1 THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT POLICY Required Report - public distribution Vietnam Oilseeds and Products Annual Vietnam Oilseeds and Products Annual Approved By: Robert Hanson Prepared By: Huong Nguyen, Megan Francic Report Highlights: Driven by strong feed demand from the livestock and aquaculture sectors and falling local soybean cultivation area, soybean imports are forecast to increase to 1.9 million metric tons (MMT) for marketing year (MY) 2018/19 (calendar year [CY] 2019), a significant increase from the MY2017/18 estimated level of 1.65 MMT. In MY2017/18, the United States had the largest market share for soybeans due to competitive prices. Post projects that soybean meal (SBM) imports will continue to increase to 5.2 MMT and 5.3 MMT in MY2017/18 and MY2018/19, respectively, driven by the continued expansion of the domestic feed and food industries. Date: 4/11/2018 GAIN Report Number: VM8018
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THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY
USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT
POLICY
Required Report - public distribution
Vietnam
Oilseeds and Products Annual
Vietnam Oilseeds and Products Annual
Approved By:
Robert Hanson
Prepared By:
Huong Nguyen, Megan Francic
Report Highlights:
Driven by strong feed demand from the livestock and aquaculture sectors and falling local soybean
cultivation area, soybean imports are forecast to increase to 1.9 million metric tons (MMT) for
marketing year (MY) 2018/19 (calendar year [CY] 2019), a significant increase from the MY2017/18
estimated level of 1.65 MMT. In MY2017/18, the United States had the largest market share for
soybeans due to competitive prices. Post projects that soybean meal (SBM) imports will continue to
increase to 5.2 MMT and 5.3 MMT in MY2017/18 and MY2018/19, respectively, driven by the
continued expansion of the domestic feed and food industries.
Date: 4/11/2018
GAIN Report Number: VM8018
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EXECUTIVE SUMMARY
Vietnam soybean production has been dropping in recent years due to low yields and the continuing
decline in growing area as farmers switch to more profitable crops, including other field crops and fruits
and vegetables. Soybean production continues to fall well below the demand from the food, and
livestock and aquaculture feed sectors.
Post estimates MY2017/18 soybean imports at 1.65 MMT, an increase of 5 percent over the previous
year. Post forecasts total MY2018/19 soybean imports to increase to 1.9 MMT due to rising demand
from the food and feed industries and the prediction that the already on-line crushing facility in the
South and the newly established crushing facility in the North will run at increased capacity. In MY
2017/18 and MY 2016/17, the United States remained the largest exporter of soybeans to Vietnam due
to competitive prices, with Brazil second.
Post projects that SBM imports will continue to increase to 5.2 MMT and 5.3 MMT in MY 2017/18 and
MY2018/19, respectively, due to continued strong demand from the food processing and livestock and
aquaculture feed sectors. Post projects that the domestic livestock and poultry sectors will become more
stable and developed in coming years due to increased foreign direct and local investment.
Peanut production is projected to drop in coming years due to a continued decrease in cultivation areas
as Vietnamese farmers switch to more profitable crops, such as fruits and vegetable for both the
domestic market and for export. At the same time, total domestic per capita peanut consumption will
increase.
Coconut production is projected to increase in both MY2017/18 and MY2018/19 due to expansion in
coconut plantation area over the past 5 years. Production of copra, copra meal, and copra oil are
negligible due to low domestic demand. There is higher demand for other coconut processed products,
such as desiccated coconuts, coconut milk, and coconut milk powder.
Post forecasts that vegetable oil production will continue to increase in MY2017/18 and MY2018/19 to
meet the increasing demand from both the domestic and export markets. However, Vietnam continues
to rely heavily on imported vegetable oils to meet consumption demand because domestic crude
soybean oil production from the crushing industry remains small. Palm oil imports accounted for about
90 percent of total vegetable oil imports in MY2016/17 due to competitive prices, as compared to other
vegetable oils.
OILSEEDS SITUATION AND OUTLOOK
SOYBEANS
PRODUCTION
Soybean production dropped in MY2016/17 as farmers switched to more-profitable crops
According to official data from the Vietnamese General Statistics Office (GSO), Vietnam’s MY2016/17
soybean production was 102.3 thousand metric tons (TMT) on 68,500 hectares (ha). This is a
production drop of 18 percent compared with the previous year. The continuing decline in soybean
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growing areas in both the North and South is a result of Vietnamese farmers switching to more
profitable crops, such as various fruits and vegetables, and impacts from unfavorable weather in some
growing areas, especially in Hanoi, Ha Giang, and Thanh Hoa provinces as farmers took previously
cultivated land out of soybean production. However, Post notes a slight increase in yield due to the
planting of higher yielding varieties (See Table 1).
