Hanoi (VNS/VNA) - As the demand for imported beef soars, Australianexporters are strengthening their market share in Vietnam, but the situation isfraught with risk, experts say.

A Dau tu (Investment Review) newspaper report says Vietnam has becomeone of the largest importers of Australian cattle. In 2016, it ranked fourthamong 32 countries importing Australian cattle.

The report quoted Tong Xuan Chinh, deputy head of the Ministry of Agricultureand Rural Development’s Animal Husbandry Department, as saying Vietnam beganimporting Australian cattle in 2010.

In 2012, the country had just four enterprises importing Australian cows but by2015, the number had risen to several dozen with a total of 360,000 heads ofcattle imported.

Vietnamese businesses are now rushing to import Australian cows and fatteningthem for sale to slaughterhouses. As a result, inventories of live cattle haveswelled significantly.

The inventory of Australian live cattle in 2015 was estimated at 100,000 headsdue to oversupply, Chinh told Dau tu, adding that in 2016, imports of cattlefrom Australia to Vietnam slowed dramatically as feedlot operators moved tolower their inventories.

Before 2010, Australian cattle exporters were not aware of the attractiveVietnamese market. Their main partner at the time was Indonesia, importingnearly 1 million cows from Australia per year, said Luong Minh Tung, Chairman of YenPhu Beef and Dairy Cattle Breeding JSC in Ninh Binh province.

In 2011, the Australian government issued a ban on cow exports to Indonesiaafter reports surfaced about inhumane slaughter in some of its abattoirs,Tung said, adding that Australia also lost their strategic partner after thedecision.

This was the context that Australian businesses, urgently looking for newpartners, found Vietnamese ones, Tung said.

The import of Australian cattle for fattening had been expected to open up anew direction for the fed-cattle industry. However, Tung said, there werealways latent risks in imports. 

He said there were too many businesses involved in importing Australian cattle,which could lead to supply exceeding demand.

Instead of importing culled beef of large weights, Vietnamese firms preferredto import calves in order to fatten and sell to slaughterhouses, which offersgreater profits, Tung said.

However, as Vietnam didn’t have favorable conditions like Australia to breedcows, local importers have to invest a lot in infrastructure to support theinflux of Australian cattle, meeting strict importing-related requirements.

According to Hoang Dung, Director of the Hai Phong Investment and AnimalPoultry Products Import Export JSC., or Animex Haiphong, Australia requires allslaughterhouses in importing countries to have modern equipment and comply withECAS (exporter supply chain assurance system) needs.

Businesses whose abattoirs are not in line with ECAS will be banned frompurchasing Australian cows.

Such bans could cause huge losses to many Vietnamese slaughterhouses, Dungsaid, adding that although there were thousands of standard slaughterhouses,only 100 units or so had been approved by the Australian side.

Dung also said many small and medium-scale cattle breeders were facing severecompetition from large rivals, like the Hoang Anh Gia Lai AgricultureInternational JSC (HNG), which has poured trillions of dong into importingAustralian cattle to Vietnam for fattening and selling.

"Small businesses usually import several thousand heads of cattle eachtime and will purchase more only after they have already sold them out.Meanwhile, HNG buys 30,000 to 40,000 heads of cattle each time," Dungsaid.

The Da utu report said that at the end of 2016, the Viet Eco Farm JSC. launcheda beef store chain called “Healthy beef” in Can Tho city, providing fresh, highquality Australian beef products in large quantities.

In the short term, the company aims to supply beef for the Mekong Delta region,but plans to expand its market in other parts of the country, establishing newdistribution channels.

Viet Eco Farm also imports Australian calves to fatten and sells mature cows toabattoirs at thousands of heads per time. The company has invested a lot inbreeding facilities and modern slaughter lines, and set up 450ha of pastureland to raise cattle.

Chairman of the Vietnam Livestock Association Nguyen Dang Quang said the amountof imported Australian cattle was increasing rapidly, being sold at reasonableprices, enjoying preferential tariffs and becoming more popular with Vietnameseconsumers.

Australian beef is "dominating” the Vietnamese market, Quang said, addingthat the more fierce rivalry between Vietnamese firms, the more benefitsAustralia exporters could enjoy.

Quang said it is imperative the country imposes technical barriers onAustralian beef so as to protect the domestic cattle industry.-VNA