July 21, 2006

Cheap US chicken floods Vietnam's market

Cheap American chicken in Vietnam, some at nearly at half the price of local ones, has caused domestic chicken prices to plunge, local news reports said.

While domestic chicken costs around VND40-60,000/kg (US$2.5-3.75)kg, its American counterpart can be nearly half-price at VND32-34,000/kg ($2-2.12).

An executive of Goodfood Company, an importer of US chicken, said chicken imports started in January when Vietnam's own poultry market was seriously affected and it opened the market to countries free from bird-flu.

Although actual volumes are unavailable, the company confirmed the influx of American chicken seems to be part of a rising tide.

Explaining the price difference between Vietnamese and US products, Goodfood's executive said that industrial-scale poultry industry in the US simply has the efficiency and economics of scale to beat small-time household production in Vietnam.

Another reason was that differing tastes resulted in the US exporting parts not popular at home but well-received in markets abroad like Vietnam. These were the parts sold at lower prices, the company said.

Comparing whole chicken prices, The price of US chicken is equal to if not higher than Vietnam's chicken. However, parts are sold at a much more different price.