The total production value of the livestock industry in 2022 was estimated at over 506 trillion VND, up 5.5 per cent over the figure in 2021. (Photo: nhachannuoi.vn) After nearly three years of persisting with a zero-COVID policy, China haseased quarantine measures and reopened its borders from January 8.
The gradual easing of disease restrictions by the world's second-largesteconomy will affect the economies of the ASEAN region, especially Vietnam,China's largest trading partner in the ASEAN bloc since 2016, according to theAgribank Securities Co (Agriseco).
At present, Vietnam is under negotiation to get permission for official exportsof pork to China.
Saigon Securities Incorporation (SSI) experts forecast that cross-border tradewill support hog prices in 2023. Pork exports through official channel from Vietnamto China could also enjoy this advantage.
Commercial farms developed under the 3F model (Feed-Farm-Food) will be the mainbeneficiaries of the permission for the official export of pork to China.
However, it is necessary to meet many regulations related to origintraceability and food safety before asking permission to export.
Analysts at VNDirect Securities Joint Stock Company also said that thedifficulties of pork producers would ease from 2023, thanks to the forecastedpork price increase of 5% when the demand for eating outside recovers.
In addition, grain prices are likely to decrease as exporting countriesincrease supply and Ukraine's grain products are transported again after havingan agreement ending the blockage of the country's ports and reduction infertiliser prices.
According to VNDirect, domestic animal feed prices will decrease gradually in2023.
Another factor supporting pig farming and processing enterprises is an increasein consumption demand when consumers' real income increases. Meanwhile, thenumber of international tourists this year is expected to grow at a rate of 84%in the second quarter and 100% in the fourth quarter, creating a strongrecovery of entertainment, accommodation and catering services.
Experts from VNDirect believe that the pig farming and processing enterpriseswill record revenue growth this year. These businesses will likely see arecovery in the growth rates of gross profit, such as Dabaco Vietnam GroupJoint Stock Company (Dabaco), Masan Joint Stock Company, BaF Vietnam AgricultureJoint Stock Company, and Hoang Anh Gia Lai Group Joint Stock Company.
However, the pig farming enterprises still face a risk of increasing globalgrain prices again due to the prolonged tension between Russia and Ukraine thatmay affect commodity shipping activities in the Black Sea.
Vietnam imports about 80% of input materials for animal feed production, so theincrease in the USD/VNĐ exchange rate also leads to the higher production costof animal feed.
The outbreak of African swine fever has not been controlled completely at allhousehold farms. However, it will not affect the total pork supply because theoutbreak is not as severe as it was in the past and vaccination for pigs isexpected to begin in 2023 upon completion of the pilot phase.
Nguyen Quoc Dat, vice chairman of the Vietnam Livestock Association, said thatin 2022, the livestock industry faced many difficulties. However, the livestocksector's supply for the end of 2022 was relatively stable.
The price of poultry products tends to decrease due to abundant supply, whilethe demand of the food is still quite weak at restaurants, collective kitchensand schools.
Every year, the demand for pork will increase sharply because processingcompanies promote purchasing pork to process goods for Tet (Lunar New Year).That makes the price of hogs increase gradually from the second half ofNovember to before the Lunar New Year. However, hog and pork prices in 2022were quite dismal as demand did not seem to increase.
It was forecast that the demand for food during the Lunar New Year 2023 woulddecrease compared to previous years. It was partly due to weakening consumptionamid high inflation.
Duong Tat Thang, director of the Department of Livestock Production, said thetotal production value of the livestock industry in 2022 was estimated at over 506trillion VND, up 5.5% over the figure in 2021.
Of which, the total output of live hogs in 2022 was estimated at seven milliontonnes, the highest ever. The industry produced about 18.4 billion eggs and 1.1million tonnes of milk.
According to SSI, the live hog price remained stable in the first half of 2022at an average of 55,000 VND per kilo, down 25% over the same period.
Then, it increased significantly to 70,000 VND per kilo in July and August. Thesharp increase in prices was due to a recovery in the cross-border tradeactivities of live hogs from Vietnam to China.
However, this increase was for a short time, and the live hog price fell to 53,000VND per kilo because China applied stricter restrictions on border tradeactivities under its COVID-19 control policy.
While the price of raw materials peaked in the second quarter of 2022 with anincrease of 17% on year for corn, 60% for wheat and 10% for soybean. However,these raw material prices reduced from the peak in the third and fourthquarters of 2022.
Therefore, feed production cost increased by 38% year-on-year and even doubledthe cost in 2020, significantly impacting household farms and commercial farmsbecause feed accounts for 75% of total livestock cost.
The average production cost of the household farm was estimated at 55,000-60,000VND per kilo of pig, while the average production cost of the commercial farmwas estimated at 50,000 VND.
With the prices, farmers were hardly profitable, while commercial farms alsosaw much lower profits than that in previous years.
The commercial farms' profit stands at the lowest rate in five years./.
VNA
