Vietnam – Not a Wheat Producer, Yet Exporter to Africa
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Post forecasts Vietnam’s Wheat consumption at 4.00 MMT in MY 2023/24, higher than MY 2022/23, on higher demand for milling Wheat due to an expected rebound in the tourism sector. Post forecasts feed Wheat consumption MY 2023/24 will remain flat due to high Wheat prices. The Russia-Ukraine war drove Wheat prices up and continues to make the Wheat market highly volatile. Post keeps its estimates for MY 2022/23 Wheat consumption at 3.90 MMT, with forecasted consumption flat in feed Wheat and up in milling Wheat.
MY 2023/24 ending stocks will decline slightly due to estimated high consumption. The post assumes MY 2022/23 ending stocks at 617 TMT, lower than the previous year due to lower imports. All stocks are held in the private sector, generally for three months’ consumption. Farm-feed or farm-feed-food integrated companies have continued to grow in the current market. At the same time, some small and medium feed mills scaled down due to high and volatile prices of ingredients and spiking production costs.
Vietnam imported a more significant amount of rice bran, plant-based meals, and cassava to substitute for feed Wheat as energy sources for animal feed production. Tourism and services rebounded in CY 2022 and early 2023. China’s reopening policy was also a positive signal for consumption for the coming years.
On November 15, 2021, the GVN issued Decree 101/2021/ND-CP that revised Most-Favored-Nation (MFN) tariff rates on Wheat from 3 percent to zero (VM2021-0097). The Decree came into force on December 30, 2021. The introduction of MFN tariff rates for Wheat has positively affected U.S. Wheat exports to Vietnam.
Wheat Trade in Vietnam
Vietnam’s Wheat imports in MY 2023/24 will increase to 4.2 MMT due to the expected higher demand for milling Wheat for tourism and services. Post maintains the MY 2022/23 Wheat imports estimate at 4 MMT. According to Vietnam Customs, total Vietnam CY 2022 Wheat imports were about 3.9 MMT, a decline of 16.5 percent compared to CY 2021. According to the AgFlow data, Australia led its import market with 0.17 million tons of Wheat in Jan-Apr 2023, followed by the United States (0.13 million tons) and Ukraine (50,000 tons).
Australia continued to be the largest Wheat supplier to Vietnam, with 70.8 percent of the total market share, followed by Brazil, the U.S., and Argentina in CY 2022. However, the Wheat import volume from Australia was down 15 percent, while Brazil, the U.S., and Argentina increased their export volumes to Vietnam by 40, 46, and 14 percent, respectively, in CY 2022 compared with the previous year, thanks to Most Favored Nation (MFN) zero import tariff which went into effect on December 30, 2021, for all classes of Wheat.
In 2021, Vietnam imported Wheat worth $1.24 billion, becoming the world’s 17th largest importer of Wheat. In the same year, Wheat was Vietnam’s 47th most imported product. Vietnam imports Wheat primarily from Australia ($864 million), Ukraine ($71.2 million), the United States ($57.1 million), Bulgaria ($57 million), and Brazil ($56.2 million).
In 2021, Vietnam exported Wheat worth $13.7 million, making it the world’s 45th largest exporter of Wheat. In the same year, Wheat was Vietnam’s 591st shipped product. The leading destination of Wheat exports from Vietnam is Cambodia ($12.5 million), Senegal ($588k), Laos ($330k), Thailand ($290k), and the United States ($8.36k). The fastest-growing export markets for Wheat in Vietnam between 2020 and 2021 were Cambodia ($2.67 million), Senegal ($588k), and Laos ($320k).
Vietnam’s Wheat flour exports in the first half of MY 2022/23 increased by 19 percent compared to the same period of the previous year. Post maintains its estimate for MY 2022/23 Wheat flour exports at 250 TMT and forecasts that MY 2023/24 will increase to 300 TMT.
Other sources: USDA
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