Washington, (USDA Global Agriculture Information Network) – Report Highlights: Post estimates Vietnam’s wheat imported volume for MY 2016/2017 at 4.5 million tons due to expected increase in the use of both milling and feed wheat. Corn imports are likely to decrease partly as wheat prices remain competitive. Rice production is forecast at 44.52 million tons of paddy rice due to improved weather conditions and sufficient rainfall.
Approved By Gerald Smith
Prepared By Quan Tran
SITUATION AND OUTLOOK
Vietnam is one of world’s top pork consumption countries and stands second in Asia, only after China. The Vietnam hog industry is the key driver of local feed industry. The hog industry has developed rapidly since the 1990s. The last two years, Vietnam sold a growing number of live hogs through the border whenever the demand was very high in China.
Vietnam’s feed industry performed well in 2016 as imports of feed ingredients increased sharply, meeting the rapid increase of local feed demand. In recent years, Vietnam’s hog industry was particularly focused on supplying the local market. Beginning in late 2015, the Vietnam hog industry exported a large number of live hogs, through unofficial channels. Unexpectedly, the border was closed and hog prices dropped dramatically in late 2016, which strongly impacted the Vietnam hog industry and at the same time also had serious impact on the feed industry.
Despite the setbacks, the industry learned from this experience that the export of live hogs and pork meat from Vietnam to countries with higher demand is feasible. The increasing feed mills are working on meeting the high feed demand due to the fast-growing intensive swine industry. Related government agencies are supporting programs focusing on animal production for export.
The government is also considering the importance of imported feed ingredients especially imported corn. The government is aware that there are periods when imported corn is very competitive to local grown corn in lieu of price.
The local corn production areas have gradually increased but not changed markedly over time, reflecting the Vietnamese government’s policy of encouraging the increase of corn cultivation for supplying the local feed industry. However, local corn production face challenges as a result of competitive priced corn supplied by major corn producers like Argentina, and Brazil. Since 2014, competitive international corn prices brought about by slashes in price have been lower than prices for Vietnamese corn. The latter situation, has resulted in abnormal corn volume imported into the country, despite the supply has been much higher than the local demand.
On the other hand, under the right conditions, feed wheat can be an alternative feed source in place of corn. Imports of feed wheat depend greatly on its price competitiveness with corn prices. Feed wheat imported in MY 2016/17 and MY 2017/18 are estimated to increase sharply due to its price competitiveness. However, the reality is feed wheat cannot totally replace corn in the feed industry. Initially, feed wheat was almost exclusively used in aquaculture. Currently, due to the competitive price of feed wheat, the latter is becoming a crucial ingredient in producing compound feed for aquaculture and livestock. This situation is impacting total corn imports into Vietnam.