Egg producers say the new specialty quota program by the Ministry of Industry and Trade – set to begin this coming April – bumping up the annual quota to 600,000 eggs will likely force many companies out of business.
The price of one egg is already at an all-time low of US$.04 (VND1,000) Nguyen Van Trong, deputy head of the Livestock Production Department, told reporters in Hanoi recently.
Mr Trong was adamant that the increased quota is bound to drive the price down even further and that limits should be revised upwards to protect those in the egg production segment of the economy.
However, other industry experts point out that Mr Trong’s arguments aren’t necessarily sound.
First, they contend, the price of eggs is already so low that there is little economic incentive for exporters from other large egg producing countries to ship eggs of any type into Vietnam.
Second, they assert that over the past year the actual number of eggs that has been imported into the country has been totally inconsequential. They say that all the squawking by alarmists like Mr Trong is much ado about nothing.
They also note, that consumer demand for eggs, just like that for any commodity, is seasonal and egg prices are currently down because demand is relatively low and the market is suffering from an oversupply.
The peak season for eggs is in June, July and August and historically market prices have trended upwards during those months.
In addition, they note that Vietnam has generally been a net exporter of eggs as evidenced by the Vinh Nghiep Company in the province of Vinh Long who has shipped some 30 million salted duck eggs to other countries.
Singapore is one of the largest overseas markets for not only duck eggs from the company but eggs from all types of poultry, they add.
Phan Van Chinh, head of the Ministry of Industry and Trade Export Import Department is one of the experts that doesn’t think the increased quota is anything for farmers and egg producers to get upset over.
Mr Chinh explained that the increased egg quotas are in line with the country’s World Trade Organization commitments to open the commodity markets for farm produce and affect eggs, salt, sugar and tobacco.
Those commitments started in 2007, and in general, call for annual increases of roughly 5% per year, he added.
The egg production segment is under no threat from foreign egg producers, Mr Chinh asserted, adding that if there is an oversupply putting downward pressure on prices then domestic producers should scale back production.
The markets should be left to let natural forces achieve an equilibrium of price, supply and demand.
The egg production segment, he suggested, should look to reinvent the egg and cultivate niche markets such as the organic market if they seek to boost sales and earnings instead of constantly complaining and seeking protectionist measures.
In short, they need to learn how to compete in the new open market economy and start studying the demographics, trends in consumer demand and create innovative new marketing methods to reach both domestic and foreign consumers, Mr Chinh noted.
Other industry experts point to the fact that the global kosher egg market has largely been ignored by the Vietnamese domestic egg production segment. It’s also a very lucrative market that has a tremendous sunny upside to it, they concluded.