Vietnam seeing hike in feed wheat imports

By Jane Byrne

- Last updated on GMT

© istock/semakokal
© istock/semakokal

Related tags Feed wheat Wheat

Unlike milling wheat that has maintained an almost stable import volume, feed wheat imports into Vietnam in marketing year (MY) 2015/2016 increased sharply, due to their price competitiveness when compared to imported corn prices, finds a USDA report.

“Increasing wheat imports depend a lot on the price difference of feed wheat and corn,”​ noted the authors of a global agriculture information network (GAIN) publication​ evaluating crop movements in the South East Asian country.

Vietnam does not produce wheat. The country has to import wheat annually for both milling and animal and fish feeding purposes.

Total MY 2015/2016 wheat total consumption in Vietnam is estimated at 2.475m tons, around 325,000 tons higher than MY 2014/2015.

The main sources for the feed wheat imports are Brazil, Canada and Black Sea. In MY 2015/2016, imports of feed wheat into Vietnam are estimated at about 600,000 tons, which is almost all the wheat import volume increase, according to the GAIN report.

MY 2016/2017 wheat consumption is also forecast to jump slightly due to greater demand for both feed wheat and milling wheat, said the authors.

Aqua feed expansion

The lift in feed wheat consumption is also due to the expansion of the Vietnamese feed industry, specifically the aquaculture feed industry, noted the publication.

Corn production regions in Vietnam faced greater difficulties in MY 2015/2016 due to adverse weather conditions and competitive prices from large corn producing countries like India, Argentina, and Brazil.

And so imports of corn into Vietnam are up sharply. They have grown from a figure of 4.9m tons in MY 2014/2015 to 7.9m tons in MY 2015/2016.

The corn imported into Vietnam is mainly used in the feed industry.

In terms of energy sources, the livestock sector in that country alternates between both local and imported corn, imported feed wheat, locally grown rice or rice bran and cassava based on the market price and availability.

Feed wheat from Argentina and Brazil in late MY 2015/2016 and from Eastern EU countries, in the early MY 2016/2017, will continue to be a key energy source in the Vietnamese feed market.

According to traders and Vietnamese importers, feed wheat is still preferred if its price is equal or below the level of $10 premium to corn price, said the authors of the GAIN report.

Fastest growing meal market

The Vietnamese meal market is already the second largest meal market in Asia following China, and is expected to grow at the fastest rate in the region, driven by fundamental demographics and the overall development of its economy. “The USDA forecasts Vietnam meal consumption should rise 43% and oil 47% by 2025," ​said Susan Burns, a spokesperson for Bunge in July.

Bunge Limited and Wilmar International Limited announced that month the setting up of a joint venture to develop the supply chain of soybean products in Vietnam.

The companies announced the prospective partnership on Tuesday. In the deal, US-based Bunge is set to sell 45% of its equity in soybean crush operations based in Vietnam to the Singapore-based agribusiness.

Bunge will retain 45% equity and Quang Dung will continue to have its 10% share. The third partner company is a major soybean meal distributor in Vietnam and owns the majority of the Vietnamese feed milling business, Green Feed.

In Vietnam, Bunge is the largest producer of soybean oil and Wilmar is a major buyer of soybean oil. 

Wilmar said the soybean meal distribution capabilities of the joint venture also complement its animal feed ingredients business in Vietnam, which includes rice bran, wheat bran, palm kernel expeller, copra expeller, canola meal and feed oils. 

Related news

Show more

Follow us

Products

View more

Webinars