Consumers begin to feel pork pinch

December 12, 2019 | 17:26
The continuous price rise for Vietnam’s most favourite type of meat over the last few months, caused by the recent African swine fever outbreak, puts pressure on businesses and consumers alike, while simultaneously contributing to the increase of the consumer price index for 2019. Kim Thy reports.
consumers begin to feel pork pinch
With the price of pork soaring, consumers begin to look for alternatives such as poultry, beef, and seafood (Photo: Le Toan)

Since early November, the price of pork has been increasing rapidly. In some provinces, the price of live pigs has hit a record of VND80,000 ($3.45) per kilogramme, an almost 170 per cent increase in just six months.

The record tally has already pushed the price of pork in wet markets across the country up to VND170,000 ($7.40) per kilogramme. The price of other foodstuff made from pork, such as Vietnamese sausages, has also hiked up to VND40,000 ($1.70) per kilogramme.

In some shops and restaurants in Hanoi, the rise has led to increases of up to VND10,000 ($0.40) per dish. Last week, Duong Thu Ha, a bank officer in the centre of the capital, was surprised at the increased fee of the noodles with pork that she usually has for lunch.

“They used to charge me VND35,000 ($1.50), but now a dish can be either VND10,000 more expensive or if it has the same price, it comes with a much smaller serving of meat,” said Ha.

It is a common situation at most restaurants in the big cities, with the price of meals such as noodles with grilled pork, doner kebabs, and bread with pate and sausages rising by around 50-75 per cent.

Shop owners said that they had no option but to raise prices for pork dishes so as to not suffer losses. In the past, they bought wholesale at VND70,000-90,000 ($3-$4) per kilogramme, which has now been bumped up to VND130,000-160,000 ($5.50-$7). Despite the fear of losing customers, they still decided to raise the price of their menu options.

Although the price of pork has gone up, most families cannot give it up and replace it with other meat to save money. Tuyet Mai, an accountant living in Hanoi’s Hoan Kiem district said her family usually eats bacon and ribs, which are the most expensive parts of a pig, priced at around VND170,000 ($7.40) currently.

With her family eating bacon four days a week, costs previously hit around VND2.5 million ($110) per month, but now she sees an additional VND1 million ($43.50) added on top of that. “Despite the expensive pork, I still buy it for our meals to complement fish and chicken. However, the price of other meat is also increasing, so I have to spend more on guaranteeing nutrition in our meals,” said Mai.

Recently, other meat like goose, duck, and beef have also increased prices by up to VND10,000 ($0.45) per kilogramme. Furthermore, the price of chicken has risen to VND120,000 ($5.20) from around VND80,000 ($3.50).

While the basic wage has only increased by VND100,000 a month, workers’ salary is not rising as fast as food prices, some of which have nearly doubled. “We should become vegetarians, which is healthy and may save money,” bemoaned Truong Duc Trung, a state employee.

consumers begin to feel pork pinch

Nudge of CPI

The price of pork has been affected by African swine fever (ASF) sweeping across the country, causing massive losses to livestock. This was exacerbated by speculative stockpiling, which pumped up pork prices in November by 18.5 per cent against October.

The consecutive increase of essential meats contributed to pushing Vietnam’s consumer price index (CPI) in recnt months. In November, the CPI increased by 0.96 per cent against October – the highest rate in the last nine years, driven by soaring pork and fuel prices, according to data from the General Statistics Office.

The fast increase of CPI in November was forecast several months ago when ASF had expanded to almost every city and province in the country. According to expert projections, the complicated movement of ASF will continue to affect the price of pork and the impact on CPI will last until the early months of 2020.

Nguyen Xuan Duong, acting director of the Department of Livestock Production of the Ministry of Agriculture and Rural Development (MARD), said, “As of November 25, ASF has appeared in 8,533 communes and 166 districts of 63 cities and provinces, causing the death and culling of 5.9 million pigs with total weight exceeding 330,000 tonnes. About 4,823 previously affected communes have now gone 30 days without another outbreak. However, in November, 146 communes suffered from the disease again. Disease control is strong but the problem has not ceased.”

Regarding the Ministry of Industry and Trade (MoIT), Deputy Minister Do Thang Hai reaffirmed that pork is an essential good on the Lunar New Year, and thus if supplies are not ensured, it will not only impact the CPI but also the lives of people.

To address customers fears over rising prices, the MoIT is working to create stability for the pork market. Responding to the ministry's initiative, supermarkets such as Co.opmart Nha Trang, Big C Nha Trang, and Lotte Mart have implemented programmes to sell pork at a stable price to consumers. Specifically, Co.opmart in Nha Trang sells pork at prices lower than 10 per cent compared to traditional markets. Meanwhile, Big C in the same city currently sells pork products at prices equal to previous months, simultaneously implementing the price-locking programme in the latter months of the year for essential consumer goods, including pork.

Passing the buck

According to the MARD, in the first ten months of this year, total pork imports reached 54,000 tonnes, more than the full annual figures for the 2016-2018 period.

“The ministry proposed the prime minister to assign the Ministry of Industry and Trade (MoIT) to be in charge of keeping the price of pork stable in the time coming,” Deputy Minister of Agriculture and Rural Development Phung Duc Tien said, gliding over the MARD's tasks of preventing the spread of ASF and supporting farming companies to repopulate herds and instead discussing the tasks of another body.

“The MoIT is building plans to increase pork imports from countries with which it has bilateral trade relations in the segment to offset the existing lack,” he continued.

