Investments in Vietnamese pig sector despite ASF challenge

Leading Chinese feed producer, New Hope Group, is planning to construct three pig farms in Vietnam, despite the threat from the African Swine Fever (ASF) virus sweeping through that country and other markets in South East Asia.

The farms, located in Thanh Hoa, Binh Phuoc, and Binh Dinh provinces, will produce 930,000 pigs on an annual basis; the farms are scheduled to be up and running by 2021, as first reported on Reuters.

New Hope has invested more than 1.1bn yuan ($163.51m) in the farms. 

The Chinese group, which typically produces around 2.4 million pigs annually and whose feed business accounts for 55% of its income, does not see a major impact from the ASF epidemic, its chairman, Liu Yonghao, said in early March. The company’s feed-to-meat business is seeing higher chicken prices resulting from the outbreak of the disease in pigs, he told a press conference back then.

ASF spreading in Vietnam ​

The latest reports in relation to ASF spread in Vietnam from that country’s ministry of agriculture and rural development (MARD), as per updates on FAO's website​​, confirm that, in total, 24 provinces/cities have now reported outbreaks, and more than 89,600 pigs have been culled.

Rabobank expects production losses in that country’s swine industry to exceed 10% as a result.

In an industry note last month, the analysts said production losses from African swine fever (ASF) have eclipsed initial estimates. 

Cambodia confirmed the arrival of the virus in March. Due to the commonalities with Chinese production, Rabobank predicts both Cambodia and Vietnam will suffer sizable ASF herd losses, on a percentage basis, and will experience similar difficulties in disease containment.

Since its discovery in August 2018, ASF has spread to every province in mainland China. With ASF now affecting an estimated 150-200m pigs, the expected 30% loss in pork production is nearly 30% larger than annual US pork production and equivalent to Europe’s annual pork supply, said Rabobank.

In early April, the Thai government approved funding to prepare the country for a potential outbreak.

“Much of Southeast Asia will have difficulty repopulating its herd and securing provisional protein supplies. ASF losses in Southeast Asia will exacerbate global protein shortfalls, adding further upside pressure to global markets.”

Australia, meanwhile, remains on high alert in relation to ASF; prevention measures continue to be put in place to prevent the virus from entering the country and undermining its pork industry, valued at AUS $1.1bn. The disease was detected in 46 pork products seized at international airports and mail processing centers in Melbourne and Sydney from December through to February, according to local media.