Economists have warned that the Vietnamese market will be flooded with foreign-sourced food, including US beef and Canadian pork, once Vietnam becomes an official member of the World Trade Organization and has to cut tariffs.
The Golden Garden Company Ltd began importing US beef to sell domestically seven years ago. Now the company has three retail stores, called VeGGys, which provide safe food, including US beef, one in southern HCM City, one in the capital of Hanoi and one in Phnom Penh, Cambodia.
In the past, Golden Garden sold US beef mainly to big hotels and restaurants, and foreigners who live and work in HCM City. However, the number of Golden Garden customers increased rapidly when ‘medium income’ people also began purchasing US beef from the company.
According to Nguyen Hue, Executive Director of Golden Garden, the company imports US beef several times a month, and 1-2 tons each time. Most of the customers like eating frozen fresh beef priced between VND300,000 and VND400,000 ($25) per kilo, too expensive for most Vietnamese considering that the best Vietnam domestic beef is selling for VND100,000 ($6.25) per kilo only.
In addition to Golden Garden, there are 5-6 other companies that import US beef to sell in HCM City. According to the Ministry of Trade, Vietnam imported $1million worth of US beef last year, double the volume in 2003.
Once Vietnam joins the WTO, beef imports will increase sharply, as the tax rate on beef will be lowered from the current level of 20 per cent to 15 per cent in the first year and 8 per cent over the following four years.
Jacques Pomerleau, Executive Director of Canadian Pork International, who arrived in HCM City in July for the first time to survey Vietnam’s pork market, has come to the conclusion that the demand for pork is increasing in Vietnam and this is a good opportunity for Canadian pork processors.
It was not by chance that Mr Pomerleau came to Vietnam at that time. Several months ago, the governments of Vietnam and Canada signed an agreement on animal quarantine, paving the way for the favorable trading of animal meat.
In addition to that, according to Mr Pomerleau, Canada-sourced pork will more easily penetrate Vietnam’s market because Vietnam reduced the tariff from 30 per cent to 20 per cent on June 1, 2006.
“It is good news that Vietnam has signed an agreement with the US on joining the WTO, which means that the tariff on pork will be further cut,” he said.
Canada is a big pork exporter in the world, holding 20 per cent of the market share. Canada-sourced pork has been selling well in Asian countries like Japan, South Korea, Singapore, the Philippines, and China. Therefore, Canadian exporters will find it easier to penetrate Vietnam’s market.
Mr Pomerleau said that in the immediate time, Canadian exporters will provide pork to food processing plants instead of retailing, which means that Canada-sourced pork will not compete directly with Vietnam-sourced pork on the domestic market.
With a total herd of some 25 million pigs and more than seven million buffaloes and oxen, Vietnam annually uses up around nine million tons of feed, 80 per cent for pigs, 18 per cent for poultry, and the remainder for cattle.
In 2006, the country's total meat output is estimated at 2.8 million tons, including 2.4 tons of pork and 350,000 tons of chicken.
The country is striving to increase the national herd by five million pigs to 32.8 million by 2010, supplying 3.2 million tons of pigs on the hoof - an on-year increase of 754,000 tons.
The country also targets exporting 25,000-30,000 tons of pork per year in the 2006-2010 period.
VietNamNet
Vietnamese
