Pork price crisis - Pork should be included in commodity price stabilization
VCN- Talking to Customs Newspaper, agricultural expert Hoang Trong Thuy emphasized that the pork price is only resolved by the market and cannot be decided by administrative orders. The key is still to resolve the supply chain.
Agricultural expert Hoang Trong Thuy
Pig farming and pork price have initially shown signs of crisis. In 2017 to 2018, the lowest price of pig was VND15,000/kg of live weight with rejection pigs, while the average was VND26,000-28,000/kg. Recently, the highest price of pigs reached VND90,000/kg. Within a short time, the price of live pigs quadrupled.
When pig prices go up, supply is a big problem. In 2018 and early 2019 before the African swine fever, the country's total swine population was about 37-38 million. Thus, pork production is about 3.8-4 million tons. Pigs in farming areas account for 48%, and in households 52%. Currently, the entire supply in areas of serious decline, only concentrated on the farms of large corporations.
If the supply is insufficient, the price of pigs increases. Recently, the Prime Minister has repeatedly called for bringing the price of pigs to VND60,000-70,000/kg but could not do it immediately.
Regarding the supply issue, it must be added that the Ministry of Agriculture and Rural Development does not know the total number of pigs. It is necessary to know how many pigs are less than 30kg, how many pigs are 30-60kg and how many pigs are 60kg or more, from which a suitable calculation, such as how much pork must be imported is suitable.
Meanwhile, large corporations are relatively good at this problem. They work and compete for the market. Currently, there are large livestock enterprises in the market, they reposition products and compete with each other. Product positioning means businesses will determine where their products are standing, selecting products that have an advantage in the market.
Since April 1, 15 large livestock enterprises have unanimously brought the price of live pigs to VND70,000/kg. Recently, the Ministry of Agriculture and Rural Development also has a written request for pig farms, families and pig households to reduce their prices to VND70,000/kg live pigs at the same time. However, the current price of pork on the market is assessed to remain high. It seems that this somewhat imperative administrative method has not really worked as expected, sir?
It must be affirmed that the Government and all ministries and agencies have made great efforts to bring down pig prices. However, the way to bring prices down in the recommended way is to escape the market economy and market rules. That is why the offer, request many times but the price is not reduced as expected.
The method of taking quantity and price cannot pull the price of pig down. Specifically, in terms of weight overruns, the management agency assessed the wrong supply, boosted pork imports to compensate, but because the supply was too deep, meat imports did not solve the big problem.
The method of using a price of frozen imported pork is cheaper than raw meat. Because of this fact, frozen pork is only consumed in urban, non-agricultural areas, there are still many regions, especially in rural areas, that still prefer hot and fresh meat.
It must be added that, although large corporations and animal husbandry enterprises have committed to bringing the price of pigs down to VND70,000/kg, the inspection and supervision is still open. Many abattoirs believe that they can only buy a few dozen pigs at that price.
In fact, the pig price problem can be solved only by the market, unable to issue administrative orders to intervene. The state cannot intervene deeply in this matter.
The Ministry of Agriculture and Rural Development has affirmed many times with the ability to rebuild as now until the end of the second quarter and the beginning of the third quarter to be able to balance the supply and demand of pork and gradually bring the price of pigs down to VND60,000-65,000/kg. In your opinion, is this possible?
I think that this year, bringing the price of live pigs down to VND60,000/kg is impossible. The price of pigs from now to the third quarter is expected to remain at an average of about VND75,000/kg if determined. Since the third quarter, bringing the price of pigs to VND68,000-72,000/kg has been a great expectation.
Considering the fact that pork has set a new price level, it is impossible to dream of returning to the price it was before African pig fever. Accepting this new price level can encourage people to re-grow.
Some suggested that in order to ensure stable supply-demand and control of pig prices, pork should be included in the commodity price stabilization category. What is your view on this issue?
I completely agree with this view. China also put pork in the area of ??price stabilization with reserves, so it is possible to ensure the average pork supply of about three months if taken from the stockpile, contributing to stabilizing the price of pork. When the product is put into price stabilization, there is a state reserve, and encourages organizations to develop a system of cold storage and freezing. When the price of pigs is volatile, prices may be adjusted in each region.
Vietnam should deploy in such a direction. However, if you want to do that, the first thing is to have a sufficient storage system, data, avoid speculation, and avoid group benefits. Once the data system has been established, it is necessary to have a system of strict legal provisions, tightening discipline for implementation.
I also want to share more that want to solve the root of the problem of having to rethink the pig and pork industry. The livestock industry and pork price have shown signs of crisis, requiring drastic measures, policies and sanctions to change the situation.
The awareness of this change in thinking must originate from ministries such as Industry and Trade, Agriculture and Rural Development, identify and clarify this crisis problem, and then propose and advise the Government to make the fit policies and measures.