Pork prices expected to increase sharply in the second half of the year

In the Vietnamese market, the widespread swine fever epidemic has caused pork prices to fluctuate erratically between regions. Currently, the average price in the southern market is about 28,000 - 35,000 VND per kg, while in the northern market it is about 38,000 - 42,000 VND per kg.

According to pork suppliers, the above prices are still low, but in the coming time, the price of live pigs will increase because the total domestic pig herd has decreased significantly. On the other hand, the price of imported pork is also increasing sharply.

Mr. Nguyen Dang Phu, Deputy General Director of Vissan, said that if at the beginning of the year the price of imported pork was only 40,000 - 50,000 VND per kilogram, it has now increased to 80,000 VND. The price of imported pork has not stopped at this level and will increase when the swine fever spreads to many countries around the world.

According to Mr. Phu, China is a country with a large source of pigs, but after being affected by the swine fever epidemic, the country's pig supply has also decreased sharply and the price of live pigs in China is escalating.

Specifically, the price of this live pig is fluctuating between 19 - 22 yuan per kilogram (64,000 - 74,000 VND). According to the Ministry of Agriculture and Rural Affairs of China (MARA), the average wholesale price of pork in June 2019 in China increased by 29.8% compared to the same period last year, reaching 21.59 yuan (about 3 USD) per kilogram. MARA believes that the tight supply of pork will cause prices to continue to increase in the coming months.

"Pork prices in China in the second half of 2019 could increase by more than 70% compared to the same period last year, reaching a record high, due to a severe decrease in supply," predicted Mr. Tang Ke, Director of MARA. According to Nomura Bank, pork prices in China could increase by another 40% in the second half of the year.

Sharing the same trend, pork prices in the North - the origin of the African swine fever epidemic in Vietnam - are increasing sharply and are expected to continue to rise in the second half of this year.

According to the report of the Ministry of Agriculture and Rural Development, in the first 6 months of the year, the total pig herd nationwide decreased by 5.5% compared to the same period in 2018. Currently, the total pig herd nationwide is about 28 million. By July 15, African swine fever had appeared in 62 provinces and cities nationwide, the number of sick pigs that had to be destroyed was more than 3.3 million, accounting for over 10% of the pig herd nationwide. In particular, African swine fever is tending to attack very large-scale livestock farms.

Research firm Ipsos Business Consulting Ipsos estimates that the total sow herd nationwide as of June 2019 had decreased by 30% compared to the same period last year. Small-scale farmers are the segment most affected due to lack of preventive measures and low biosecurity. According to Ipsos, by the end of 2019, the sow herd of the small-scale segment will be less than 40% of the total herd.

Given the above developments, the Department of Processing and Market Development (Ministry of Agriculture and Rural Development) also said that pork prices will fluctuate strongly in the last 6 months of the year, especially during the Lunar New Year. The reduction in supply not only occurs in the domestic market but also in many other countries that have suffered losses from African swine fever. Ipsos also predicted that from the end of 2019 to the Lunar New Year 2020, Vietnam may have a shortage of up to 500,000 tons of pork, accounting for nearly 20% of total demand./.