RECURRENCE OF AVIAN FLU IN VIETNAM - WHERE'S THE CHICKEN?

UNCLAS SECTION 01 OF 02 HO CHI MINH CITY 001258

SIPDIS

SENSITIVE

USDOC for 6500 and 4431/MAC/AP/OPB/VLC/HPPHO

E.O. 12958: N/A
TAGS: ECON EAGR SENV PGOV SOCI VM AFLU
SUBJECT: RECURRENCE OF AVIAN FLU IN VIETNAM - WHERE'S THE CHICKEN?


1. (SBU) SUMMARY: Both price and availability of poultry in
southern Vietnam declined sharply during a five-month period
following the March outbreak of avian flu, despite government
efforts to reassure the public that avian flu is "under control."
Vietnam has not replenished stocks of poultry and eggs from the
widespread culling that occurred during the first outbreak of
avian flu in December 2003, and farmers in the Mekong Delta have
reportedly stopped raising chicken altogether. As southern
Vietnam has a significant poultry market, declining prices and
scarce supply have suggested public concern about avian flu and
avoidance of poultry. During the past month, however, chicken
prices in Hanoi, as well as in Ho Chi Minh City, have stabilized
and in some cases risen slightly. END SUMMARY.


2. (SBU) According to widespread media reports, since Vietnam was
proclaimed free of bird flu in March, 17 percent of the country's
fowl population has been destroyed, equal to 43.2 million poultry
in 57 out of 64 localities and a loss of VND 1.3 trillion ($83.3
million). International media sources were the first to report on
fresh outbreaks of avian flu this summer and were the only
consistent sources until August. Local English language
publications did not report any confirmation about avian flu from
the Vietnamese authorities, or on any GVN response to avian flu,
until August, at least three months after the recurrence of
outbreaks. Additionally, there was no media reporting on the
avian flu recurrence in the Vietnamese language press until the
end of July.


3. (SBU) Government pronouncements reported in the national media
have not been consistent. During a working meeting with the FAO
on July 14, the Director of Vietnam's Department of Animal Health
(DAH),Dr. Bui Quang Anh, reportedly stated that there had been no
new cases of bird flu in Vietnam since March 30. Yet on July 19
the DAH and the central government announced that an early July
outbreak was "under control". Shortly after the July 19
announcement, major newspapers carried front-page articles warning
that avian flu had returned (from July 30 - August 2). The media
also reported that avian flu was again becoming a big concern, as
the number of people reporting bird flu symptoms rose in
localities having infected chickens.


4. (SBU) Vietnamese media have been fairly muted since the initial
July 19 announcement. Newspapers now carry remarkably similar
reports, quoting the same sources of information. Not until
August 13 did a major Vietnamese publication (Thanh Nien) carry
the headline "Government confirms bird-flu returns." Only a
limited number of government officials are allowed to answer the
press on the topic of avian flu. ConGen media contacts claim that
the GVN decided to follow Thailand's approach in dealing with the
current avian flu outbreak. In their view, Thai authorities
downplayed last year's outbreak and Thailand's tourism industry
suffered little while tourism to Vietnam fell sharply. However,
Dr. Bui of DAH warned the population at a September 1 press
briefing in Hanoi that the HN51 virus could linger in the
environment for at least five years after a fresh outbreak, adding
that the flu could erupt again "anywhere", although he also
announced that the current outbreak could soon be declared "under
control".


5. (SBU) Since the first avian flu outbreak both the supply and
price of chicken have dropped substantially. According to a
report by the World Bank in Vietnam, "The Impact of the Avian
Influenza Epidemic on the Vietnamese Economy," the price for a
chicken was roughly VND 45,000 before December 2003. Recent
ConGen spot checks at local high-end markets indicate a price of
around VND 30,000. On September 17 and October 7, Econoff spoke
with an expatriate retail grocer who sources chicken locally.
According to the grocer, six months ago a whole chicken was priced
at VND 78,000; currently, the grocer pays VND 35,000/chicken.
Additionally, prior to avian flu this grocer sourced from only one
local supplier. Now the company sources from two or three
suppliers due to short supply. However, a wholesale supplier
reported to HCMC Econoff on October 7 that wholesale chicken
prices, which had also been declining, have gone up seven percent
in the past month -- a phenomenon also observed for chicken prices
in Hanoi during the same period.


6. (SBU) Econoff also spoke with a local catering business about
the price of poultry, as well as the price of beef, pork and fish.
While chicken still remains a popularly requested menu item, the
catering company reported paying a retail price around VND
30,000/kilo. The prices of beef, pork, and fish, however, have
risen in the past six months: beef from VND 55,000/kilo to VND
65,000/kilo; pork from VND 27,000/kilo to VND 35,000/kilo; catfish
from VND 30,000/kilo to VND 38,000/kilo; and black mullet from VND
24,000/kilo to VND 30,000/kilo.


7. (SBU) Poultry and poultry products are becoming far less common
even in popular markets such as Ho Chi Minh City's Ben Thanh
Market. Falling demand and prices in recent months, combined with
a fear of contracting the illness seem to be causing farmers to
get out of poultry. ConGen media sources report that only a
handful of markets and supermarkets in HCMC are currently allowed
to sell chicken meat. (NOTE: According to the Ministry of
Agriculture in Hanoi, poultry meat is allowed to be sold
throughout the country in both open markets and in supermarkets,
but cities and provinces may implement their own regulations
regarding the sale of poultry meat. END NOTE.)

8. (SBU) COMMENT: In southern Vietnam, scarcity of poultry,
declining poultry prices over a period of months, and mixed
official media signals suggest a continuing public anxiety over
avian flu and the difficulty the government has faced in assuaging
that anxiety. Recent reports of stable or increasing prices
indicate that the local market may finally be correcting itself by
matching diminishing supply with price increases. END COMMENT.

WINNICK