South Africa Steps Ahead in Vietnamese Corn Market
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According to the General Statistics Office of Vietnam, local Corn production and area have steadily declined since 2015 due to low imported Corn prices for feed ingredients. Farmers have shifted to more profitable cash crops such as fruits, coffee, and pepper from Corn, depending upon the soil quality. Industry contacts indicate the production is lower than GSO’s statistics. Local Corn cannot compete with imported Corn due to its lower prices.
Post forecasts that Corn production continues to decrease in MY 2023/24 due to the decline in the harvested area amid steep competition from low-cost imported Corn, mainly from South America. Post keeps its estimates for MY 2022/23 Corn production area at 770 THA with production output at 3,770 TMT. In calendar year (CY) 2022, Corn production and area slightly declined to 4,412 thousand metric tons and 888 thousand hectares.
MY2023/24 Corn consumption is forecast to increase to 14.5 MMT, including 13 MMT feed and residual due to estimated continued wheat high prices and in line with the total feed demand forecasts. Continued high wheat prices will likely lead to higher consumption of Corn for feed use. Post maintains Vietnam’s MY 2022/23 forecasts of Corn consumption at 14.4 MMT, including 12.9 MMT feed and residual due to higher animal feed demand and low feed wheat import.
Corn prices remained high in CY 2022, leading to lower imports. According to traders and feed millers, feed wheat, barley, rice bran, and broken rice are substituted for Corn as energy sources in some feed formulations. CY 2022 feed wheat imports were down approximately 17 percent from CY 2021, according to customs data, due to its high price compared to Corn and other ingredients. The Russia-Ukraine war has increased wheat prices and affected the global wheat supply.
Due to increased Corn prices and disrupted supply from Eastern Europe, local importers sourced Corn from Pakistan, Myanmar, and South Africa. In CY 2022, Vietnam’s Corn imports from Argentina, Brazil, and India declined by 6, 12, and 18 percent, respectively, compared with the previous year. Corn imports from Pakistan, Myanmar, and South Africa increased from 580 thousand metric tons in CY 2021 to 1.72 million tons in CY 2022.
According to AgFlow data, Brazil exported 0.8 million tons of Corn to Vietnam in the last three months, followed by Argentina (0.2 million tons) and India (0.1 million tons). In CY 2022, Argentina remained the largest Corn supplier to Vietnam, with 58 percent of the total market share. Brazil followed with a 15 percent market share, India with 9 percent, and other suppliers with 18 percent.
Vietnam’s MY 2023/24 Corn imports will be at 10.70 MMT on estimated increasing feed demand. Vietnam’s Corn exports in CY 2022 were down 53 percent compared to the previous year, according to Vietnam customs data. The post also projects that MY 2023/24 exports will decrease to 200 thousand tons as MY 2022/23 due to less demand in the Association of Southeast Asian Nations (ASEAN) and high prices.
Corn Price in Vietnam
Domestic Corn prices declined from their peak in early 2023 but are still at a six-year high. The high price of Corn, an essential ingredient in feed formula, led to high input costs of compound feed, which weighed on livestock production. Due to ASF, there has been a shift towards commercial-scale production. An industry contact estimated that hogs in commercial-scale farms now account for 60 percent of the total swine population, and the remaining 40 percent is at the family scale. Farmers prefer commercial feeds due to the high prices of ingredients for homemade feed.
Other sources: USDA
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