Pushing down Food Prices: Difficult but Necessary Task

Mr Nguyen Xuan Duong, Deputy Director of Animal Husbandry Department, said, according to reports sent to the Ministry of Agriculture and Rural Development, livestock value in many provinces slumped in recent months. Imbalanced pork supply and demand caused localised scarcity. Worse, epidemics caused pork output to fall 3.7 percent in the past three months.

 

He added that the supply will not likely increase in the coming time if competent organs lack strong guidance, because farmers have suspended raising livestock in fear of disease outbreaks and rising input costs, while breeding units cannot raise enough livestock as they face difficulty accessing capital.

 

According to statistics, Vietnam’s meat output totalled 2,438,600 tonnes in the first six months of 2011, up 5.3 percent over the same period in 2010, with pork and poultry meat accounting for a majority. Pork prices are still on the rise. Similarly, prices of most popular vegetables and aquatic products are increasing. Prices of vegetables, roots and fruits were up VND2,000 - 17,000 per kilo, while prices of aquatic products also rose by VND8,000 - 10,000 per kilo.

 

At the cabinet press conference held in Hanoi on July 25, 2011, Mr Nguyen Tien Thoa, Director of Price Management Department under the Ministry of Finance, said: Consumer Price Index (CPI) unexpectedly climbed 1.17 percent in July on account of food buoyancies. Most commodities and services climbed in price, with food prices adding 3.2 percent. Higher food prices also entailed a considerable rise in eating out cost. These two factors contributed 0.9 percent to the July CPI gains.

 

However, he rejected the rumour that the domestic undersupply was caused by foreign purchasing. “The official information from the Ministry of Agriculture and Rural Development said that the foreign purchase was true in the first months of the year, but the quantity was low. In the latest three months, Vietnam has even imported pork.”

 

In fact, current pork prices in Vietnam are higher than in China; hence, the export to the neighbouring country tends to slow down. The Ministry of Agriculture and Rural Development said Vietnam is expected to supply 1.7 - 1.8 million tonnes of pork from now to the end of this year, enough for domestic demand.

 

Mr Hoang Kim Giao, Director of Animal Husbandry Department, forecast: “From now till the end of this year, pork prices are unlikely to go down because the food supply cannot recover immediately; it needs more time after a disease outbreak. Moreover, rising lending rates and double feed prices also inhibit farmers from raising livestock.

 

Ms Ho Thi Kim Thoa, Deputy Minister of Industry and Trade, said: Amid growing food prices, particularly pork, the Ministry of Industry and Trade has actively directed provincial and municipal departments of industry trade to review and evaluate market supply and demand and send daily reports to the ministry for quick response to new problems. The ministry has also requested market authorities in border-sharing provinces to coordinate with competent organs to control pork export.

 

Meanwhile, Mr Hoang Kim Giao noted that to maintain the food supply, the Animal Husbandry Department will advise farmers to scale up production and keep animal disease outbreaks in check. The department will coordinate with relevant bodies to strengthen market inspection and control over goods flows to adopt timely measures to cope with irrational price hikes.

 

The Ministry of Agriculture and Rural Development has also proposed that the government adopt priority policies for animal-breeding businesses, particularly feed price-stabilising measures, soft loans, etc.

 

The rainy season may affect the food supply, leading to local price fevers. For that reason, the Ministry of Industry and Trade will coordinate with the Ministry of Agriculture and Rural Development to review food supply and demand in the last six months of 2011 to timely inform consumers and prevent irrational price increases.