Vietnam to Add a New Soybean Crushing Line in 2024 


Jun 16, 2023 | Agricultural Markets News

Reading time: 2 minutes

Vietnam’s local Soybean production will decrease to 48,000 tons in MY 2022/231 and continue dropping to 45,000 tons in MY 2023/2024 on the planting area of 30,000 and 28,000 hectares, respectively. A low average yield of 1.6 tons per hectare and fragmented production in the northern mountainous and central highland provinces make local Soybeans uncompetitive with lower-priced imported Soybeans.

According to MARD, Vietnam’s Soybean planted area as of December 31, 2022, was 32,500 hectares, a reduction of 11 percent compared to the previous year. The decline in Soybean planted area in MY2020/21 is part of an overall trend of Vietnamese farmers switching to more profitable crops, such as fruits and vegetables grown for export and domestic consumption.

Vietnam currently has two soy-crushing facilities, one in the north and the other in the south. The southern plant plans to increase capacity by adding a new crushing line in 2024. In addition, according to an industry source, a new crushing facility located in the south is in the final stage of construction and is expected to enter operation in 2024. Increased Soybean crush is being driven by rising demand for both Soybean Meal for animal feed and by consumer demand for Soybean Oil. Post estimates the MY2022/23 Soybean crush at 1.35 million metric tons (MMT), reflecting the crushing capacity of the two existing facilities.

MY2023/24 Soybean crush is to increase to 1.9 MMT with expected additional crush volume from the new facility and expanded capacity for the existing facility in the south. This also aligns with the forecasted higher demand for Meals and Oil.

Post forecasts Soybean consumption for food use will increase in MY2022/23 to 530,000 tons and continue to grow to 550,000 tons in MY2023/24 due to the expected reopening and robust recovery of the service and tourism sectors. According to GSO, in 2022, total Vietnam retail and food service revenue increased by 20 percent compared to 2021.

Food and beverage, lodging, and travel services revenues increased sharply in 2022. The World Bank’s Taking Stock report, released in March 2023 under “Harnessing the Potential of the Services Sector for the Growth,” forecasts that Vietnam’s services sector will be crucial in supporting and maintaining sustainable economic growth in the coming years.

Post projects higher soymilk demand for local consumption and export in 2024 due to its competitive price. According to local media, Vinasoy-QNS, one of the largest local soymilk producers, reported an increase of 13 percent in total annual revenue for CY2022. Feed, Seed, Waste Consumption Post reaffirmed its forecast for Soybean feed consumption in MY2022/23 and MY2023/24 at 180,000 tons, in line with the projected repopulation of poultry breeding facilities and increased poultry and swine production.

Soybean Import in Vietnam

According to Vietnam Customs, Vietnam’s Soybean imports in MY2021/22 reached 1.84 million tons, a decrease of 8.6 percent compared to the previous year. According to an industry contact, Soybean imports declined by 13 percent in the second half of MY 2021/22 compared to the same period of the last year due to lower soy Oil exports and lower Meal demand for animal feed in the second half of MY 2021/22, according to an industry contact.

Brazil was the largest Soybean exporter, with 57.7 percent of the market share, with the United States holding a market share of 32.3 percent. Cambodia continued as a Soybean supplier to Vietnam with a 1.4 percent market share due to its proximity advantage. According to an industry source, Soybeans imported from Cambodia are primarily for food use due to good quality. As per AgFlow data, Brazil led their import with 0.32 million tons in Jan-May 2023, followed by the US with 0.3 million tons.

Other sources: USDA

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