Soybean production is projected to drop further in MY2017/18 and MY2018/19 due to a continuing
decline in growing areas
Post estimates MY2017/18 and forecasts MY2018/19 soybean production at about 90 TMT on a
projected 60,000 harvested hectares, as MY2016/17 trends carry through and farmers continue
switching to more profitable crops. In general, the scale of soybean production remains small compared
with other crops and continues to fall far short of domestic demand due to generally low yields and the
aforementioned reduced growing area. Commercial biotech soybeans are not cultivated in Vietnam, and
there are no applications currently in review. For more information on biotech crop cultivation in
Vietnam, please refer to GAIN report VM7071.
Table 1: Soybean production
2014 2015 2016 2017 2018* 2019*
Crop area (thousand ha) 110.2 100.8 84.6 68.5 60 60
Crop yield (MT/ha) 1.43 1.45 1.47 1.49 1.50 1.50
Total production (TMT) 157.9 146.4 124.3 102.3 90 90
Source: General Statistics Office (GSO), Ministry of Agriculture and Rural Development (MARD),
*Post estimates
CONSUMPTION
Industrial crush
Soybean consumption is projected to increase in MY2017/18 and MY2018/19 due to strong demand
from industrial crushing plants
Post reduces crush volume to 1.1 MMT in MY2016/17 from the USDA official data of 1.2 MMT due to
the availability of new data provided by industry sources.
Post’s estimate of the MY2017/18 crush volume comes in lower than USDA official data at 1.2 MMT,
as the crushing facility in the South anticipates that crushing volume will remain unchanged from the
previous year. While in the Bac Ninh province in the North, a new cursing plant owned by Dabaco
Group with a capacity of 1,000 MT of soybeans per day is expected to come on-line by July. Post
anticipates that this crushing plant will not run at full capacity in the first year of operation, but could
increase demand for imported soybeans in the coming years.
Post forecasts MY2018/19 soybean crush to increase to 1.35 MMT due to expected operation of both
crushing facilities in Vietnam, as the need for SBM in the feed sector continues to drive overall demand
higher.
Feed production will continue to increase
Post estimates total feed production for MY2017/18 at 30 MMT, of which 23.8 MMT is animal feed and
6.2 MMT is aquaculture feed. SBM accounts for 20 percent of total feed production. Post forecasts
*Note: Peanuts are in in-shell basis, including in-shell peanut (HS code 120210; 120241) and shelled peanuts (HS code
120220; 120242 and 200811 – including peanut butter, but amount of peanut butter negligible), and peanut seeds with HS
code 120230. Conversion rate from shelled peanut into in-shell peanuts: 1.33.
Peanut exports decline due to reduced demand from importing countries Official data for peanut exports is not available in Vietnam. According to the data from the Global
Trade Atlas (GTA) and local traders, Post estimates Vietnam’s peanut exports in MY2016/17, including
in-shell, shelled peanuts, and processed peanut products at about 38 TMT. Vietnam’s main export
markets are Taiwan, Russia, Malaysia, the United States, and China.
Post forecasts total peanut exports in MY2017/18 and MY2018/19 down to 35 TMT due to lower
demand from importing countries.
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Table 6: Vietnam’s peanut exports, by HS Code Year 2012 2013 2014 2015 2016 2017
Total converted into in-shell peanut exports (MT) (conversion
rate 1.33) 9,142 12,658 8,246 9,564 9,497 38,416
Source: GTA
Note: Peanuts are on in-shell basis, including in-shell peanut (HS code 120210; 120241) and shelled peanuts (HS code
120220; 120242 and 200811 including peanut butter, but volume of peanut butter negligible), and peanut seeds with HS
code 120230; Conversion rate from shelled peanut into in-shell peanuts: 1.33.
POLICY
Suspensions of peanut imports from Indonesia, Hong Kong, Sudan, and Senegal remain
Vietnam’s suspensions of peanut imports from a number of countries, including Indonesia (since
January 2017), Hong Kong (since October 2016), Sudan (since October 2016), and Senegal (since
September 2016) remain.
