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·         Vietnam’s Pork Shortage May Surge to $1.3 Billion by January

·         Increasing pork prices in China a magnet for Vietnamese traders

·         Vietnam's corn demand for pork feed falls on African swine fever



Vietnam’s Pork Shortage May Surge to $1.3 Billion by January


    African swine fever wipes out 20% of nation’s pig herd

    Pork Shortage May Hit Half a Million Tons by Lunar New Year


By Mai Ngoc Chau, Bloomberg

September 9, 2019


Vietnam is at risk of a 500,000 ton shortage of the meat most of its citizens rely on for daily protein between now and the Lunar New Year in January as African swine fever ravages the nation’s hog herd, according to Ipsos Business Consulting.


“The pork supply has become scarce,” said Nguyen Tat Thang, general secretary of the Vietnam Animal Husbandry Association. “Vietnam’s pork imports jumped 5- to 7-fold in the first half of the year and will rise more through the end of the year.”


It’s unclear, though, if pork producers from markets such as the U.S. and Europe will be able to plug a significant portion of the shortage, valued at about $1.29 billion, said Phong Quach, the country head of Ipsos Business Consulting. The Vietnamese prefer fresh meat, which is purchased at traditional wet markets, while most imported meat is frozen, he said. Facilities for storing, defrosting, cutting and packaging massive amounts of pork to meet daily consumption and buying habits, and a system to distribute the meat to local markets beyond large supermarkets in major cities, would be needed, Phong added.


The pork shortage is adding pressure to the government’s efforts to keep inflation below 4% this year. About 70% of all meat consumed last year in Vietnam was pork, according to the Agriculture Ministry.


So far about 5 million pigs have been culled across Vietnam -- equal to 20% of the nation’s hog herd -- since the disease was first reported in two northern provinces at the start of February, Thang said. Disease control efforts have so far failed to prevent the transmission of the virus, which has re-emerged in some provinces that previously had been declared free of swine fever, he said.


“I am very concerned about the looming lack of pork supply as all the sows in the affected farms were culled or sold due to the swine fever virus,” said Nguyen Kim Doan, deputy head of the animal husbandry association in Dong Nai province. The province, known as the country’s “pig capital,” has seen more than 30% of its pig pollution culled. “It is very dangerous to produce new pigs as the virus has emerged everywhere across Vietnam,” he said.


Consumers are likely to start experiencing the pork shortage at the end of October...


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Increasing pork prices in China a magnet for Vietnamese traders


By Hong Chau, VN Express International (Vietnam) 

September 9, 2019


 Vietnamese traders are exporting pork to China despite forecasts of declining domestic supply due to outbreaks of the African swine fever.


Tam, who buys pork in the south, said his exports to China have increased in the last two months, and fetch a margin of VND500,000-1 million ($21.55-43.1) per pig. "Prices are high in China because it stopped buying from the U.S."


Nguyen Kim Doan, deputy chairman of the Dong Nai Breeding Association, said traders are selling Vietnamese pork to China because of the large gaps in prices in the two countries.


Pork costs CNY26.67 ($3.74) in China and just VND50,000 ($2.16) in Vietnam, a 43 percent difference.


China, the world’s top pork consuming nation, earlier this month canceled orders to buy 14,700 tonnes of U.S. pork as the trade war between the two largest economies continued. Industry insiders have forecast prices in China to increase by 70 percent from last year in the coming months.


In Vietnam, they have risen by up to 28 percent to VND50,000 ($2.16) in the north and VND40,000 ($1.72) in the south since supply has been falling after African swine fever swept the country.


Some 4.7 million pigs have been culled since the disease was first detected in February this year.


Producers are reluctant to return to the business after having to cull infected animals, the Department of Processing and Market Development of Agriculture Products said.


It estimated prices to rise further, especially during Lunar New Year Festival (Tet) next January.


Vietnam could face a shortage of 500,000 tons in the second half this year, or 20 percent of demand, according to market research firm Ipsos Business Consulting.


In January-August the country exported $449 million worth of meat, up 3.6 percent year-on-year from 2018, mostly because of the rise in pork exports to China.


All provinces and cities have reported the disease...


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Vietnam's corn demand for pork feed falls on African swine fever


Mugunthan Kesavan, S&P Global/Platts

09 Sep 2019


The African swine fever outbreak in Vietnam has reduced the feed demand for corn from pork sector this year, but a rise in consumption from poultry has mitigated some pain for the feed industry, market sources said.


Since Vietnam's Ministry of Agriculture and Rural Development confirmed its first ASF outbreak in February this year, a total of 63 provinces/cities reported outbreaks and more than 4.5 million pigs have been culled, according to Food and Agriculture Organization.


ASF is a contagious viral disease that affects domestic and wild pigs, and while not dangerous to humans, the disease causes up to 100% fatality in pigs, according to FAO.


Vietnam, the largest importer of corn in Southeast Asia, imported 10.12 million mt of corn in 2018, with the crop being a major ingredient in hog feed.


Depending on the severity of the ASF, Vietnam's corn consumption in the feed sector could drop by 10% year on year in 2019, said Rabobank's senior grains and oilseeds analyst Oscar Tjakra.


"African swine fever has had a significant impact on the industry, particularly in production and trade in pork and livestock feed ingredients such as corn in Vietnam. Mainly, swine feed volume has decreased between 20%-30% due to the reduction of pig population because of the ASF outbreak," said Mariano Berdegue, Managing Director, Cargill Feed & Nutrition in Thailand & Vietnam.


Demand for feed from the hog industry has fallen about 20%-25%, a Vietnam-based consultant working with a major grain exporters' body said.


In 2019, corn imports in Vietnam were at 5.73 million mt as of August 15 compared to 5.76 million mt during the same period last year, according to the country's custom data. In the last five years, except for 2017, corn import growth in Vietnam has ranged between 10.8%-117.9%.


In 2017, corn demand took a hit following a scale back in the hog industry and also partly due to the price competitiveness of feed wheat.


"Any reduction in Vietnam's corn import demand will reduce Southeast Asian corn import demand. I think Vietnam's corn import will decrease in H2 2019 as compared to H2 2018 due to ASF," Rabobank's Tjakra said.