Increasing pork prices in China a magnet for Vietnamese traders

Tam, who buys pork in the south, said his exports to China have increased in the last two months, and fetch a margin of VND500,000-1 million ($22-43) per pig. “Prices are high in China because it stopped buying from the U.S.”

Nguyen Kim Doan, deputy chairman of the Dong Nai Breeding Association, said traders are selling Vietnamese pork to China because of the large gaps in prices in the two countries.

Pork costs CNY26.67 ($3.7) in China and just VND50,000 ($2.2) in Vietnam, a 43 percent difference.

China, the world’s top pork consuming nation, earlier this month canceled orders to buy 14,700 tonnes of U.S. pork as the trade war between the two largest economies continued. Industry insiders have forecast prices in China to increase by 70 percent from last year in the coming months.

In Vietnam, they have risen by up to 28 percent to VND50,000 ($2.2) in the north and VND40,000 ($1.7) in the south since supply has been falling after African swine fever swept the country.

Some 4.7 million pigs have been culled since the disease was first detected in February this year.

Producers are reluctant to return to the business after having to cull infected animals, the Department of Processing and Market Development of Agriculture Products said.

It estimated prices to rise further, especially during Lunar New Year Festival (Tet) next January.

Vietnam could face a shortage of 500,000 tons in the second half of this year, or 20 percent of demand, according to market research firm Ipsos Business Consulting.

In January-August the country exported $449 million worth of meat, up 3.6 percent year-on-year from 2018, mostly because of the rise in pork exports to China.

All provinces and cities have reported the disease, which does not pose a risk to humans but is fatal to pigs.

Pork accounts for three-quarters of meat consumption in Vietnam, a country of 95 million.

African swine fever was first detected in Asia last year in China, the world’s largest pork producer. Half of its breeding pigs have died or been slaughtered because of the disease, twice as many as officially reported.