Import tariffs changed for FTA partners
In 2018, the tariff rate applied to both in-shell and shelled peanuts (HS Codes: 1202.41 and 1202.42)
imported from countries having a MFN status with Vietnam remained at 10 percent. For countries with
trade agreements with Vietnam, 2018 tariffs changed from 2017 as follows:
For AJCEP, from 2 percent to 1 percent
For VJEPA, from 3 percent to 2 percent
For AIFTA, from 4 percent to 3 percent
For VCFTA, from 6 percent to 5 percent
For ATIGA, ACFTA, AKFTA, VFFTA, VN-EAEU tariff-free status remains unchanged
In 2018, the tariff rate applied to roasted ground nuts (HS Code: 2008.11.10) imported from countries
having MFN status remains at 30 percent, while it changed from 2017 as follows for the countries
having trade agreements with Vietnam:
For AANZFTA from 5 percent to zero percent
For AIFTA, from 15 percent to 10 percent
For VCFTA, from 20 percent to 17 percent
For AJCEP, from 18 percent to 15 percent
For VJEPA, from 20 percent to 17.5 percent
For ATIGA, ACFTA, AKFTA, VFFTA tariff-free status remains unchanged
Table 7: Peanut import tariffs
HS code Descripti
on
Import tariffs (%)
MF
N
ATIG
A
ACFT
A AKFT
A
VKFT
A VJEP
A AJCE
P AIFT
A AANZFT
A VCFT
A
VN-EAE
U
1202 Peanuts, not roasted or otherwise cooked, whether or not shelled or broken
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1202.30.
00
- Seed
suitable
for
sowing 0 0 0 0 0 0 0 0 0 0 0
- Other
1202.41.
00 --In-shell 10 0 0 0 0 2 1 3 0 5 0
1202.42.
00
--Shelled,
whether
or not
broken 10 0 0 0 0 2 1 3 0 5 0
2008 Fruits, nuts and other edible parts of plants, otherwise prepared or preserved, whether or not containing
added sugar or other sweetening matter or spirit, not elsewhere specified or included
2008.11 --Ground-
nuts
2008.11.
10
- - -
Roasted
ground
nuts 30 0 0 0 0 17.5 15 10 0 17 21.8
2008.11.
20
- - -
Peanut
butter 18 0 0 0 0 17.5 15 10 0 17 9
2008.11.
90 - - - Other 20 0 0 0 0 17.5 15 10 0 17 10
Source: Ministry of Finance
COPRA
PRODUCTION
In MY2016/17, Vietnam produced about 1.5 MMT of coconuts on 169,700 ha, equivalent to about 270
TMT of copra, an about 2 percent increase in copra equivalent production over the previous year due to
cultivation expansion. Estimates for copra production are at 17.5-17.8 percent of total coconut
production, as there is no official data for copra available in Vietnam.
Post data differs from USDA official data due to calculation revisions for copra production and
consumption.
Post forecasts MY2017/18 and MY2018/19 coconut production at 1.5 MMT and 1.6 MMT or copra
production at 275 TMT and 285 TMT. Vietnam does not produce much copra for coconut oil crushing
due to low domestic demand and mold issues that occur in tropical climates. There are higher demands
for other coconut products, such as coconut milk and coconut milk powder and desiccated coconut
products with the use of fresh coconut flesh. Based on coconut oil production data provided from GSO,
Post estimates total copra production in the country at 14 TMT for MY2016/17. This level will remain
unchanged for MY2017/18 and MY2018/19.
MY2017/18 and MY2018/19 coconut production to increase due to anticipated expansion in coconut
plantation area
In MY2016/17, coconut yield decreased by 1 percent compared with the previous year due to impact
from unfavorable weather in growing areas leading to increased soil salinity. Industry contacts reported
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that, in 2016, climate change caused soil high salinity intrusion in the major coconut growing area of
Ben Tre province. Additionally, aging plantations are experiencing declining yields. However, local
farmers also reported that, in recent years, newly planted coconut trees have started producing coconuts,
almost offsetting a drop in production yield from aging trees.
In MY2017/18, sources report that there was less impact from high salinity intrusion into the major
coconut growing areas. Expected favorable weather conditions in major growing areas, coupled with
high farm gate domestic coconut prices due to strong demand from the processing sector, are motivating
local farmers to continue to expand plantation area in the coming years.
Table 8: Historical coconut and copra production
2010 2011 2012 2013 2014 2015 2016 2017 2018
*
2019
*
Coconut plantation
area (thousand ha) 147.
0
155.
0 157.0 158.0 160.6 163.6 165.0 169.7 172.0 175.0
Average coconut
yield (nuts/ha)
5,56
6
6,06
7 6,695 7,820 8,580 8,796 8,917 8,835 8,982 9,149
Coconut production
(million nuts/TMT) 818.
2
940.
4
1,015.
1
1,235.
5
1,374.
4
1,439.
1
1,471.
3
1,499.
