March 9, 2007

Thailand: Slump in pig prices bad news for farmers, good news for consumers
 

 

Thai farmers continue to appeal to the government to solve the problem of a severe drop in pork prices by ending the current cycle of falling prices and helping to reduce their losses.

 

Last month, the farmers have slaughtered 1,500 piglets in front of the Nakhonpathom Provincial Livestock Office in protest of the plunging swine prices.

 

An excess number of pigs began flooding the market in the fourth quarter of 2006. The oversupply was due to increasing production of pigs and soaring livestock prices since 2004. 

 

The factors have motivated farmers to raise more hogs.

 

The consumption of pork has also not increased despite outbreaks of bird flu since July 2006.

 

Volume production of broilers and eggs has even increased resulting to cheaper chicken and egg prices. The low prices, cheaper than pork, have encouraged poultry's continued popularity.

 

Exports of some types of pork products have also dropped in 2006. Rising pig prices at home and a firm Baht were obstacles to the exports of swine and related products.

 

Considering the entire export value of swine and related products in 2006, there was an overall increase over 2005. Focusing on each individual product, products that showed growth in exports included salted, dried or smoked and prepared or preserved pork, while exports of live pigs, frozen, chilled and fresh pork and parts were decreasing.

 

The import value of swine products has also risen. Although the export value of some types of pigs and related products has decreased, the import value of swine products has risen, particularly for offal, as well as for salted, dried or smoked and prepared or preserved pork. This has indirectly driven the domestic prices of pigs and related products lower, as some consumers have turned to imported products instead.

 

In early 2007, the Thai Ministry of Agriculture and Cooperatives together with pig farmers and swine integrators have come up to solve these problems.

 

The resolution imposed scores of urgent measures, including culling some 40,000 piglets per month from the farming system, where 1 piglet per pigpen would be taken. Pig farmers were also asked to send 100,000 sows to slaughter after they had delivered their 5th piglet broods. Other measures included culling 10 percent of the sows remaining in the farming system, plus reducing volume by processing 100,000 piglets as Moo Han (barbecued sucking pigs) and storing 30,000 farmed pigs in cold storage to process later as various products. The private sector was also urged to export cooked pork overseas, e.g., to Japan and the EU.

 

In addition to these measures, the Ministry of Commerce has also introduced the '2 kilograms of pork for THB100' program, which is expected to solve the problem of slumping prices within 8 months (or by around August 2007). These guidelines will enable entrepreneurs and pig farmers, both large and small, to survive the current crisis.