28 March 2022

6 minute read

By: Paul Anderson

Asia

Philippines

Average live weight prices (national) seem to be on an upward trend from January to this writing. Price for the locally produced pork seemed to hold for the first three months of the year even if there is pressure coming from imported frozen pork. Farmers are aware that if farm gate prices shoot up drastically, there will be a shift in the consumption pattern favoring imports. Consumers and buyers still prefer local/fresh over imports, and this can be seen in the upward trend of culled sows. It is estimated that the farmgate price for the month of March 2022 will end at 185 PHP per kg for prime hogs and 113 PHP for cull sows.

Frozen pork inventory, both local and imported, is going down. Week 1 of March showed a figure of 51.12 mil kg vs 59.33 mil kg week 1 of February. Week 1 of March 2021 only recorded an inventory of 20.42 mil kg (NMIS report for Mar 07, 2022). The frozen pork and chicken inventories are indeed moving in these challenging times. There are also forecasts that importation will be lessened due to the unfavorable exchange rates and the higher production costs from exporting countries.

The cost of production is ever increasing due to the higher feed raw material input costs. Prices of corn, soya bean meal, wheat, fish meal, coco oil/palm oil, and other feed premixes have increased to unreasonable levels, not to mention the very high cost of fuel. The Russia-Ukraine conflict will also affect wheat importations.

The ASF Situation and Repopulation Efforts

The last hyped reported case of ASF case for the country happened in the island down south during the first weeks of January. But after that, it looks like all has calmed down. The Department of Agriculture is pushing hard in leading the repopulation efforts in Central Luzon thru their Project INSPIRE (Integrated National Swine Production Initiatives for Recovery and Expansion). The program has a budget of around 30 billion PHP. The Department of Agriculture, headed by Sec William Dar, is forging ties and linkages with the private sector as the latter has the technical expertise and the government agency will link the private sector to the needed government support to guarantee the success of these repopulation efforts. So far, hog associations and cooperatives are being evaluated by the Local Government Unit and the Department if their farms and facilities are qualified to be part of the program.

The Philippine Economy

Restrictions on human movement were slowly lifted on the second week of March so as to re-open the economy. Metro Manila was the first to open up and was moved and declared to an Alert level 1 status. By doing so, people are free to move, go to their offices attend face-to-face interaction with just face masks on. This hopefully will help jumpstart consumption and the economy.

As of the end of February 2022, the headline inflation rate stayed at 3.4% (Phil Stat Authority). This was roughly the same figure as January 2022 and is even lower than that of Feb 2021. The latest figure is slightly lower than the projections set by the Banko Sentral ng Pilipinas of 4.2%. Gasoline and diesel inflation shot up to 32.1% and 46.4% respectively. Inflation for food decelerated to 1.1%, the same held true for meat, poultry, and fish. The pork producers' move of keeping farmgate prices steady has paid off.

Thailand

Pig price in Thailand plunges as government limits stockpiling Once reaching a record of THB 120/kg (USD 3.5) in January, live pig prices in Thailand fell 30% at the end of March to THB 80/kg (USD 2.35kg) as the government has limited all the abattoirs and cold storages to stockpile their pork no more than 5000kg.

The new regulation was issued in January by the Ministry of Commerce in an attempt to curb rising pork prices. Failure to comply with the rule would lead to a heavy fine and jail time.

Even so, everyone knows that the price plunge is temporary. A massive loss of sows and commercial pigs due to African Swine Fever (ASF) remains unresolved and is even increasingly intensified as most farms that were hit by ASF are still reluctant to restock as they are waiting for the ASF vaccine to be legally available in Thailand. The Thai government is working with veterinary sc various universities to develop the vaccine.

However, a growing number of farms affected by ASF are building new units to restart their business with fresh breeding stocks. But this poses another problem as locally produced gilts are increasingly scarce. The only option is to import the gilts from countries free from ASF, Genesus has a huge GGP and GP Global production base and the ability to supply high health breeding stock to support the restocking of these farms.

Vietnam

The price of the pig now is 51,000 - 57,000 vnd/kg in the North; 52,000 – 54,000 vnd/kg in the center; and 51,000 – 55,000 vnd/kg in the South. Average will be around 54,000vnd/kg. (source)

BaF Builds New Multiplier

BaF is the Genesus partner in Vietnam. BaF is part of the famous Tan Long Group. On March 4th, BaF Vietnam Agriculture Joint Stock Company inaugurated and put into operation a pig multiplication farm with the scale of 5000 Genesus GP sows supplied from BaF’s Genesus GGP Nucleus Farm. BaF's newest unit is built using the latest and most up to date technology in Phu Yen.

BaF Vietnam Agriculture Joint Stock Company was established in 2017, and focuses on developing a strategic business model according to the 3F chain of Feed - Farm - Food in order to provide a clean food source for delicious and safe meals for consumers' health with the slogan: “IMPROVE QUALITY OF LIFE”.

BaF Vietnam strives to reach the Top 3 breeding and food processing companies in Vietnam. According to Mr. Truong Sy Ba, Chairman of Tan Long group: BaF's goal by 2025 is a total output of 65,000 PS sows that will allow the processing of 2,500,000 fatteners per year. It is expected that by 2030, the total sow herd will reach 200,000 PS sows, processing 6,000,000 market hogs per year.

Price for piglets half than a year ago

From January to June 2021, price of piglets stayed at over 2.4 million VND/head ($105 US). As market hog prices went down, demand for piglets plunged with prices dropping to 1.4-1.6 million VND/head (61¢ US) by August-September 2021. Currently, the price for piglets remains at 1.1-1.3 million VND/head (52¢ US). (source)

Vietnamese large feed production companies asked to temporarily freeze prices.

At an online conference to discuss solutions to promote the development of pig farming and strengthen the management of animal feed production and business activities on the morning of March 18, Deputy Minister of Agriculture and Rural Development Phung Duc Tien suggested that large feed production companies should temporarily freeze the price on animal feed. (source)

In the contex of much nedeed large imports of feed, Mr. Nguyen Van Khanh, Deputy Director of Hoa Phat Livestock Development Joint Stock Company, also asked the Ministry of Agriculture and Rural Development to consider the proposal of reducing import tax at a better rate. (source)