Pork trading floor - an opportunity for market transparency.

Ho Chi Minh City is piloting a pork trading exchange, aiming to shorten the supply chain and stabilize prices. Initial indications suggest this model could pave the way for a more transparent market organization and lay the groundwork for restructuring the livestock industry.

Trial operation of the pork trading floor.

Starting on April 6th, the Ho Chi Minh City Department of Industry and Trade has been conducting a trial run of the pork trading platform. This is a step aimed at assessing the difficulties and obstacles encountered during implementation, before the official launch on April 30th.

In the early days of the trial, participating entities proactively adjusted their production and distribution activities to meet the platform's requirements. In particular, logistics were reorganized to be more flexible, directly meeting the needs of buyers instead of relying entirely on traditional intermediaries. Some units also implemented promotional programs with competitive prices, lower than many other suppliers in the market.

Ho Chi Minh City is expected to officially launch its pork trading exchange from April 30th. (Photo: Provided)

Initial results showed positive signs. The first day of operation recorded only two transactions, but this increased to six the very next day, with a total of 39 pork cuts successfully traded. The number of transactions continued to increase in the following days, indicating growing interest from businesses and traders.

Not only the initial participating units, but also many traders at wholesale markets have proactively sought information and registered to participate in the platform. According to the Department of Industry and Trade, the account opening process is designed to be simple, taking only about one and a half minutes, making it easy for businesses to access and test the new trading method.

Notably, modern retail systems such as MM Mega Market and Bach Hoa Xanh have registered to participate. Bach Hoa Xanh is expected to conduct trial transactions in the near future. The participation of these large distribution businesses is expected to provide a significant impetus for the formation of a closed supply chain, from production to consumption.

With a consumption scale of approximately 13,000-14,000 pigs per day, equivalent to a transaction value of over 25 trillion VND per year, Ho Chi Minh City is currently the largest pork market in the country. This scale not only facilitates the testing of new models but also creates an urgent need for a transparent, efficient, and digitally-oriented operating method.

Price transparency, reducing intermediaries.

Experts believe that the pork exchange is expected to bring about fundamental changes to the entire supply chain.

According to Mr. Duong Duc Quang, Deputy General Director of the Vietnam Commodity Exchange, centralized trading on the exchange helps parties publicly disclose prices and volumes, thereby creating a more transparent price level. When prices are publicly listed, the market will reduce information discrepancies between parties, limit speculation, and contribute to price stability.

Another important benefit is that it helps farmers be more proactive in production. Instead of being completely dependent on market fluctuations after slaughter, farmers can rely on price signals from the exchange to determine herd size, restocking timing, and business strategy. If further tools such as futures contracts are developed, this "pre-pricing" could even become a form of risk hedging.

Furthermore, this model also creates positive pressure for standardizing product quality. When participating in the exchange, pork must meet specific standards and regulations to be listed. This forces livestock farms to gradually improve quality, while also promoting the development of traceability systems – an increasingly important factor in the context of consumers' greater concern for food safety.

A major bottleneck in the current market is the multi-layered supply chain. Pigs from farms pass through many stages, from traders and slaughterhouses to distributors and retailers, before reaching consumers. Each stage increases costs, resulting in significant differences between retail prices and live pig prices. A trading exchange, with its mechanism of directly connecting buyers and sellers, is expected to shorten this chain, thereby reducing costs and benefiting both producers and consumers.

From a management perspective, the exchange also opens up the possibility of more effective market monitoring. When transactions are conducted on a centralized platform, authorities can better track prices, production, and product quality. This not only helps improve management efficiency but also provides a basis for guiding the development of the livestock industry towards large-scale, integrated supply chain, and sustainability.

International experience shows that trading commodities through exchanges is one of the important tools for modernizing the market. Not only does it help increase transparency, but this model also contributes to the market operating according to supply and demand mechanisms, gradually reducing dependence on administrative measures.

However, for the model to be effective, more time is needed for verification. The challenges lie not only in the technological infrastructure, but also in changing the trading habits of merchants, as well as the ability to reorganize production according to standardized procedures.

Although much work remains to be done, given the large market size and the increasing demand for transparency, the pork exchange is expected to become a significant step in the restructuring of the agricultural market, not only in Ho Chi Minh City but also potentially in other localities in the future.

Source: https://daibieunhandan.vn/san-giao-dich-thit-lon-co-hoi-minh-bach-thi-truong-10413919.html