Rising pig prices lead to smuggling epidemic
A major crackdown is ongoing in China against cross border pig smuggling with a particular focus by Chinese authorities on the provinces of Guangxi (which borders Vietnam) and Sichuan province. Slaughterhouses have been raided on suspicion of killing hogs trucked in from Vietnam.
A local unit of the national State Food and Drug Administration (SFDA) – the body tasked with enforcing Chinese food safety laws - issued a statement seeking to assure local consumers “there is no need to panic” and that meat from the Vietnamese pigs hadn’t failed food safety checks. Consumers in the region were also encouraged to call to phone in any complaints an SFDA number published in all local media.
A crackdown on pollution from the animal husbandry sector has been cited as a reason for a surge in pig trafficking in Ningming County in the Chongzuo prefecture of Guangxi province which has a long land border with Vietnam. A provincial ‘emergency response work group’ of state agencies has been set up to monitor border roads and round up corrupt border officials.
“The situation is serious,” noted the regional government in a statement this week. It is now contacting Vietnam government offices seeking improving cooperation on policing the border. A new system of electronic ear tagging of pigs will be brought in, said the authorities in the provincial capital of Nanning, a 90 minute drive from the border.
Guangxi provincial government has announced it is also “destroying illegal and makeshift roads” while also putting increased, regular police and paramilitary (police) patrols on all border roads and in border towns. Meanwhile, Chinese state TV is reporting that the provincial army of the Central Commission for Discipline Inspection (CCDI), the disciplinary arm of the Communist Party, has been called in to investigate if local officials have facilitate or benefited from the smuggling of thousands of pigs.
Pigs are the current focus of the crackdown but are not the only agricultural commodity smuggled over the border: shrimp, rice and chickens have all flowed across. There have been frequent reports in the past five years of factories in southern China reportedly employing workers from Vietnam where wages are almost half the current Chinese rates for factory wages.
Chinese wholesale prices for pork soared to RMB27/kg in June -and though this slipped to RMB25/kg in August and to RMB23/kg in November – with prices continuing at historically high levels due to smaller herd numbers which have slower to recover due to government restrictions on pig farms as part of a battle against chronic water pollution.
High pork prices have been a boon for importers but Vietnam doesn’t rank in the lists of China’s key suppliers. Chinese data shows key international suppliers of chilled and fresh non-offal pork meat from January to September this year included Germany - which supplied a massive 22% of the total – as well as Spain (17%) and the US (14%).
There are understandable concerns to any uncontrolled movements of pigs into China from Vietnam. While it has the sixth largest pig herd in the world Vietnam –with a population of 92 million people – has struggled with issues like biosecurity and control of diseases like foot and mouth, which remains widespread. The country’s pig breeding and meat processing sectors both remain comparatively fragmented with fewer domestic integrators compared to China. Costs of production are much lower in Vietnam: last year the average industrial wage – paid to factory and farm hands - of US$391 in China looks low next to a corresponding US$176 in Vietnam.
