Capitalizing on pork export growth potential in Vietnam

It is important to highlight the versatility and value of U.S. pork for chefs and other foodservice professionals in this competitive market.


Source: U.S. Meat Export Federation (USMEF)

via National Hog Farmer - Sep 09, 2020


Historically, Vietnam's strong appetite for pork has been mostly satisfied through domestic production. This has changed significantly due to the country's struggles with African swine fever, which was first confirmed in Vietnam in February 2019.


By mid-2019, ASF had spread to all 63 provinces and by the end of that year losses totaled nearly 6 million head or about 22% of Vietnam's total swine herd. In 2018, prior to confirmation of ASF, Vietnam's pork production reached 2.81 million metric tons. USDA estimates Vietnam's 2020 production to be 2.38 million mt and projects another decline next year to 2.25 million mt.


In 2020, ASF cases in Vietnam have subsided for significant periods of time, but animal health officials and the swine industry continue to battle occasional outbreaks. Vietnam's hog prices have remained high, suggesting continued pork shortages. August prices for live hogs in southern Vietnam averaged $1.67 per pound, up 140% from last year. Meanwhile, pork imports have increased dramatically, climbing by an estimated 58% year-over-year to more than 95,000 mt.


Despite interruptions in production that impacted second quarter exports, the U.S. industry definitely capitalized on Vietnam's increased need for imported pork. January-to-June exports of U.S. pork and pork variety meat totaled 8,232 mt, up 148% from a year ago, while value climbed 164% to just under $18 million. This included an even stronger increase in pork muscle cuts, which were up 237% from a year ago to 6,246 mt, valued at $15 million (up 186%).


In addition to the size of Vietnam's import surge, also notable is the degree to which its slate of pork suppliers has diversified. While the European Union is still Vietnam's largest supplier in 2020, EU exports actually declined 2% in the first half, to about 41,000 mt. Conversely, Russia's exports to Vietnam more than tripled from a year ago, increasing 205% to nearly 22,000 mt. Vietnam is now Russia's second largest export destination, trailing only Hong Kong, with Vietnam accounting for 27% of Russia's total export volume. As of late-August, 16 Russian pork establishments were approved for export to Vietnam, with five added within the month. Canada's first-half exports to Vietnam also increased sharply, from just 108 mt a year ago to more than 11,000 mt in 2020.


"Vietnam's emergence as a major pork destination highlights some important developments in global pork trade," explains U.S. Meat Export Federation Economist Erin Borror. "After closing several years ago to pork imports from the EU, U.S. and Canada, the Russian government made a concerted effort to bolster its domestic pork industry. But Russian producers and processors must export if they're going to be profitable, and Vietnam is proving to be a solid market for Russian pork."


Canada's rapidly growing business in Vietnam is due in part to tariff reductions achieved through the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. Vietnam's most-favored-nation tariff rate for frozen pork muscle cuts is 15%, but Canadian pork pays just 9.3%. The MFN rate for pork variety meat is 8%, but Canada pays just 4%.


A free trade agreement between Vietnam and the European Union entered into force Aug. 1, extending similar tariff relief to EU pork. Under this agreement...


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