Despite its potential in livestock, Vietnam still cannot export its meat products.
Mr Tran Tan An, Deputy General Director of Vissan, one of the leading producing and processing foodstuff companies in Vietnam, said that outside of traditional markets like Singapore, North America, Australia, South Korea and Russia, with tiny profits, Vissan has difficulties discovering new markets.
Only export through side gates
Among many products supplied to the markets like frozen meat, processed meat, sausages, grilled chopped meat, meat pie, canned meat, only some specific products like grilled chopped meat, meat pie are able to be exported to potential markets like Russia, America, Australia, etc. The remaining, potential products of Vissan like sausages and canned meat, are only exported to regional markets with high demand like Cambodia and Myanmar. Especially, many products of Vissan are now just discovering the markets, for example canned meat only penetrates Myanmar.
While proportion of revenues of Vissan and other Vietnamese processing foodstuff companies to foreign countries are still low, companies which supply raw materials for them must export in a minor way, through side gates and land border crossings. For two consecutive years, Duy Cuong (Dong Nai province) livestock breeding company’s products are 20 – 30 percent more than what it can export in a major way. Because of that, its excess inventory is exported to the Chinese market.
Current statistics is not officially published, but the amount of meat products exported to China in the minor way annually account for about one percent of total domestically produced meat, with about 35,000 tonnes and low export value.
Restriction from production scale
The industry is mainly depending on household scale breeding (about 7 million households) that supply about 90 percent of the meat in the markets, their small scale, scattered and spontaneous operations have largely influenced products’ quality. Meanwhile, there are only a small number of large scale enterprises with appropriate human resource to produce in a closed process and create high quality products in compliance with requirements of importing countries, therefore they could hardly meet requirements of food safety and sanitation. Consequently, most breeding products for export of Vietnam find it difficult to access international markets.
Dr Dang Kim Son, Director General of the Institute of Policy and Strategy for Agriculture and Rural Development, said that unclosed production process and separate value chain have caused low prices. No enterprise could handle the entire process comprehensively, from breed choosing, animal food, production, processing, etc. Simply calculated, it costs about US$600 million to construct a farm with about 1.5 million pigs. If compared to US meat price, Vietnam meat price is 1.4 times higher. If produced in a system, Vietnam meat price could reduce about 15 percent, but is still 1.25 higher than that of US meat, therefore Vietnam enterprises face many obstacles when competing with international products.
Also according to the expert, while the meat products of Vietnam have high price and low productivity, current policies have not created favourable conditions for export. Vietnam has not participated fully in agreements related to foodstuffs for export or import, whereas veterinary and sanitation issues attract little attention, therefore products do not meet requirements. In fact, although Vietnam has joined in WTO for a long time, legal conditions and relevant criteria have not been fully constructed and enterprises do not have the foundation to develop and invest comprehensively.
Nguyen Thanh
Confining Export of Livestock Products Related image(s)
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