Supply-demand of pork: Ensuring stabilization of prices by fourth quarter

Pork is still quite expensive in the "basket" of consumer goods, causing a significant impact on the consumer price index (CPI). Promoting import and rebuilding are two key directions that have been being promoted to gradually increase supply, towards supply-demand balance of pork, and stabilize prices by the end of this year.

By the end of the third quarter and the beginning of the fourth quarter, Vietnam will basically meet pork demand. Photo: Nguyen Thanh

Imported more than 93,000 tons of meat

From the beginning of April 2020, the price of live hog sold has tended to increase. Currently, the price of pork has decreased to around VND78,000 - 88,000 / kg, although this is still a relatively high price.

According to the Department of Livestock Production (Ministry of Agriculture and Rural Development), the most important reason for the high price of pork is due to the reduced supply. Sows and piglets died and were extensively destroyed in the peak. African swine fever took place nationwide from May to July 2019. Live sows were also very restricted to insemination during this period. Besides, farmers have not re-herded, small slaughterers cannot directly buy pork from businesses, must go through many intermediaries.

Following the direction of the Prime Minister, the Minister of Industry and Trade recently issued Decision No. 1899 / QD-BCT establishing an interdisciplinary inspection team chaired by the Ministry of Industry and Trade, in coordination with the Ministry of Agriculture and Rural Development and the Ministry of Finance.

Steering Committee 389 and relevant authorities to inspect, review and assess the status of the entire chain of animal husbandry, production, sales, distribution systems, supply, slaughterhouses and retailing to final sellers directly to consumers for pigs, live pigs and pork products on the market.

Inspection subjects are enterprises, organizations and individuals involved in different stages alongthe entire chain of breeding, production, trading, distribution and supply of breeding pigs, live pigs and porkproducts. Methods of inspection include on-site inspection (direct inspection at enterprises and inspection subjects) or request for written reports, explanations, information and documents to serve inspection teams.

In addition to a number of large livestock enterprises that have started to carry out the re-sowing from October 2019, they will produce products from August 2020, and most of the sows re-breeding in farms and livestock households (the area occupied a large proportion in production) has only started since the end of February 2020.

Notably, according to the representative of the Department of Livestock Production, the Ministry of Agriculture and Rural Development has repeatedly organized meetings and working missions to work with large livestock enterprises to direct production, prevent and control diseases, and stabilize the supply and reduced price for pigs.

As a result, large livestock enterprises (such as Vietnam Joint Stock Company, Dabaco, Mavin, Masan, GreenFeed) have coordinatedwith the Government and sold pigsat the farm with prices from VND74,000-76,000 / kg of live hog.

However, there are still some businesses that have not coordinated to reduce the price of pigs, not accompanying the Government, and there are times when pigs are not sold and raised to increase the volume, affecting the supply. Such as CJ Company, Japfa Company, which have contributed to the price being pushed up.

To offset the pork supply, one of the collective solutions promoted by MARD is importing frozen pork, even importing raw pork from Thailand for slaughter.

Deputy Minister of Agriculture and Rural Development PhungDucTien said that the import of frozen pork does not have "quota". The Department of Animal Health (Ministry of Agriculture and Rural Development) greatly facilitates the clearance of customs. However, the import of pork is not simply due to the raging epidemic of African swine fever, which reduced the total global pig herds by 12%. Meanwhile, in China alone, the total herd of pigs dropped by more than 50%, the country has ordered 3-5 months of pork import contracts with high prices, so it can find a suitable source. This makes it more difficult for Vietnam to import pork.

"However, with the agility of enterprises and the participation of the Agriculture and Rural Development Department, Ministry of Industry and Trade, Ministry of Foreign Affairs, Vietnam has also imported more than 93,000 tons of pork. So far, about live pigs, Vietnam has also negotiated with Thailand to import 70,000 pigs," Deputy Minister PhungDucTien said.

At the end of the year, supply will meet demand

In addition to the temporary solution to promote the import of frozen pork and live pigs for slaughter, the solution was identified as the basis for increasing pork supply, leading to the supply-demand balance of this commodity is to re-herd.

By 2020, the output of slaughtered meat in the first quarter will reach more than 811,000 tons; the second quarter is expected to reach over 900,000 tons; the third quarter reached more than 1 million tons; Q4 was nearly 1.1 million tons.

According to the General Statistics Office (Ministry of Planning and Investment), the average demand for slaughter pigs every quarter of 2018 (before the African swine feverepidemic) was about 920,000 tons. Thus, by the end of the third quarter and the beginning of the fourth quarter will basically meet the demand for pork.

Recently, large enterprises producing breeding pigs replaced their internal operations and processing networks, limiting the sale of breeders. Therefore, the price of breeding pigs is very high at VND2.5 to over 3 million / pig.

According to the Department of Livestock Production, re-herds still face many difficulties and challenges. African swine fever is very dangerous, there is no vaccine for disease; farmers have difficulty adopting biosafety breeding methods, so small farmers are afraid of recurrence of disease. In addition, many localities are not really determined in directing and guiding re-herd and increasing herds because they are afraid of recurrence will cause consequences for the locality.

Notably, some localities have slowly paid support money to pay for damage caused by African swine fever to farmers, so it is difficult for farmers to maintain production. Farmers also have difficulty accessing credit policies, preferential interest rates and land policies to re-farm, maintain production and increase herds.

Speaking aboutAfrican swine fever, Deputy Minister PhungDucTien stated that although Vietnam has not yet produced vaccines, there have been remarkable results to control the epidemic like researching early detection kits; studying pigs with resistance, initial gene explanation, breeding. This is really a useful barrier to speed up re-herding.

According to local reports, by the end of June 2020, the total number of pigs in the country reached 24.9 million, equal to 85% of the end of 2018 without the African swine fever.

"However, it must be made clear that the re-herdingtakes time. From May to September 2019, when the epidemic was high, we have to constantly destroy the pigs in very large numbers. During this time, there was almost no basis ofenterprises that dare to breed. Only around September to October 2019 wasit restarted and there will be new breeding pigs in early 2020. It also takes six months after the breeding pigs, the market will produce by the end of this year, supply and demand for pork will be able to balance this year,"Deputy Minister PhungDucTien said.

In this regard, the Department of Livestock Production gives more specific figures, it is expected that by the end of the third quarter and the beginning of the fourth quarter, Vietnam will basically ensure pork demand. In the future, in order to gradually ensure the pork supply, besides efforts to promote pig re-herding, the Ministry of Agriculture and Rural Development and the Ministry of Industry and Trade and the Ministry of Foreign Affairs continue to support businesses to find sources to ensure the imported meat from nations in the spirit of the Prime Minister’s direction.

In addition, the Ministry of Agriculture and Rural Development creates the most favorable conditions for businesses to be able to import pigsfor slaughter immediately and raise meat from neighboring countries to immediately reduce the pressure on supply. However, this needs to ensure benefits for producers, suppliers and consumers under the direction of the Prime Minister.