Low Chicken Prices May Lead to Shortages

VIET NAM - Many chicken breeders have incurred big financial losses due to a sharp drop in the price of chicken, and if the situation continues, farmers will scale down their production or stop breeding.
calendar icon 23 July 2012
clock icon 3 minute read

Without timely measures, there will be a shortage of chicken in the domestic market in the coming months, according to Nguyen Dang Vang, chairman of the Viet Nam Animal Breeding Association.

The price of industrially-raised chicken has dropped many times in the first half of the year, reports VNS.

Currently, chicken prices at farms is only VND19,000 a kilo, down about VND12,000 compared to a month ago.

Nguyen Thanh Phuong from Emivest Viet Nam said production costs for a kilo of chicken had risen to more than VND30,000. At current prices, the company has lost about VND11,000 for a kilo of sold chicken. Phuong said a reduction in purchasing power was the main factor behind the chicken-price drop.

If the situation does not improve in the next few weeks, the company might cut back on its breeding activities.

Many chicken farms in Dong Nai, Binh Duong and Ba Ria-Vung Tau provinces have already scaled down their breeding or suspended breeding activities. Some have begun to breed chicken for foreign companies.

According to the Binh Phuoc Chicken Breeding Association, about 50 per cent of chicken farms in the province, mostly household-size farms, have stopped breeding and want to sell their farms.

Pham Thi Tam, owner of an egg-laying hen farm in Dong Nai Province, said she had to reduce her hen herd by 40 per cent since she incurred a loss of VND200 for each sold egg.

To remedy the situation, the Viet Nam Animal Breeding Association has asked the Government to subsidise animal-feed prices, slash corporate income taxes, cut import tariffs on animal-feed materials, and offer preferential loans.

The association has also asked relevant agencies to develop measures to prevent smuggling of poultry from China in an effort to prevent prices from continuing to drop.

In addition, Nguyen Quoc Trung, general director of Japfa Viet Nam, said retail prices of chicken remained high despite a significant drop in prices at farms.

He said authorities should improve price management in the retail sector and outline measures to cut middlemen in the distribution of chicken. This would help chicken prices to become more reasonable and would stimulate consumption. /p>

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