November 11, 2003

 

 

Vietnam Pork Exporters Fast Losing Foreign Markets; Faced With Major Rivals China & Brazil  
  

The Ministry of Trade (MoT) recently reported that Vietnamese pork exporters have completely lost Hong Kong¡¯s and Russia¡¯s markets and are losing others as it cannot compete with major rivals such as China and Brazil.

 

In Hong Kong, since China offered more preferential policies to boost pork exports to the island, Vietnamese pork products no longer have a foothold in the market, the ministry said.

 

Meanwhile, in another traditional Russian market, which annually imports around 15,000-30,000 tons of Vietnamese pork, pork shipments from Brazil have dislodged its products. In 2004, Russia set quotas to buy only 337,500 tons of foreign pork and Vietnamese exporters were unable to send any shipments.

 

According to MoT, the lower competitiveness of Vietnamese pork in foreign markets was attributed to higher production costs, mostly because of the cost of importing raw materials to produce pig feed, estimated at $200 per ton higher that that of foreign rivals. "The Vietnamese pork export price was $100-150 per ton higher compared with China and higher than all other exporting countries," a MoT official commented.

 

Pig raising costs in Vietnam are too high, standing at $750 per ton of pork in the Red River Delta and $900 - $1,000 per ton in the Mekong Delta, compared with $650 per ton in China and $600 - $800 in the US. Meanwhile, the average lean meat content in those countries is 1.5 times higher than found in Vietnam.

 

Many raisers are unable to afford expensive industrial products and feed their pigs with leftovers, which reduces pork quality and fails to meet customer requirements for higher lean meat content.

 

Vietnamese pigs have 35.4-42.6% of lean meat, significantly lower than the 55% recorded in other countries. The country has over 17.5 million pigs providing around 1.3 million tons of meat each year.

 

Feed now accounts for 70-75% of the pig raising industry's production costs. But most husbandry bases throughout the country must import feed and raw materials because of shortage of domestic supplies.

 

Farmers nationwide are able to supply only 600,000 tons of corn to pig raisers, meeting only 37.5% of the total demand of 1.6 million tons.

 

Last year, Vietnam spent $218 million on importing a total of over 900,000 tons of animal feed and raw materials. Of these, soybean, corn and fish powder accounted for 10-40%.

 

Most of the existing 20 pork export plants with total capacity of 50,000 tons per annum are operating with outdated equipment and unhygienic processing condition. This has prevented them from penetrating in to new markets such as Singapore, Japan, the Philippines, and South Korea, which impose high quality requirements on pork.