Pig producers in Vietnam are facing a squeeze on margins that could hit efforts to repopulate the country's pig herd and increase feed demand in the country, market sources told Agricensus.
Producers are caught between government efforts to limit the price of pigs at a time of low domestic demand, rising prices in China and fears that a new round of African swine fever infections could lead to another round of culls. .
Pig prices have fallen in recent weeks after Chinese-backed demand has driven prices in some parts of the country to more than VND100,000/kg (US $4,310/mt), with national prices now averaging around VND76 ,000/kg (US $ 3,270/mt).
This is partly due to falling domestic demand as the country responds to the Covid-19 outbreak.
Government initiatives that attempted to reduce uncontrolled pork prices and cap the price at VND80,000/kg (US $ 3,440/mt).
“We all know that price is based on supply and demand. Pig prices have fallen a lot recently because consumption potential has decreased because schools are closing and few people are willing to dine out due to Covid-19,” said a trader from Vietnam.
“But I think the price will go up soon because I heard that African swine fever is coming back. The virus has not been controlled,” said the trader.
“The production margin is not good – it will limit restocking, especially with ASF and Covid-19 here,” a second market source said.
Vietnam's pig producers are trapped in a vicious circle of pig prices as ASF ravages the country's herd, spurring restocking efforts only for many pig farmers to suffer a recurrence of the disease among new herds.
This has raised questions about the likely strength of demand from the country's feed manufacturers, with Vietnam being one of the world's biggest importers of corn, as well as a major importer of soybeans, soybean meal and corn-based DDGS.
Cross-border trade in China
Since identifying the ASF exactly a year ago, the country's close logistical ties with China have meant it has also had to combat the Covid-19 coronavirus in recent weeks, while trade sources have also flagged fears that bird flu would hit the poultry sector.
This has further clouded the likely demand picture for the coming months, with demand for corn, soybean meal and DDGS expected to suffer, while pork prices in China – which could encourage cross-border trade with Vietnam – continue going up.
“All markets are very slow and we need to adapt,” said the trader.
Source: Agricensus
