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Vietnam - The growing shortfall in Vietnam’s domestic supply of pork: Significance and policy implications

Following Vietnam’s market reforms, its domestic production and per capita consumption of pork have risen substantially. Vietnamese demand for pork has risen due to higher incomes, an increasing population and growing urbanization. Vietnam’s increased pork supply occurred because of an increase in its stock of pigs and greater pork yields, the relative importance of which has varied.
22 November 2010
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Following Vietnam’s market reforms, its domestic production and per capita consumption of pork have risen substantially. Vietnamese demand for pork has risen due to higher incomes, an increasing population and growing urbanization. Vietnam’s increased pork supply occurred because of an increase in its stock of pigs and greater pork yields, the relative importance of which has varied. However, at least since 2000, Vietnam’s domestic supply of pork has grown more slowly than its demand for pork and there has been a substantial risk in the real price of pork. This has happened because Vietnamese consumers have strong and persistent preference for fresh (warm) pork and, therefore, most avoid imported pork. There are natural barriers to pork imports and so the rise in pork prices has not been moderated by imports.

Given the importance of pork in the Vietnamese diet, this trend is of concern to the Government of Vietnam. Some policymakers think that the main problem is the inefficiency of small household suppliers of pigs and believe the answer to the problem is to expand production by larger-sized commercial producers. However, at this stage in Vietnam’s development, small household producers still make an important contribution to Vietnam’s supply of pork, accounting for at least 70% of supply. In many cases, their costs of production are lower than can be achieved by larger commercial producers because they utilize inputs that otherwise may be unused or under-utilized. They are also much less reliant on imported pig food than are large commercial producers.
In the current situation, ways should be explored to reduce the cost of production for both household and non-household producers. Attention should be given, for example, to increasing the supply and reducing the cost of domestically produced pig food and utilizing available supplies more efficiently.

http://mahider.ilri.org/bitstream/10568/2466/1/Pork_Supply_Research_brief.pdf

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