However, increased imports would have an adverse effect on repopulating domestic pig herds – an initiative the MARD is implementing at the moment.

The MARD plays a crucial role in organising a plentiful supply of pork – which would go a long way in price management. However, with the ASF still at large and repopulation efforts coming far too late – there are only two months left until the Lunar New Year, while pigs need five-six months to grow – the ministry's meddling in the affairs of others can be seen as little more than shifting the burden.

Nguyen Anh Duc - Deputy general director Saigon Co.op

The consecutive soar of price and storage of pork mainly occurs from traditional and wet markets – small alleyway markets that often change position – due to the unstable supplies.

For supermarket chains, the purchasing power has increased but the price of pork stays at a stable level because almost all chains have built stable supplies via long-term contracts with large-scale livestock companies and food processing facilities. This move avoids the storage of pork and ensures a consistent volume with a stable selling price for customers.

This is especially important during the Lunar New Year when the demand for meat will spike. Saigon Co.op’s supermarket chains are selling an average of 40-50 tonnes pork per day and these figures are expected to increase by 30-40 per cent during the festive season.

Thus, the company is negotiating with partners such as Vissan, Anh Hoang Thy, and Meat Ha Nam to reserve 3,500-4,000 tonnes of pork for Lunar New Year and onwards during the early months of 2020.

Besides that, the company will offer pork which is preserved by cooling technology meeting European standards as well as other kinds of meat, seafood, or different replacements to diversify foods for customers.

Vu Anh Tuan - Deputy general director C.P. Vietnam

In order to prevent disease in general, C.P. Vietnam has already provided the MARD and farmers with a lot of supplies and equipment for prevention, such as disinfectants, and quick test kits valued at hundreds of thousands of dollars.

Although the farming features of every country are different, disinfection, sterilisation, slaughter, and breeding being ensured to clean up diseases before selling still play the most important role in preventing them.

In Thailand, all the border gates are set up by disinfection stations, which are aided by the private sector, including C.P. Group. Thereby, the experiences of Thailand and China confirm that the establishment of national disease control stations is extremely important and C.P .is willing to exercise this task.

Additionally, C.P. Vietnam proposed the MARD to facilitate new farms in new areas, which are enough large and far from residents for big businesses to re-herd and develop a sustainable farming industry.

Do Hoang Long - Development and sales manager Japfa Comfeed Vietnam Ltd.

In order to deal with the storage of pork as well as price manipulation, one of the most urgent solutions is to prevent the export of pork under illegal methods.

In the local market, livestock companies will have to strictly control the disease from breeding to slaughtering stages in order to limit penetration of disease to ensure stable supply for the market because almost all of the small farms have run out of pigs.

Both large-scale outsourcing and small farms have to pays attention to the philosophy of safety in order to thoroughly prevent the pathogenesis.

At Japfa, along with these recommendations, the company is increasing the development of poultry farms in the areas where disease is rampant, including Chuong My district in Hanoi in order to limit the risk of re-populating herds in the infected area.

Vu Khac Tuan - Director, Dai Phuc Services and Trading General Ltd.

Though our main food supply is from long-term suppliers and a few new partners, the price of pork input has increased by nearly 50 per cent compared to several months ago.

The soaring price of pork has also led to an increase in the price of many other foods, which makes it critically difficult for us to prepare industrial meals, forcing us to increase the price of meals and cut down pork dishes or add more of the other types of protein such as beans, tofu, peanuts, fish, chicken, and beef.

However, we still have to propose to our customers to increase the price by 10 per cent for each portion, so we can reduce part of the burden but still ensure nutrition in the diet of the staff.

It is fortunate that our clients can understand the current situation and sympathise with us as we move forward.

In fact, the government has made moves in this regard, and adjusted increase imports of pork products to balance supply and demand, as well as to offset the domestic pork shortage and control CPI.

We hope that in the coming time, the price of pork and other food products will soon stabilise so that businesses like us can provide proper meals to customers at reasonable prices, and both sides are not stuck in a burden.

Nguyen Quynh Anh - Marketing director ORFARM

Thanks to the full application of Japan’s environmentally-friendly effective microorganism technology, all pigs of our organic farms are safe and completely unaffected by the deadly outbreak of African swine fever, even though our farm lies directly within the infected area.

We have also strengthened our epidemic control measures, such as inviting Japanese experts to advise on prevention of the epidemic and counter any possible risks of infection.

Therefore, ORFARM still ensures a supply of safe and delicious food for customers during the upcoming Lunar New Year holiday but the prices remain stable and do not increase following the market trends.

Due to the impact of the epidemic, customers are worried about the quality of the meat sold outside, so they tend to look for brands that have stable prices and clear commitments to quality and product origin.

Ha Van Huong – Owner Hong Ha Vien restaurant

It is true that the epidemic is causing the price of pork to rise sharply, which has a significant effect on the operation of restaurants, including ours.

However, we accept to compensate for losses in this period to ensure the prices and business activities of the restaurant remain stable.

The price of dishes at the restaurant have not been increased, and we also use no alternatives to replace pork-based dishes with chicken or beef because the prices of these types of meat are also higher than before.

In addition, building a menu is not easy and changing the menu or leaving some dishes out of it is even more difficult. Of course, the restaurant cannot compensate for the loss forever, so if the price of raw materials continues to rise next year, we will increase prices. This plan must have specific announcements and roadmap to limit the effect on our customers.

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