Viet Nam: Hog Markets

VIET NAM - Ron Lane, Senior Consultant for Genesus China and Meggie Vo, Research Assistant, provide the latest update on the Vietnamese hog market.

12 December 2013

6 minute read

According to a survey by the General Statistics Office, the country had 26.3 million pigs on farm at the beginning of October, 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 3.3 million tonnes, up 2.1 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).
Recently, the market price has been rising to return to a profitable level for producers. 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 46,000 VND/kg ($2.18US/kg-$0.99US/lb.) and cost of production was about 40,000 VND/kg ($1.90US/kg-$0.86US/lb.). Profit was about 5,000 VND/kg ($0.24US/kg-$0.11US/lb.) or about $23.71US/market pig. The same discussion for the Hanoi region, has producers getting 49,000 VND/kg ($2.32US/kg-$1.05US/lb.) and cost of production was about 43,000 VND/kg ($2.04US/kg-$0.92US/lb.). Profit levels were better at 6000 VND/kg ($0.28US/kg-$0.13US/lb.) or about $28.45 US/market pig. The local China market price has been about 47,000 VND/kg ($2.23US/kg-$1.01US/lb.) Not attractive to local Hanoi producers, but still attractive to the southern parts of Viet Nam. Market pig prices in the southern provinces have increased as local traders buy heavy market pigs to export to China.
It is mentioned that the market price for live pig will increase from now to TET holiday (end of January, 2014) for pig producers.
In conversation with a large scale operation in the Hanoi area, the cost for vaccinations per sow per year is about 320,000 VND ($15.16 USD/sow) and about 150,000 VND ($7.11 USD/market pig).
General Statistics Office has released the consumer price index (CPI) for November and it increased by 0.34 per cent from the previous month. November CPI has increased by 5.78 per cent (year on year) and increased by 6.65 per cent since December 31st, 2012.With an increase of 0.34 per cent, CPI in November is considered the lowest increase in the past 5 years. On a number of food items, pork prices rose 1.1 per cent, chiefly due to increased demand while supply is somewhat declining. Pork prices continue to rise by about 3000 to 5000 VND/kg ($0.14US/kg-$0.06 US/lb. to $0.24US/kg-$0.11US/lb.).
Along with the slight rise of world feed ingredient prices, the price of feed ingredients in Viet Nam during the month of 11/2013 increased slightly compared to the previous month (October, 2013). Currently, the price of rice bran has maintained at 5,900 to 6,400 VND/ kg ($0.28US/kg-$0.13US/lb. to $0.30US/kg-$0.14US/lb.); corn prices fell slightly, down 200 VND/kg ($0.01US/kg-$0.004US/lb.) compared with the previous month. Corn ranged from 5,600 to 6,300 VND/kg ($0.27US/kg-$0.12US/lb. to $0.30US/kg-$0.14US/lb.); soybean meal prices increased by 3.1 per cent from October to an average of 13,200 VND/kg ($0.63US/kg-$0.28US/lb.). Soybean meal has decreased by 7 per cent compared with the beginning of 2013. Fishmeal prices were unchanged from last month with prices ranging from 14,000 to 20,000 VND/kg ($0.66US/kg-$0.30US/lb. to $0.95US/kg-$0.43US/lb.). The domestic cost of feed and raw products is projected to increase slightly, as demand for animal feed and feed materials, during the winter months, usually increases during the New Year and Lunar New Year.
Recent information for the end of October, shows that for the first ten months, Viet Nam spent $2.73 billion USD on imports for feed and feed ingredients, an increase in value of 38.5 per cent from a year ago. In October, imports of these products reached a value of $357 million USD-mainly from Argentina, India and the USA. 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 (last month, the importing of 284,000 million tonnes of corn-valued at $49 million USD and 79,000 tonnes of soybeans-valued at $83 million USD was realized). A comment was made that because of the strong dependence on imported animal feeds and ingredients, the price of animal feeds in Viet Nam is 20 to 30 per cent higher than surrounding countries that rely less on imports.
Viet Nam’s meat imports during the first 10 months of this year has increased by four times compared to the same period in 2012. Ho Chi Minh City area has been quite active and has inspected up to 2,000 tonnes of imported meat in a given week. Poultry can account for 50 per cent of the inspections. Cattle offals have increased by 431 per cent year on year, while swine offals have increased by 72 per cent. The total meat imports this year could reach 90,000 tonnes. Part of the rapid increase in imports is because Viet Nam has acted upon complaints about trade barriers by some WTO countries. Viet Nam total meat production is equal to 95 to 97 per cent of the total consumed meat.
According to the Veterinary Department (dated as of 11/21/2013) no provinces have bird flu or signs of PRRS (more than 21 days). There are currently four provinces: Thanh Hoa, Ha Tinh, Nghe An and Quang Tri that have outbreaks of FMD. There is a strong suggestion that the recent hurricane that devastated part of the Philippines was the main introduction of FMD into Viet Nam.

Genesus Global Market Report Prices for the week of December 2, 2013
Country	Domestic price (own currency)	US dollars (Liveweight a lb)
USA (Iowa-Minnesota)	77.56 USD/lb carcass	57.39¢
Canada (Ontario)	159.08 CAD/kg carcass	54.48¢
Mexico (DF)	25.5 MXN/kg liveweight	89.63¢
Brazil (South Region)	3.76 BRL/kg liveweight	73.32¢
Russia	79 RUB/kg liveweight	$1.10
China	15.61 RMB/kg liveweight	$1.17
Spain	1.295 EUR/kg liveweight	81.02¢
Viet Nam	44,000 VND/kg liveweight	94.65¢
South Korea	4,175 KRW/kg liveweight	$1.80