/lb.) and cost of production was about 40,000 to 42,000 VND/kg ($1.90US/kg-$0.86US/lb. to $1.99US/kg-$0.90US/lb.). Profit was about 8,000 to 10,000 VND/kg ($0.38US/kg-$0.17US/lb.to $0.47US/kg-$0.22US/lb.) or about $37.92US to $ 47.40US/market pig.
- At 50,000 VND/kg ($2.37US/kg-$1.08US/lb.), the market price has been the highest level in months and the main causes are related to a shortage in the supply of market pigs, producers waiting for TET to garner a higher price and China traders are still paying a premium for heavy market pigs (China traders import 1,000 tonnes/per day of live pigs) from Viet Nam.
- According to records from the Saigon Economic Times Online, the retail market price recently increased by 2,000 to 5,000 VND/kg ($0.09US/kg-$0.04US/lb. to $0.24US/kg-$0.11US/lb.) depending on meat type .In contrast and in the supermarkets and convenience food stores, the resale prices are stable and have been for several months. Mr Dung, from Vissan, said that the price of pork in supermarkets and convenience food stores that are selling Vissan products will remain stable until after TET (New Year). The reason is that Vissan is committed to no retail price increase despite the price fluctuations in pork prices in the period before, during and after the Festival. Vissan is an enterprise engaged in the stabilization program of the Ho Chi Minh City (HCMC) market. Vissan has a processing capacity of 3,000 pigs per day and the company provides 28 per cent of HCMC's pork demand.
- The Ministry of Agriculture and Rural Development (MARD) explains that a growing demand and growth in the local livestock industry is driving the surge in imports of grains (in December, the importing of 543 thousand tonnes of corn-valued at $144 million USD; 268,000 tonnes of soybeans-valued at $152 million USD and 62 thousand tonnes of wheat-valued at $ 20 million USD was realized). For 2013, the total volume of corn imports reached 2.26 million tonnes (valued at $690 USD and up 39.7 per cent in volume and 38 per cent in value as compared to 2012). India and Brazil are two major import markets for these commodities, accounting for 55 per cent and 22.3 per cent of the total imports. The total volume of all soybean imports in 2013 reached 1.39 million tonnes (valued 834 million USD and up 7.5 per cent in volume and 7.2 per cent in value compared with 2012). The total volume of whole wheat imports in 2013 reached 1.71 million tonnes (valued at 584 million USD and down 29.1 per cent in volume and 23.6 per cent in value compared with 2012). The main import market for wheat is from Australia with 68.9 per cent market share.
- Mr Nguyen Xuan Duong, Deputy Head of the Department of Animal Husbandry recently said that the Country’s imports of raw materials for the production of animal feed has been increasing in the recent years by about 16.38 per cent per annum. (Period from 2006 to2012). For 2013, Viet Nam had imported 5.84 million tonnes of animal feed ingredients. The main import market of this commodity group is Argentina (34 per cent market share; United States (12.7 per cent market share) and India (10.8 per cent market share). Local supply accounts for only 45 to 50 per cent of the raw feed ingredients used in producing animal feeds (about 3.5-4 million tonnes of corn, about 1 million tonnes of wheat bran and 1.5 million tonnes of cassava are sourced from local markets for animal feed processing).
- The Viet Nam government is making incentives available starting in February, 2014 for companies to invest in the agricultural sector. Some incentives include a reduction of between 50 to 100 per cent from the government for land and/or water fees used for farming purposes. The VN Government will also provide $140,000 USD for large- scale livestock projects. Agriculture accounts for 20 per cent of the nation’s GDP. Although all sectors of agriculture generated $28 billion USD in export revenues, the government wants to encourage investment to improve the quality of the products and to improve the competitiveness of Viet Nam in global trade.
- General Statistics Office has released the consumer price index (CPI) for December and it increased by 0.51 per cent from the previous month. December CPI increased by 6.60 per cent since 31 December 2012, the lowest increase in the past 10 years. Inflation control target for 2014 is set at 7 per cent by the National Assembly and should be achieved. Industry statistics also mentioned that gross domestic product (GDP) for 2013 reached 5.42 per cent. In general, the agriculture, forestry and fisheries sector increased by 2.67 per cent, with an overall contribution to GDP of 0.48 per cent over last year.
|Genesus Global Market Report|
Prices for the week of February 3, 2013
(Liveweight a lb)
|USA (Iowa-Minnesota)||83.37 USD/lb carcass||61.69¢|
|Canada (Ontario)||167.28 CAD/kg carcass||66.74¢|
|Mexico (DF)||26.6 MXN/kg liveweight||99.81¢|
|Brazil (South Region)||3.52 BRL/kg liveweight||72.98¢|
|Russia||72 RUB/kg liveweight||$1.03|
|China||12.35 RMB/kg liveweight||92.42¢|
|Spain||1.226 EUR/kg liveweight||75.52¢|
|Viet Nam||48,000 VND/kg liveweight||$1.03|
|South Korea||3,582 KRW/kg liveweight||$1.53|
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