Vietnam Livestock and Products Annual 2006

By the USDA, Foreign Agricultural Service - This article provides the poultry industry data from the USDA FAS Poultry and Products Annual 2006 report for Vietnam. A link to the full report is also provided. The full report includes all the tabular data which we have ommited from this article.

20 September 2006

7 minute read

Report Highlights:

Poultry production in Vietnam has stabilized and shown modest increases over the past year as the Avian Influenza situation in the country has improved significantly. This and FMD outbreaks have moderated the very strong growth in pork production of recent years. Overall consumption of meat and dairy products will continue to grow strongly as prospects for Vietnam’s development remain positive, creating opportunities for imports particularly of dairy and beef.

TOTAL LIVESTOCK SECTOR

The government reported that the value of Vietnam’s livestock production in 2005 occupied 25% of the total value of Vietnam’s agricultural production. The government expects the country will raise the proportion of livestock to 30% by 2010 and 35% by 2015. The value of Vietnam’s total livestock in 2005 grew 11.6% while the total agricultural sector increased only by 3.2% (see table 1).

This was significantly higher than in 2004 because of increased swine and beef production and stabilization of the poultry number after the drop of 2004. In 2005, total meat production (live weight) increased by 12.3%, of which pork increased 13.7%, beef by 18.7%, buffalo by 4%, and poultry meat by 1.74%. Poultry egg production increased by 1% compared with the year before.

Vietnam’s 2006 animal meat production is expected to reach 3,028 thousand metric tons (TMT) live weight, about 7% higher than 2005’s production (see table 2). Currently, pork still plays by far the dominant role at 81% of total livestock production. The share of poultry meat is about 11.5% and all other kinds of meat including beef, buffalo, and goat meat occupy only 7.5%. In terms of relative proportion of different meats in livestock production, post sees no big change in the next two years.

Consumption

According to the General Statistic Office of Vietnam, Vietnam's GDP for 2005 grew at the remarkable rate of 8.4%, led by gains in construction, tourism and telecommunications. GDP growth in 2006 is predicted at 8 percent according to the Asian Development Bank (ADB). The country’s economic development has had a strong influence on consumer spending. According to GSO, consumer spending and retail sales in Vietnam rose 21% in 2005. As a result, Vietnam’s per capita meat consumption is increasing as well.

Vietnames are big consumers of pork and prefer pork to chicken and beef. In the Vietnamese diet, fresh meat from recently slaughtered animals is still the favorite animal protein source. However, Vietnamese people in the cities are now also accepting frozen meat either produced domestically or imported from other countries. They are also consuming more ready-made food such as canned meat or prepared sausages. Frozen imported beef and chicken meat are used by restaurants and hotels in big cities as they are concerned about meat quality and hygiene.

In 2005, pork wholesale prices recorded an average annual increase of 21% over 2004 due primarily to the impact of bird flu which lead to sharp increases in demand for pork. However, after peaking in January - February 2006, pork prices have been dropping as the bird flu situation has improved. Last year, chicken meat prices increased about 20% over 2004 due to tight supply and renewed demand. In recent months, prices have moderated due to increased supply.

Policy

In conjunction with the Vietnam-U.S. bilateral WTO accession agreement signed this year, the Vietnamese recognized the U.S. meat and poultry food safety system as equivalent to Vietnam’s. Accordingly the Vietnamese government agreed to no longer require a HACCP certificate and Certificate of Free Sale before granting import permits for U.S. meat and poultry. The only health certification now required is the USDA Food Safety Inspection Service Export Certificate of Wholesomeness. This removes an irritant from trade as the Vietnamese requirements duplicated certifications already implicit in the Certificate of Wholesomeness

Poultry Production

Of the total poultry population, about 50 percent are raised from backyard/household farms of up to 200 birds; 25-30% are raised on what are termed commercial poultry farms of from 200 to 2,000 birds; and 18-20% are in industrial farms that can range anywhere from 2,000- 100,000 birds. The biggest poultry farms are joint ventures or wholly foreign-owned companies.

In the 3 years before avian influenza outbreaks began in late 2003, Vietnam’s poultry population’s growth rate was 8.6% per year, with the chicken population increasing by 8.3% and the duck (waterfowl) population increasing by 9.4%. However in 2004, due to the highly pathogenic avian influenza outbreak in Vietnam, the poultry population dropped 14%, and poultry meat production decreased by 15%.

However, the poultry sector stabilized in 2005 as the avian influenza situation improved. It increased by 0.08 percent in population and 1.7% in total meat production. Post expects the recovery from AI to be slow as the risk from new outbreaks remains and government measures in place to control AI will continue to inhibit growth particularly in the duck population. The duck population in 2006 is expected to decrease 7.5% to 55.5 million head.

According to the government, Vietnam has destroyed 51 million poultry since December 2003 as a result of AI outbreaks. Local producers are still hesitant to invest in this sector due to the continued risk of avian influenza. Vietnam still uses vaccination as the main control measure for HPAI.

Poultry trade

Vietnam imports significant numbers of live poultry for breeding. Due to the bird flu outbreaks in the country, the live poultry import value decreased from $3.27 million in 2002 to $2.58 million in 2003 and $1.58 million in 2004 (see table 20). However, according to the government, in 2005, Vietnam increased spending to $2.7 million for live poultry imports (about 667 thousand birds) as it began rebuilding its flock. Currently imports mainly come from the United Kingdom, the United States, France and Netherlands. Vietnam exported a small quantity of live poultry to neighboring countries such as Laos, Cambodia and Myanmar (see table 21).

In November 2005 due to bird flu outbreaks, the Vietnamese government banned imports of live birds as well as poultry products from all countries. However, after pressure from trading partners and an improved AI situation, in January 2006 the Vietnamese government lifted this ban for imports of poultry and poultry products from countries that are free from highly pathogenic Avian Influenza. As a result, in 2006 Vietnam’s imports of live poultry and poultry products have increased significantly. Despite a slight recovery of local poultry production in 2005 and 2006 due to the improvement of the bird flu situation in the country, imports of chicken meats are expected to continue to increase, particularly for use by the food processing industry.

High prices following the AI outbreak are fueling the current increasing in imports. Since recovery is expected to be slow, this attractive market should continue in the near term at least. After AI fears recede, the extent the industry can expand in the long term will determine how much imports will eventually grow. However high Vietnamese demand for offal and dark meat cuts that are relatively unpopular in the United States should continue to create opportunities for U.S. exporters particularly if progress can be made in reducing tariffs currently ranging up to 20%.