Demand for different pig breed types, what do we need to know?
Nga Nguyen, Vietnam National University of Agriculture
Stakeholder Workshop:
Assessing Competitiveness of Smallholder Pig Farming in the Changing
Landscape of northwest Vietnam, Hanoi, 30 May 2017

Pig meat is and will remain the most
important meat in Vietnam
Demand continues to grow, providing market opportunities for
entrepreneurs
• Pork most important meat for Vietnamese consumers
• Demand growing at higher rate than previously predicted: per capita
consumption of pork is now 25 kg, higher than projected level in 2015
Source: IFPRI Impact Model (unpublished estimates)
Source: Computed from VHLSS data (2010)
Pork in meat consumption in
Vietnam

But we are observing a shift in type of pork
consumed
Source: VPM 2014 estimates
In the scenario of 0 productivity growth
for traditional pig sector and 10% for
modern pig sector:
• From 2020, there will be more
commercial pork (77%) consumed
than traditional (18%)
• In terms of prices, modern and
commercial pig prices drop, while
traditional pig prices slightly increase
• This will require more maize imports,
at 14% annual growth
• Other studies show increasing concern
about safety and hygiene shaping
demand and consumption preferences
Projected market trends –
Vietnam pig sector

And the demand is not only domestic, with
important price variation
Per capita consumption and production of pork <kg>
Domestic market absords about more
than half of production
Export market is important (but not
captured in trade figures)
Source: Computed from VHLSS data

The China market and how it affects price
China is currently the biggest importer of Vietnam’s pigs, mainly illegally through borders
high threat given its unsustainability.
“Current selling price of pigs is
24.000VND/live weight kg compared
to 40.000VND/kg last year because
China stopped buying pigs at the
border gates” (VC meeting, Phu Luong
com.
“Opportunities for pig production only
appear if we can export pigs. Experiences
show that whenever Chinese markets open
for Vietnam’s pigs, selling prices will increase
and vice versa (VC meeting, Muong Coi com.
20
25
30
35
40
45
50
55
1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3
2013 2014 2015 2016 2017
Economic
recession
Increasing
end-year
demand from
China
Relatively
stable
demand from
China
Higher price of live
pig prices in China
(60.000VND/kg
compared to
54.000VND/lkg in
Vietnam
Tightened
genetic controls
at border gates
Increasing
supplies of
frozen pork from
reserves to
replenish
supplies in China
Price of live pigs in domestic market (‘000VND/kg)
Source: MARD, 2017

Is there a mismatch between producers’
and consumers’ perspectives?
Direct &
indirect
subsidies of the
government
Prevalence of
industrial feed
Less economic
efficiency of
indigenous pigs
Prohibition of
free-range pig
farming
Favor exotic and
crossbred pigs at
the expense of
indigenous pigs
From producers’
perspectives
Increasing
living
standards
Growing
concerns
about food
safety
Improved
efficiency of
supply
chains
From consumers’
perspectives
• More demand
for products
complying safe
standards (e.g.
VietGAHP,
organic…)
• Growing niche
markets for high-
quality
indigenous
/cross-bred pork
products.
Source: Review of the NW-specific literature
?

Consumers’ preferences for pork attributes and
outlets
Consumer’s trust
Certification is needed Yes 32.7%
No 26.2%
Trust in stamp Partly
Fully
Not at all
13.9%
22.4%
37.5%
Important pork attributes considered by consumers Choice of outlets
0.00
1.00
2.00
3.00
4.00
Wholesale
market
Retail market
supermarket
Street vendor
Hotel/
Restaurant
other sources
Choice of sellers
Criteria
Very
important &
important
Trust in sellers/
sources
81%
Personal relations 68%
1: Often, 2: Occasionally, 3: Rarely, 4: Never
Source: Baseline consumer survey in Hung Yen and Nghe An (2013)

Producers’ perspectives on demand for
different pig breeds
Commune Demand <producer’s
perspectives>
Demand <infered from
retailer>
Tan My Moving to cross-bred and
exotic
Consumer prefer fresh, lean
meat; red color meat
Higher price of indigenous pig
compared to cross and exotic
Phu Luong Moving to cross – bred and
exotic
Muong Coi Moving to cross- bred and
exotic
Bac Phong Moving to cross-bred
And wild cross bred, Ban pig
No information
Source: Fieldwork in Hoa Binh and Son La, 2017

Expected changes over the next 15 years
Value chain development
• Products (New GAHP, organic, indigenous...) and special product chains for
niche markets
• Linkages in the chain (loosely agreement –....--- contract farming)
• Functions: slaughtering to be strictly managed
• Growing number of restaurant chains offering barbecue menus <imported
pork + beef>
Trade:
• Domestic market still dominates
• Import may increase depending on demand of processing industry + price
Production intensification: Trend of increasing intensification, especially in rapid
urbanized areas
Volume: No increasing trend due to drastically down in price, depending on China
market
Source: Review of the NW-specific literature; Fieldwork in Hoa Binh and Son La, 2017

Drivers of change over the next 15 years
Policies (mainly focus on supply)
• Restructuring of the agricultural sector: increase share of livestock <credit,
land, linkages in food commodity chains>
• New Rural Program
• Policy advocacy for livestock production (i.e. Decision 50/2014/QĐ-TTg on
improving performance of livestock production in smallholders period 2015-
2020
Economic development <ave.growth rate 4-5%>
Consumption habits
• Processed foods
• Out dinning
• Change to modern outlets
• Pig with natural feeding and special pork
<indigenous>
Environmental issues <high density region>
Rapid Urbanization

Other drivers of change over the next 15
years- insights from the field
Others: Climate change and competing income-generating activity
Rural unemployment
Commune other External factors
Tan My
Phu Luong Abnormal weather : diseases happen more
frequently
Muong Coi
Bac Phong Less rain, lack of water and decreasing natural
feed < Duong leaves>
other External factors
Labor find jobs in cities and other provinces Leaving old + female at
villages
Moving maize land  other competing crops < fruits> having higher
income  change pig production <family labor>
Source: Fieldwork in Hoa Binh and Son La, 2017

Research objectives and methods
Improved understanding of consumers’ demand
o Combination of secondary data collation and primary data collection for butchers,
restaurants and possibly some final consumers
o “net promoters score” that looks at consumers’ loyalty for a product (here
breed type);
o willingness to pay analysis
o Survey at Chinese border and KIIs of cross border traders and Chinese buyers and
retailers
o Econometric analysis of drivers of consumer’s preference, WTP and ‘loyalty’ to a
breed type.
o Demand analysis to generate new estimates of income and price elasticities using
latest Vietnam Household Living Standard Survey (VHLSS) to evaluate income and
price effect on demand/pork consumption.
Estimation of future demand, by scenarios
o Using likely population and income trends and external (China) change in demand,
predict demand in next 15 years

Expected research outputs - on demand for
various breed types
What we already know:
Domestic market:
- Strong differentiation between large cities and secondary towns:
breed type, pig weight, fat content, time of the year
- Consolidation of a niche market for indigenous and crossbred
pigs, in systems where maize could be more integrated
Export market:
- Affect farm-gate price substantially
What would be the expected research outputs
- Quantification of demand for pigs (by breed types, other
attributes), that would be a reality check for growth of the sector
- Pig and maize market and price levels, under different scenarios

This work is financed by
ACIAR
It is implemented in a partnership with
MARD and its various research institutions and line
agencies in Vietnam
It contributes to the CGIAR Research Program on
Livestock
Acknowledgements

This presentation is licensed for use under the Creative Commons Attribution 4.0 International Licence.
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