December 28, 2015

Vietnam's ga ta poultry could help cope with TPP implications

This year's Trans-Pacific Partnership would be implemented to the benefit of some of its signatories but for Vietnam's poultry industry, it could become one of the most adversely affected areas from the agreement.

According to a Channel NewsAsia report, the Vietnamese poultry industry - a low-technology sector already facing high production costs - risks losing its competitive edge against chicken imports from the world's top producers. The TPP will likely widen the gates for chicken imports entering the country by removing import tariffs.

Winning the heart and minds of local chicken consumers could lie in authenticity: unique to the country, 'ga ta' or Vietnamese free-range chicken, used for making chicken pho, provides a different flavour.

"The meat isn't too tough nor too soft, and the skin is crunchy, not fatty. Industrial chicken is different, the meat is too soft, the thigh is dry and falls apart," Nguyen Phuong Hai, a celebrity chef, explained. Although close to double the price of factory birds, the key to ga ta's appeal is product differentiation, the Channel NewsAsia report stated.

Ga ta is still loved by many Vietnamese and hence, one of the biggest advantages of the domestic poultry sector, said Hoang Thanh Van, the director of livestock production at the Ministry of Agriculture & Rural Development.

"By developing domestic poultry in a way that focuses on free-range, we'll be able to compete at least in the local market," he added. Moreover, some Asian investors are examining the export potential of Vietnamese free-range poultry.

Not all parties are optimistic about ga ta's prospects in the world market even as the TPP could mitigate the cost of chicken feed.

Nguyen Ngoc Anh, a major ga ta producer, had witnessed a 30% slid in chicken prices compared to six months earlier. The decline is attributed to a combination of growing domestic supplies and strong competition among local farmers.

Anh also pointed out that Vietnam is inept at marketing its products overseas.