VIETNAM – Livestock farms accused of price collusion – 15/06/2011

VietNamNet Bridge – The latest increase in livestock prices in the domestic market, which has surprised both traders and consumers, is being blamed on price manipulation by big breeding companies.

Lending strength to the suspicion of price manipulation is the fact that the surge has come during the low season, but several retailers say demand and supply factors have also played a role.

Pork prices in the city’s retail markets have increased by between VND5,000-8,000 per kilo on average in the last few days. Prices of lean-fat cuts have gone up to VND110,000 (US$5.2) per kilo and the upper leg has been sold for VND130,000 ($6.2).

“Despite the price hike, consumers still have to buy them,” a retailer at Tan Binh District’s Pham Van Hai market said, explaining that they had no choice but to increase their prices as those of all other livestock items have also got increased prices.

The pricing typically depends a lot on supply and demand, but the pork market is an exception, said deputy head of the country’s main livestock supplier Vissan’s Market Office Do Minh Trung. “A new standard price is being set up in the pork market.”

The Tuoi Tre newspaper cited the owners of some pig farms in the southeastern region as saying prices of live pigs increased because of a shortage in supply following an epidemic in Aprilû. The prices went down later with supply returning to normal.

The latest increase, however, was not caused by any lack in supply.

The pork supply in southern markets has been sufficient, according to a trader at HCM City’s suburban Hoc Mon market, but the price has gone up because of increasing demand from northern markets. “The number of pigs sold to the north sometimes reached 2,000 a day and this made southern pig farmers push up the price.”

Meanwhile, the Ministry of Industry and Trade has said it has not made any plan to import pork so far this year and is unlikely to do so in the coming years as domestic production and supply are abundant.

The head of the Livestock Breeding Department under the Ministry of Agriculture and Rural Development, Hoang Kim Giao, confirmed that supply was sufficient in the domestic market. He attributed the latest hike to international trends and argued it was not a bad thing.

“The increase (in livestock prices) would encourage breeders to further invest and develop their livestock farms after suffering big losses following epidemics last year,” he said.

However, breeders argue that the real beneficiaries of the price hike are not farmers, but livestock companies.

The high price of cattle feed has actually forced quite a few farmers to give up on animal husbandry.

The current suppliers of livestock are mostly large breeding companies, many of them foreign-invested. With their large-scale operations and advanced technologies, they have taken a majority stake in the domestic market.

About 9,000 pigs are sold to HCM City market everyday and the foreign livestock companies supply up to 80 per cent of the total, said HCM City Veterinary Department.

At current prices, breeders can make profits of VND2 million ($95) per 100kg of pig sold, and this is the highest margin so far, according to an owner of a breeding farm in southern Dong Nai Province’s Bien Hoa City.

Speaking on the condition of anonymity, he said these figures indicated how much profit the breeding companies were making and also explained the price hike.

The poultry market is facing a similar situation. The market is dominated by big foreign invested companies like CP, Emivest, Japfa.

The price of industrially-raised chicken went down to VND38,000 ($1.8) per kilo late last month but went up again to VND41,000 (almost $2) per kilo over the last few days. Breeders are enjoying record high profits of 50 per cent, as a kilo of chicken, which requires an investment of VND27,000 (nearly $1.3), is sold for VND40,500 ($1.9).

Information VNS

CHINA – Who Can Guarantee China’s Pork is Safe? –

CHINA – Detection of the toxic additive clenbuterol in pig feed has once again undermined Chinese consumers’ confidence in the country’s food producers.

The Chinese government is serious about the scandal. The Ministry of Agriculture (MOA) announced that it will cooperate with eight ministries and commissions to launch a one-year crackdown on illegal additives in pig feed which have proven to be toxic to humans.

In big cities, like Chengdu and Nanjing, contaminated products from the food company suspected to be involved in the scandal have been soon moved off the shelves in supermarkets.

Some provinces have ordered that slaughterhouses should check their products everyday to avoid unsafe meat to be sold to the public.

Wan Long, Chief Executive Officer with the Henan-based Shuanghui Group, China’s largest meat producer involved in the clenbuterol event, apologized last week.

Wan admitted the company’s mistake and disclosed at a meeting that the scandal had so far cost the company more than 12.1 billion yuan (about US$1.85 billion).

The government hopes that all these efforts would produce some results in saving consumers’ confidence.

Pork is the most popular meat in China. Each year more than 600 million pigs are harvested, according to Wang Zongli, vice director of the husbandry office in the Ministry of Agriculture.

Statistics from the China Animal Agriculture Association (CAAA) show that in 2009, pork accounted for 65 percent of the meat consumed by Chinese.

Clenbuterol, a poisonous chemical that can reduce a pig’s body fat to produce lean meat, was found in meat products from Jiyuan Shuanghui Food Co., Ltd last month.

Experts said that the chemical is very harmful to people’s health, as it might cause cancer and other diseases.

Li Peitang from Dayi County of southwest China’s Sichuan Province has been raising pigs for more than 10 years, and now owns a pig farm with 3,000 hogs, making 1 to 2 million yuan a year.

Clenbuterol is very cheap and using it can reduce a pig’s fat by 10 per cent, Li says.

“Lean pork fetches 1.6 yuan higher per kilogram than fattier cuts,” he said.

“The scandal will hit the meat industry hard,” said Qiao Yufeng, vice chairman of the CAAA.

In 2008, melamine-tainted milk powder killed at least six infants and sickened 300,000 across the country, which deeply eroded consumers’ faith in the integrity of China’s dairy industry.

Experts and many ordinary Chinese have pinned their hope on stepped government monitoring and revised regulations to ensure safe production of food in the country.

A netizen nicknamed sdcharles has blogged, “Where have all the people in charge of supervision gone? Only after the problem has come to light do they start doing something. Why shouldn’t they all be fired?”

While Zheng Fengtian, a professor with the the School of Agricultural Economics and Rural Development at Renmin University of China said, “It’s ridiculous that Shuanghui didn’t check for loopholes in supervision. Rather, it talked about feeding pigs. Is it shifting public attention?”

Professor Zheng believes that the widespread use of clenbuterol is just one of many problems with the country’s meat industry. “Antibiotics are fed to pigs to stop them from getting sick, while growth hormones are added to quicken their growth.”

According to a central government circular issued last October, various governmental departments were given specific responsibilities to strengthen monitoring and regulations to stop clenbuterol and other toxic substances being used in meat production.

However, Qiao Yufeng notes that the departments might shift their responsibilities so they can escape blame should something bad arise.

Professor Zheng suggests tightening supervision at the last stage in the supply chain before the products reach the market.

“Disqualified products have no market. This will force producers to behave,” he said.

While Li Peitang, the farmer, said that most of the problems concerning meat quality existed at the feeding stage.

“We should ensure the safety of feed so as to tackle the problems from the beginning.”

Mr Qiao said that the general public and mass media could play an important role in supervision. “They have always been the whistle-blowers. It is a strong force for social supervision.”

Meanwhile, Shao Yunkai, a media officer with the Consumers’ Association in Heilongjiang Province, cautioned consumers to be sensible.

“With the improvement of people’s living standard, consumers paid more attention to health,” he said. Lean pork with less fat was considered to more healthy.’However, he said, “fat meat has its nutrition as well, and blindness of consumers in their choices might give opportunity to the immoral producers.”

Information ThePigSite News Desk