By Kevin Roepke, U.S. Grains Council Regional Director For South And Southeast Asia

China’s recent pork shortage is reverberating around the world and especially in its southern neighbor, Vietnam, contributing to record pork prices and an increasingly insatiable appetite for U.S. distiller’s dried grains with solubles (DDGS) in that market.

Pork is considered the main source of protein for Vietnam; according to the Organization for Economic Cooperation and Development (OECD), Vietnam consumes almost 30 kilograms per capita, compared to the United States’ 22.2 kilograms per capita. In fact, many analysts have predicted Vietnam to be the world’s highest per capita consumer of pork.

However, China is seen as being on a pork buying spree worldwide, facing increased environmental regulations, sow herd cullings and poor piglet survival rates. Recent Asian media reports quote wholesale Chinese pork prices at an astonishing $4.08 per kilogram, and the country is importing more than 100,000 metric tons a month, primarily from Europe, the world’s largest exporter.

The timing is good for Europe as it struggles with lower prices due to losing Russia as an end market. The United States has also been a beneficiary, as accumulated pork exports to China as of May 19 for the calendar year total more than 68,300 tons, an increase of more than three times from this time last year.

As a result of this, margins have swelled by as much as $100 per head in Vietnam and $180 per head in China, according to Shanghai JC Intelligence Co. Ltd. (JCI). To fulfill the deficit, Chinese traders are reportedly moving to South Vietnam to source more and more live hogs—transporting them back into China for as long as three days.

Vietnamese hog producers are reaping the benefits from this cross-border trade, and their appetite for DDGS shows it. In the most recent trade data released, first quarter imports of the corn co-product were up an incredible 26 percent year-over-year. The second quarter of the year has been Vietnam’s lowest import quarter by volume in four out of the last six years, so it will be interesting to see how the second quarter this year unfolds.

The U.S. Grains Council (USGC) has been aggressively promoting higher inclusions of U.S. DDGS in Vietnamese swine diets, encouraging pelleters to include the maximum levels they can while still maintaining a suitable pellet durability index (PDI).

Moreover, the introduction of the ingredient to more exotic sectors like pangasius catfish and prawn farming remains a focus for USGC programs in 2016 and beyond.

Click here to learn more about the Vietnamese market.