Exporting livestock products: Why is the added value low?

	Output and export value of livestock products to increase rapidly
	Export of livestock products expects a lot from "leading" enterprises

The processing scale is only 1.3 million tons/year, accounting for 20-22% of the world production of pork. Photo: Thu Diu

Export value reached US$ 232 million in the first 6 months

According to a report by the Ministry of Agriculture and Rural Development, in Vietnam, the livestock industry contributed nearly 27% of the agricultural GDP. Products of the livestock industry not only met the food consumption demand of nearly 100 million domestic people and international tourists, but also contributed to the goal of export. In the first 6 months of this year, the export value of livestock products reached US$ 232 million, up 26.5% over the same period last year. For pork, the main export product was frozen suckling pork with more than 19,000 tons, worth over US$ 18.4 million, up 103% in volume and 117% in value over the same period in 2022. Hong Kong (China) was Vietnam's largest frozen suckling pork export market, with exports increasing 13% in volume and 43.6% in value over the same period in 2022. In addition, Vietnamese fresh, chilled or frozen pork was also being exported to the markets of Papua New Guinea, Laos and Malaysia. As for live pigs, in 2022, Vietnam exported 21,560 heads, but in the first 6 months of this year, only 6,833 pigs were exported.

According to Mr. Le Thanh Hoa, Deputy Director of the Bureau of Quality, Processing and Market Development of Vietnamese agricultural products (Ministry of Agriculture and Rural Development), in 2023, China was the market with the largest pork demand, it was expected to increase 1.1%, reaching 56 million tons (accounting for 48.8% of the world), this country had an import demand of about 2.3 million tons (up 8%). EU was the largest pork exporting region, the output was expected to be 21.7 million tons (down 2.8%); exports reached 3.7 million tons (down 11.3%) and imports were estimated at 100,000 tons (down 17.4%).

In terms of quantity, Mr. Duong Tat Thang, Director of the Department of Livestock Production, said that by the end of 2022, Vietnam was known as the country with the pig farming industry ranked 5th in terms of head and 6th in terms of meat production in the world. In recent years, the growth of Vietnam's pig herd had had great fluctuations in terms of total herd and output. According to the General Statistics Office, it was estimated that the total pig herd of the whole country was about 25 million heads by the end of 2022; as of the end of June 2023 increased by about 2.5% compared to the same period in 2022. The growth rate of the pig herd in the months of 2023 was lower than that of 2022 at the same time. Output of live pigs for slaughter was estimated at 2.3 million tons, up 6.5% over the same period in 2022.

Pig farming is also shifting strongly in the trend of reducing small-scale households, increasing professional and large-scale farms. In the period of 2019 - 2022, the small scale livestock production of households decreased by 15-20%. Along with that, pig production in smallholder farmers decreased to 35-40%, professional households and farms accounted for 60-65%. According to Mr. Duong Tat Thang, statistics in the period of 2020 - 2023, the structure of livestock herds in Vietnam was distributed, including: Pig raising accounted for 60-64%; poultry raising accounted for 28 - 29%; buffalo, cow, goat, sheep raising accounted for 9%. “Meanwhile, in terms of the structure of world meat production in this period, pork accounts for 41%, poultry meat 37% and buffalo and cow meat 22%. Thus, Vietnam's pork structure is about 20% higher than the world average", according to the report of the Department of Livestock Production.

“Importing food in want”

There is great potential for pork. According to Mr. Le Thanh Hoa, Vietnam has 67 industrial-scale processing factories, high value-added products such as canned goods, smoked, sausages... reaching 15 - 20%; processing by-products after slaughtering such as bone broth and animal feed has been invested, but the processing scale is only 1.3 million tons/year, accounting for 20-22% of the output of slaughtered pigs. In order to expand the meat export market, it is necessary to strongly develop processing plants, and products must meet international standards.

In particular, one of the main reasons leading to the situation of producing a lot but "exporting not much", unable to compete with the world of the pig industry was pointed out by Deputy Minister of Agriculture and Rural Development Phung Duc. Tien that Vietnam still “imported animal feed in want”, while animal feed accounted for 65% of production costs.

In order to export pork, Deputy Minister Phung Duc Tien said that one of the current requirements was to be independent and self-reliant in the source of raw materials for domestic animal feed production, reduce dependence on imported sources. This is also the goal set by the Prime Minister for the Ministry of Agriculture and Rural Development. Currently, Vietnam has about 800,000 hectares that can be converted to corn, soybean... to have raw materials for industrial animal feed production. The Ministry of Agriculture and Rural Development has signed with a number of enterprises to deploy the construction of raw material areas for animal feed production in the Central Highlands. As for the breeding areas meeting biosafety standards, in order to have meat products for export according to the regulations of the World Organization for Animal Health, the Ministry of Agriculture and Rural Development is coordinating with localities to build in the Southeast. Ministry, because this is a large-scale concentrated breeding area.

Enterprises also need to invest in deep processing to bring the livestock industry to the world. Building disease-free zones, associated with processing factories, and chains to have areas of raw materials for export.

According to Deputy Director of the Bureau of Quality, Processing and Market Development of Vietnam's agricultural products, disease control was one of the core principles in livestock and poultry exports and it was also content in negotiating free trade agreements and the Agreement on the application of food hygiene and safety and phytosanitary measures of the WTO (SPS Agreement) between Vietnam and other countries. Therefore, it is necessary to clearly define policies to increase output, improve quality to meet standards (grade, form, food safety...), distribution and consumption channels; organize close linkage between production, import and retail system, ensuring harmony of benefits among stages. At the same time, well organize the distribution system, shorten the supply chains (from production to retail, reduce intermediaries); effective market control, anti-smuggling, trade fraud, tax evasion in direct sales and online sales, further promoting the role of wholesalers, retailers, and consumer protection associations Vietnam.