Low-cost chicken imports inhibit domestic products

Low-cost chicken imports brought down the prices heavily in southern Vietnam

On average, each kilogramme of frozen chicken (wings and drumsticks) imported to Vietnam is sold for VND19,500-20,000 ($0.85-0.87, excluding import duty, value-added tax, and cold storage preservation). This is one of the reasons behind the declining price of chicken.

Vietnam imports various types of chicken from countries such as the US, which accounts for 61.8 per cent of total imports, followed by Brazil (13.1 per cent), and South Korea (12.3 per cent).

Notably, imported chicken usually comes in two main categories, whole frozen chicken and chopped frozen chicken (HS code 020712 and HS code 020714) accounting for 98 per cent of the total import turnover. Chicken drumsticks accounted for the largest proportion of imports (71.5 per cent), followed by chicken legs (8.7 per cent), whole chicken (8.2 per cent), chicken wings (5.8 per cent), and other parts (5.8 per cent).

Chicken imports increased between April and June 2019 against the corresponding months a year prior, but have been decreasing gradually since June.

The average import price in the first eight months was $850 per tonne (equivalent to $0.85-0.87 per kg), excluding import duty, value-added tax, or cold storage preservation.

The increase in cheap chicken imports has impacted domestic chicken farmers heavily. For example, in the northern provinces, in the middle of September 2019, the price of chicken was VND37,000-39,000 per kg ($1.6-1.7), down 3 per cent compared to the same period in 2018. Generally, prices remained stable, with only a slight 3-5 per cent decrease compared to the same period in 2018.

However, in the southern provinces that are home to large poultry and cattle farms, as of mid-September, prices were down 35-40 per cent on-year, to VND16,000-18,000 per kg ($0.7-0.8).

Nguyen Thanh Son, chairman of the Vietnam Poultry Association (VIPA), said that the sudden growth of imports in the first nine months was one of the reasons domestic chicken producers are having difficulties.

In addition, according to Son, prices decreased partly because of the changing farming structure caused by the African swine fever. With the virus raging over the country, many farms have switched from pigs to chicken, causing a sharp increase in supply.