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And they cry alone
The Saigon Times Daily
Monday,  Jan 9, 2017,22:29 (GMT+7)

And they cry alone

The Saigon Times Daily

Pig farm owners these days are grappling with a protracted nightmare, as the live pig price has tumbled below production cost. For many weeks on end, the live pig price has been hovering around VND33,000 a kilo, while the cost is estimated at between VND38,000 and VND40,000.

A small farm rearing some 100 pigs can rack up a loss of VND500-700 million every three months, a period needed to turn out a new herd of pigs. Farm owners bear the brunt of all losses, as traders can still maintain or even increase their profit margins. Such an agony is seen to continue unabated in the absence of intervention from State authorities.

Nguyen Kim Doan, vice chair of the Husbandry Association of Dong Nai Province, explains that prices started to plummet months ago when exports to China dwindled, resulting in a severe glut of pigs in the province. Earlier this year, Chinese traders had boosted imports of pigs from Vietnam to compensate a shortfall in China, causing the live pig price in Vietnam to skyrocket to around VND55,000 a kilo. Such a price surge has enticed many farmers to expand their herds.

The vice chairman of Dong Nai Husbandry Association relates that in many cases, farmers now have to sell pigs at VND30,000 a kilo, or even VND25,000 a kilo for oversized pigs. That means a reduction of between 40% and 50% compared to the peak prices, and a contraction of 30% against other normal periods.

However, traders remain unhurt. The pork retail price in HCMC has only inched down slightly, by around VND3,000 a kilo, meaning a discount of 5% or so. Slaughterhouses and food processors find the steep fall in live pig prices an opportunity to earn higher profits, especially at a time of high demand in the lead up to the Lunar New Year holiday.

As farmers are incurring hefty losses or going bankrupt, the total herd – currently at some 30 million pigs nationwide – will certainly fall, leading to a shortage of meat for the domestic market in the time ahead and an upsurge in imported meat. The cycle is therefore unsustainable.

In times like this, the intervention of State agencies, especially the ministries of industry and trade; and agriculture, is badly needed, not only to solve the market glut, but also to map out a long-term strategy to help farmers deal with the vicious cycle. Given the market glut, farmers cannot keep pigs in their farms as they will become oversized. There should be more modern cold storage facilities, there should be more processing plants, and there should be more efforts to secure export markets, so that all stakeholders, from farmers to traders and the State, can achieve success. Do not let farmers cry all alone.

The Saigon Times Daily

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