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Foreign Chicken Invade Vietnamese Industry

20 March 2008

VIETNAM – Vietnamese chicken farmers have become the latest victims of a global market that allows cheap foreign labour and resources to destroy local businesses. In a pattern that is becoming familiar across the country many chicken farmers have narrowed their production scale or closed up shop altogether due to heavy losses.

Recently, prices of goods have been escalating, especially food prices. Seafood, pork and beef are now at record high levels. But the price of chicken is falling. What’s happening?

According to the HCM City Veterinary Agency, HCM City is consuming a large volume of imported chicken, around 80 tonnes a day and nearly 200 tonnes a day during weekends and holidays.

Imported chicken traders said hundreds of containers of chicken land at ports in HCM City each day. At present over 100 containers (26 tonnes/container) are now at the city’s ports, waiting for customs clearance. In addition, a large volume of chicken that traders imported before the lunar New Year which was not sold out during Tet is now flooding the market.

Doan Ngoc Tho, a broker of cattle and poultry products, said imported chicken is selling very well. The tax rate on this product is low so tens of companies import chicken. As the imported volume is high, the price decreases. Currently, a kilo of chicken wings is around VND40,000 and VND30,000 per kilo of chicken legs. At these low prices, importers still get high profit because the import prices are very low, around VND30,000/kg of wings and VND18,000-22,000/kg of legs.

Local farms face bankruptcy

Late last year, farms earned VND38,000/kg of free-range chicken and VND30,000/kg of industrially-raised chicken. The prices are now VND29,000 and VND21,000/kg, respectively.

Meanwhile, the price of breeding chickens has risen from VND8,000 to VND11,000/head. The price of chicken feed is nearly double that of last year at this time. These factors have caused chicken breeders heavy losses.

Pham Van Minh, Director of Phu An Sinh Company, the owner of many chicken farms in the southern province of Ba Ria-Vung Tau, estimated: late last year, the production cost of 1kg of chicken was around VND22,000; it is VND27,000-28,000 now, not including medicines, care expenditures.

Poultry breeders in the south are narrowing production to curb losses. Many large farms which had tens of thousands to hundreds of thousands of chickens have cut flocks by 50% or keep only several thousand heads. Some others have had to stop breeding chickens and put their farms up for sale – but nobody wants to buy.

Muoi, the owner of a chicken farm in Long Khanh District, southern province of Dong Nai, said his farm doesn’t buy ready-made feed from animal feed factories but buys materials to process chicken feed itself to reduce losses.

Poultry traders say without imported chicken, the price of local chicken would have increased by 15-20%.

As the price of pork has soared recently, imported pork as begun to enter the local market. HCM City traders import around five containers of pork, equivalent to 153 tonnes, a month. The volume is expected to increase greatly in the coming time.

ThePoultrySite News Desk



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