October 30, 2007

 

Scarce supply, higher prices for Vietnam's chicken

 

 

Amid the havoc of bird flu, poultry breeding is still booming in Vietnam with prices at a surprisingly record high and a looming supply shortage.

 

According to Vietnam News daily, farmers have been struggling with steep prices and scarce supply of hens.

 

For over a week, the plans of Ngo Van Viet of Tan Thanh District from Ba Ria-Vung Tau Province to raise chickens were halted as Thai poultry and feed dealer CP was unable to give him breeds.

 

Viet said CP "backed out of the deal" as he used another brand of poultry feed. He said this puts companies in a "unique position to make their own demand," thus resulting to supply shortfall.

 

Many households in the area also have empty farms or diminished stock due to hen scarcity. According to Minh from Long Thanh District, Dong Nai Province, farmers do not want to leave their farms due to their high investment costs but high chicken prices would also leave them in deep debt.

 

Minh said that historically, the price of hens from CP had never risen to VND13,000 per newborn bird. He said prices from another poultry dealer Japfa is now priced at VND14,000. It could shoot up to VND16,000 - VND17,000 from last year's price of VND5,000- VND6,000, he said.

 

Hy, a large breeder in Vinh Cuu District, Dong Nai Province, said that her farm had only about 7,000 hens for the week, down from 20,000 previously. She considered raising chickens as "more valuable than gold. The price is high, and it is difficult to buy them."

The shortage of supply has valid reasons, according to a CP official. There are fewer offspring this year because parenting hens have aged and must be replaced by younger birds. 

 

The official said CP is now selling 30,000 to 40,000 hens per week from the previous 50,000 to 60,000.

 

The number of new birds is not enough to close the gap as demand accelerates, which, in turn, leads to a scarcity.

 

On the other hand, Japfa has doubled its number of birds on the market. Nguyen Quoc Trung, Japfa general director, said that the price has recently shot up and remained high at about VND 26,000 to 27,000 per kilo. As a result, many people have rushed to breed, leading to market scarcity.

 

The consumers are still buying them at these prices, he said, as breeding continues to yield high returns of VND20,000 to VND21,000 per kilo.

 

A breeding expert said that the price of breeding hens was likely to drop in the near future as a Malaysian investor plans to introduce a new source. Moreover, CP also plans to raise its numbers soon.