International Egg and Poultry Review

US - By the USDA's Agricultural Marketing Service (AMS). This is a weekly report looking at international developments concerning the poultry industry. This week's report covers the poultry situation and outlook in Viet Nam.

22 October 2008

3 minute read

North America

Viet Nam

In an effort to reduce inflation, in August 2007 the Government of Vietnam reduced tariffs on a broad range of key agricultural commodities by an average of 30 – 60% from the current rates. Tariffs on poultry meat were cut from 40% to 12%, and tariffs on eggs fell from 80% to 20%. Vietnam’s World Trade Organization (WTO) commitments only require Vietnam to cut tariffs on poultry meat to 15% by 2012.

The low tariffs led to an increase in broiler meat imports. Meat consumption is rising in Vietnam and Vietnamese favor dark-meat chicken, such as leg quarters, drums and wings. U.S. poultry exports to Vietnam increased over 407% in 2007 and exports for the first half of 2008 are already double that of 2007.

Local poultry breeders are struggling with a combination of soaring feed prices, animals lost to disease, and increased competition from imported product made local production unprofitable.

The Ministry of Finance released Decision 83/2008/QD-BTC on October 3, to take effect after 15 days from the date of the report, annulling the tax rate cut incentives for selected items. For poultry, the new rates range from 15% to 40%. The Ministry of Agriculture and Rural Development (MARD) said the new duties do not contradict Vietnam’s WTO commitments since the country has reduced the tariffs on this products ahead of schedule. The deputy head of the Agricultural Ministry’s breeding department said the increased rates will help protect the domestic industry, but breeders must improve production processes and cut costs.

Vietnam’s broiler production totaled 344,000 MT in 2006 and is expected to remain unchanged through 2009. Imports grew from 29,000 MT in 2006 to an estimated 275,000 million in 2008, but should fall 9% in 2009 due to the higher tariffs, among other reasons.

Vietnam has a tariff rate quota for shell eggs. For tariff items 04070091, 04070092 and 04070099 (hens/ducks/others) the initial quota quantity is 30,000 dozen, and the in-quota rate is 40%. Annual growth rate for the quota volume is 5%. For January through August 2008, the U.S. exported 17.4 metric tons of dried egg albumin valued at $52,000 and 8,625 dozen hatching eggs valued at $25,000 to Vietnam.