African swine fever presents opportunity for Vietnams large-scale livestock enterprises

Consumers will gradually shift to purchasing from modern distribution channels dominated by large-scale enterprises such as supermarkets, grocery stores, where quality and originality of the pork is ensured.

African swine fever (ASF) should be considered both a challenge as well as an opportunity for large-scale livestock enterprises, such as Dabaco Group, Masan Group, or Vissan, according to Viet Dragon Securities Company (VDSC). 

As small-scale hog farm owners have been affected remarkably both from successive diseases, the repopulation from this area will be limited. Pork supply, thus, will be under control of the large-scale enterprises, VDSC stated. 

Moreover, consumers will gradually shift to purchasing from modern distribution channels dominated by large-scale enterprises such as supermarkets, grocery stores, where quality and originality of the pork is ensured.

Therefore, if the large-scale enterprises manage to control the stock well and ensure their farms stay away from the infection, it is expected they will benefit when ASF is under control, VDSC said. 

ASF spreading to 23 cities/provinces

ASF was first detected at Hung Yen at the beginning of February 2019. Until April 2019, according to the Ministry of Agriculture and Rural Development (MARD), ASF has been found in 23 provinces and cities across the country namely Hung Yen, Thai Binh, Hai Phong, Thanh Hoa, Ha Noi, Hai Duong, Ha Nam, Hoa Binh, Dien Bien, Thai Nguyen, Quang Ninh, Ninh Binh, Nam Dinh, Lang Son, Bac Kan, Son La, Nghe An, Bac Ninh, Lai Chau, Bac Giang, Thua Thien-Hue, Quang Tri, and Vinh Phuc. 

The disease was mainly found in small livestock farms, where hygiene and biosecurity conditions are not good. The total number of terminated ASF-infected hogs is 73,000.

Although ASF does not spread to humans, it still weakened consumer sentiment on hog meat, and pork prices have decreased strongly. According to MARD, pork prices have decreased by about 14% from VND46,000-52,000/kg (US$1.98 – 2.24) in January 2019 (before ASF was first detected) to VND38,000-46,000/kg (US$1.64-1.98).

Under the impact of ASF, hog owners shall be aided VND38,000/kg (US$1.64) in accordance with Decree No. 02 in 2017. This regulation someway makes the hog owners not willing to actively report the ASF-infected hogs and terminate them.

One of the reasons was the price of VND38,000/kg (US$1.64) is not relevant compared to the market price. On February 20, right after the ASF detection, the hog prices were VND49,000-56,000/kg (US$2.11 – 2.41) in southern provinces, VND45,000-49,000 dong/kg (US$1.94 – 2.11) in central ones, and VND46,000-52,000/kg (US$1.98 – 2.24) in the North.

Meanwhile, there is no difference in supporting prices of breeding hog and meat hog, while breeding hog is more valuable than meat hog.

It is worth mentioning that the conditions to receive aid are difficult such as hog owners must register with the Commune People’s Committee when they started raising livestock. In fact, most of the ASF-infected hog farm are small-scale and intersperse residential areas. Therefore, they usually did not have the initial registration.

Government’s prompt actions

Due to the aforementioned reasons, hog owners tend to sell the infected or infection-suspected hogs, increasing the risk of ASF spreading further into unaffected areas. Recently, at the Vietnamese government monthly meeting in February, Resolution No.16 was issued to promptly address these issues above.

Firstly, for the runt and meat hogs, the supported price shall be 80% of the local market prices where the disease occurs.

Secondly, for the breeding hogs, the supported price shall be from 1.5 to 2.0 times the supported price of other hog types at the moment of the disease occurrence.

​Thirdly, terminated-hog owners do not need to meet the condition of initial registration confirmed by the Commune People’s Committee.

It is expected the changes in policies are prompt and reasonable when prices, procedures and conditions to receive aid have all been adjusted for the hog owners’ convenience. Therefore, these changes are expected to make a positive impact to prevent the spread of ASF, consequently helping on the recovery of the pork market.