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1. Build · Compete · Grow
WHAT’S NOW AND
NEXT: VIETNAM
SWINE MARKET
June 2017
July 2017

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Vietnam’s Total Hog Supply: 2013-2016
Note:
• Import data is recorded in tonnes of carcass weight. The figures are converted to head for the purpose of this study
• Ipsos’ calculation takes into account the different sow productivity and survival rate for different types of farm to ensure the
accurate reflection of the market. For instance, sow productivity is 22 hogs per year and survival rate is 87% for integrated farms.
• EVFTA stands for EU-Vietnam Free Trade Agreement and AEC stands for ASEAN Economic Community
Unit: mn head
39.8
43.4
46.6
54.5
0.6
2013 2014 2015 2016
Local production Import
• Import has maintained a minimal share of pork
supply for Vietnam’s market, around 0.1% between
2013-2016.
• Import pork skyrocketed from 5,482 tonnes in 2015
to 40,872 tonnes (583,886 hogs) in 2016, accounting
for 1.06% of total supply.
• This escalation in import could be credited to the
EVFTA and the AEC as they went into effect in early
2016, effectively eliminate tax on import meat.
 Due to the impact of EVFTA, more countries
from the EU have started exporting pork to
Vietnam, including Italy, Ireland, the
Netherlands, and Germany.
Import
Vietnam's Total Hog Supply, 2013-2016
Vietnam’s total hog supply includes both local production and import
Local production
• Between 2013-2016, Vietnam’s hog supply increased slowly and steadily, from around 39.85 million hogs to 54.46 million hogs
respectively.
• In 2016, integrated farms supply is estimated at about 14% hogs in the market, while commercial farms provide close to 6% of the total
hog supply.
Source: GSO, UN Comtrade, Industry experts, Ipsos Analysis

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Vietnam’s Total Supply Output: 2013-2016
33.1 34.0 34.8 35.8
6.2
9.1 10.0
12.00.2
0.2
0.3
0.2
2013 2014 2015 2016
Local consumption Undocumented export Official export
Unit: mn head
Vietnam's Total Supply Output, 2013-2016
Local Consumption
• Total hogs demand is driven predominantly by local consumption, in which the pork is expected to continue being the dominant meat
type in the near term. Local pork demand is estimated approximately 2.50 mn tonnes carcass weight (35.76 mn head) in 2016.
Official export
• Official pork export to Hong Kong and Malaysia has remained a small portion of the total supply output, around 15,000-20,000 tonnes
(~200,000 head) over the period of 2013-2016.
Undocumented export to China (in some cases, perhaps, to Cambodia)
• Undocumented live hogs export mainly to China via border has been estimated to increase in the last three years, reaching close to 12.0
mn in 2016, equivalently to 33,000 hogs traded per day.
• Parts of the Five-Year plan issued by China’s Ministry of Agriculture are restructuring farm scales and relocating swine farms away from
the main business areas, leading to China’s substantial deficit in swine demand. Surging purchase from Chinese traders inflated farm-
gate price in those two years.
Source: GSO, KOLs, Industry experts, Ipsos Analysis

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2017: A Zoomed-in Look
Note: Chart is drawn to demonstrate the gap between supply and supply output
Vietnam's Supply vs. Supply Output Gap, 2013 - 2017
As a result of historically low farm-gate price occurred since the latter half of 2016, many backyard and commercial farms have either
halted their swine production, or reduced their sow herds, while integrated farms are more likely to retain their farm operation pace.
Ipsos Business Consulting evaluates the current situation and anticipates the following scenarios post interviewing with KOLs and
industry experts:
• Optimistic scenario: Undocumented export will reach 2.41 mn live hogs in 2017, a substantial reduction of 80% comparing to
total undocumented hogs exported in 2016. This leads to a residue of approximate 104,750 head in the market.
• Pessimistic scenario: Undocumented export will remain low for the later half of this year with around 1.17 mn live hogs exported
for the entire 2017, which leads to a residue of approximate 1.34 mn head.
Source: GSO, KOLs, Industry experts, Ipsos Analysis
Unit: mn head
39.9
43.5
46.7
55.0
39.5
38.339.5
43.4
45.1
48.0
2013 2014 2015 2016 2017
Total supply Optimistic 2017 Pessimistic 2017 Total supply output

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2018: Fast Forward
Vietnam's Supply vs. Supply Output Gap, 2013 - 2018
Note:
• Total supply output used for 2017 in this chart is the supply output for “Optimistic 2017”
• This graph is drawn to illustrate the supply-supply output gap
• Many farms are expected to resume their swine operation when the gap between supply and supply output becomes narrower next
year. The hog supply is forecasted to increase, reaching approximately 41.0 mn hogs in 2018.
• Though an insignificant amount, pork import can be expected to increase slightly in the future, accounting for about 1.2% of total
supply in 2018, thanks to the lifting of import tax on pork as agreed in the EVFTA and the AEC.
• Since the undocumented export struggles to recover, Ipsos forecast the figure to remain as low as 2.41 mn hogs in 2018. As the local
demand continues to increase steadily, while supply slowly declines, the excess number of hogs could reduce from 7.05 mn head in
2016 to around 100,000 head in 2018.
• Ipsos Business Consulting does not account for the possibility of the currently negotiating official export pork to China deal in the
calculation. This number is anticipated to be minimal.
39.9
43.5
46.7
55.0
39.7
41.0
39.5
43.4
45.1
48.0
39.5 40.9
2013 2014 2015 2016 2017 2018
Total supply Total supply output
Unit: mn head

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Key Takeaways: Unravel Hog Crisis
1
Feed and animal health players should anticipate a shift in Vietnam’s swine farming
structure as the share of backyard sow herd decreases while industrial sow herd increases
as the aftermaths of the current crisis, causing backyard farms to halt production
3
As China aims to complete its swine farm restructuring plan by the end of 2017, its sow
herd is also expected to recover and increase in the future. This suggests that the
undocumented live hog export to China will less likely to return to its peak in 2015-2016
Reducing the sow herd presents an opportunity to focus on improving the productivity of
the future sow herd. Farms may also seek to further reduce costs by changing their
practice such as using less expensive animal health products, temporarily lowering vaccine
usage rate, adopting biosecurity measures, or mixing feed with alternative ingredients
4
2
Since the hog supply will decrease with the falling sow herd, the supply-supply output gap
will narrow in the near future, suggesting a rise in ex-farm price. Due to the loose
implementation of the sow reduction directive, farms may take the rising price as a cue to
start replenishing their herd, thus repeating the crisis cycle

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