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New Year Festival Demand Boosts Pork Supply

03 March 2015
Genesus - The first power in genetics

VIET NAM - The market pig numbers and the demand for pork just before TET (the New Year Festival) will ensure an adequate supply of meat, according to Ron Lane, Genesus Business Director for Asia Pacific and Meggie Vo, Genesus Marketing Representative in Viet Nam.

As reported by Mr. Nguyen Xuan Duong-Deputy Director of Livestock (Ministry of Agriculture and Rural Development Livestock) livestock production and markets in 2014 have been good with more benefits and returns to the farmers,

Furthermore, he reports that livestock production growth has been quite high with an estimate of a four to five per cent increase as compared to 2013.

Viet Nam currently has about 26.80 million pigs (up 2.0 to 2.5 per cent from last year at this time). Pig production and pork production in Vietnam is still mainly from small livestock farms that still account for 65-70 per cent of the pigs marketed and 56-60 per cent for the pork produced. These farms do not have the efficiency of large scale farms.

Total pig production has increased nearly three per cent. Feed production is up about six per cent.

The average range for lean market pigs has various prices throughout the Country. Pig prices in many localities in the Mekong Delta have been reduced by 1,000 to 2,000 VND/kg ($ 0.05 to 0.10 USD/kg-$0.02 to 0.045 USD/lb) compared to the previous month.

Currently, the pig price in provinces such as Hau Giang; An Giang and Vinh Long is in the range of 45,000 VND to 49,500 VND/kg ($2.14 USD/kg-$0.97USD/lb to $ 2.35USD/kg-$ 1.07USD/lb.). Specifically, the price of pork in Vinh Long has been reduced by 1,000 VND/kg ($ 0.05 USD/kg-$0.02USD/lb) from 47,000 to 46,000 VND/kg ($2.23USD/kg-$1.01USD/lb to $2.19USD/kg-$0.99USD/lb.)

For the upcoming Lunar New Year and in the region of the Mekong Delta, the pork supply is abundant due to large increases in the area of the South East and therefore, the market prices tend to decrease.

The value of imports of various commodity groups and animal feed ingredients for the month of January is estimated at $ 255 million USD, up 27.5 per cent compared with the same period in 2014. The main exporters are Argentina (accounting for 40.8 per cent of the market share) and the US (accounting for 12.7 per cent of the market share).

According to the Association of Feed of Viet Nam and for the month of January, the price of feed for broilers and swine were down respectively five per cent and 7.3 per cent compared to the average price for the same period January 2014. The average price of feed was down by two per cent compared to the average monthly price for December, 2014.

Also, since the VAT exemption has been implemented (under the law amending and supplementing a number of articles of the Tax Code-with several exemptions on different feed ingredients) and the current decline on freight rates, then the animal feed industry should show discounts ( Expected cost reductions of about 2.5 per cent is expected on feed prices to farmers).

With plentiful pork supply, with the downward trend of oil prices (gasoline) and with a decrease in feed ingredient prices, the pork business will tend to stabilize the prices in the near future.

In 2014, no major outbreaks of epidemic threatened Vietnam's livestock industry (as of 21 January 2015, the country does not have any reported blue year disease (PPRS) in the provinces. For Foot and Mouth disease (FMD) only Son La province has cases of FMD within 21 reported days.

Allocation of market pigs according to the following areas: Red River Delta is 25.74 per cent; Midlands and Northern Mountains is 24.1 per cent; the South East is 10.51 per cent and the Central Highlands was 6.58 per cent.

From 2011 through 2015 (planned), the number of slaughtered pigs has increased slightly and the total amount of all meats has increased at an annual rate of 2.12 per cent. In the year 2011, meat production reached 3.09 million tonnes; in 2013 it was about 3.22 million tonnes; it is estimated to be 3.29 million tonnes in 2014 and the plan is to reach 3.37 million tonnes in 2015. So after 5 years of development, pork production is 74.2 per cent (2013) of the total production of all kinds of meat.

The quality of pork is increasing to meet the tastes of consumers in the country. Again for 2015, pork production will fluctuate around 72-74 per cent of the total meat production. (Meat consumption in Vietnam went from about 16.7 kg (36.74 lbs) per capita in 2001 to almost 32.8 kg (72.16 lbs.) per capita in 2011. It is projected to reach 35kg (77 lbs.) per capita by 2020).

According to the five year plan presented by the Ministry of Agriculture and Rural Development to the Ministry of Planning and Investment and the Ministry of Finance, the development plan for the livestock industry from 2016 to 2020 is as follows:

Viet Nam's livestock industry oriented restructuring steps: moving from small livestock farms to larger scale; livestock development to focus on the model farm size; maintain livestock producers, but have then use more industrial and high-tech applications; encouraging the organisation of closed production (biosecurity and minimize disease risks); and the link between the various stages in the value chain to cut costs, increase efficiency and to increase value.

Encourage gradual shift from farming areas of high population density (delta) to where the population density is low (midland and mountainous) and to locate the breeding areas far from cities and residential areas.

Development priorities are for broiler farms and good hybrid pigs. By 2020, these new farms will be over 60 per cent of the broilers produced and the hybrid pigs will account for over 75 per cent of the pigs marketed in Viet Nam. The value of livestock production period 2016 to 2020: the average growth of 4.5 per cent with the proportion of the livestock sector within the total value of agricultural production will reach 28 per cent.

By 2020 it is projected that the Country will produce a total of 28.7 million on-farm pigs. The sow herd will be between 3.0 to 3.5 million. Most of the breeding stock will be from foreign sources-in particular, about 90 per cent of the market pigs will come from the imported breeding stock. The total meat production will reach 6.4 million tonnes, of which pork will be 4.2 million tonnes. Total pork exports will reach 1 million tonnes. Production of animal feed will reached 19.34 million tonnes.

Like last month, the CPI in January, 2015 fell. Again, the world oil price decline is still the main reason that the national CPI continued to decline.

Transportation had a decline of 3.96 per cent, which contributed about 0.35 per cent reduction in the overall CPI. General Statistics Office also said that most of the food items in the food basket increased as there is an increased demand prior to the Lunar New Year, but the increase is not high, as follows: pork prices rose 0.31 per cent; beef prices rose by 0.49 per cent; chicken prices rose by 0.71 per cent; and the price of eggs rose by 0.96 per cent.

Earlier this month, reports about Viet Nam's economic prospects for 2015 were the first to mention the risk of deflation.

Specifically, the report says there are signs that the economy is recovering with a feasible growth rate of 6.2 per cent in 2015, but the potential risk of deflation due to plunging oil prices could hamper the recovery of Viet Nam's economy.

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