2 1,545 1,601
In Copra Production
(Equivalent) (TMT)*
* 146 167 181 220 243 256 262 270 275 285
Coconut Oil
production (MT) n/a
2,74
6 5,973 6,392 7,658 8,522 8,260 8,264 8,500 9,000
Milling Copra
Production for
coconut oil crushing
(TMT)
n/a
4.4
9.5
10.2
13.5
13.1
13.1
13.1
13.5
14.3
Total Estimated
Copra Production
(TMT) n/a 5 10 11 13 13 13 13 14 14
Source: MARD, GSO, Asia Pacific Coconut Community (APCC), *Post estimates
**Note: Estimated Copra equivalent production is at 17.5%-17.8% of total coconut production.
Estimated extraction rate from milling copra to coconut oil is 63 percent.
Table 9: Vietnam’s Approximate Coconut Areas and Production by Provinces
2015 2016 2017*
Province Coconut
Growing
Area
(ha)
Coconut
Production
(million
nuts/TMT)
Coconut
Growing
Area
(ha)
Coconut
Production
(million
nuts/TMT)
Coconut
Growing
Area
(ha)
Coconut
Production
(million
nuts/TMT)
Ben
Tre
68,545 573.1 70,127 594.5 71,000 594.5
Tra
Vinh
20,029
241.4
20,628
250.5
21,495
263.8
Tien
Giang
15,905
117.6
16,207
121.2
17,340
125.2
Binh
Dinh
9,402 100.1 9,364 100.0 9,334 100.5
Vinh 8,028 113.5 8,561 117.0 8,930 120.2
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Long
Ca Mau 7,526 28.6 7,415 29.0 7,328 31.5
Kien
Giang n/a n/a n/a n/a 5,996 29.9
Bac
Lieu 4,580 19.9 4,618 20,3 4,618 20.8
Soc
Trang 3,757 17.5 3,757 17.5 4,086 19.7
Hau
Giang 3,624 18.1 2,562 16.5 2,639 17.2
Quang
Ngai 2,312 13.8 2,314 14.1 2,267 14.9
Tay
Ninh n/a n/a n/a n/a 1,945 47.6
Khanh
Hoa 1,823 7.9 1,839 7.8 1,906 7.6
Can
Tho 2,308 9.8 2,112 9.1 1,872 8.0
Phu
Yen 1,493 20.0 1,404 18.9 1,338 17.7
An
Giang 1,401 24.0 1,271 20.5 1,334 19.4
Others 12,857 133.8 14,121 160.4 6,272 60.7
Total 163,590 1,439.1 166,300 1,477.0 169,700 1,499.2 Sources: Asia Pacific Coconut Community (APCC), Provincial DARDs, MARD, Local industry, Ben Tre Coconut
Association, *GSO, MARD, and Ben Tre Coconut Association
CONSUMPTION
Vietnam continues to produce various coconut products for both food and industrial uses for the export
and domestic markets. Food use coconut products include fresh young coconut and fresh mature
coconuts for immediate consumption and cooking, desiccated coconut, coconut jelly, frozen coconut
Vietnam’s population million persons 92 93 95 96 97
Total domestic vegetable oil consumption
1,000 MT
910
970
990
1,030
1,080
Per capita vegetable oil consumption
Kg/person/year
9.9
10.4
10.4
10.7
11.1
Source: GSO; MOIT; Estimates from local producers and Post
TRADE
Imports of vegetable oils (both crude and refined) will increase to meet increasing demand Vietnam’s vegetable oil industry continues to import both crude and refined oil to meet increasing
domestic and export demands. In MY2016/17, Post estimates total vegetable oil imports at 890 TMT.
Palm oil continues to be the major imported vegetable oil in Vietnam, accounting for 90 percent of the
total.
Post estimates MY2018/19 and MY2018/19 total vegetable oil imports in the 900-910 TMT range at a
growth rate of about one percent, although locally-produced vegetable oil production is expected to
increase due to higher demands of domestic consumption and exports to overseas countries.
Table 23: Total vegetable oil* imports per commodity
Year 2013 2014 2015 2016 2017**
est.
2018**
proj.
2019**
proj.
Total vegetable oil imports (TMT) 705.6 835.9 858.7 867.1 890
900 910
Palm oil 583.1 697.7 715.7 727.2 800 790 790
Soy oil 79.5 81.6 97.8 79.1 30 50 50
Coconut oil 2.4 6.3 2.1 1.7 3 4 6
Rapeseed (Colza) oil 2.8 4.6 3.1 1.6 2 3 4
Other vegetable oils 37.8 45.7 40.0 57.5 55 53 60
Source: GTA; **Post estimates and projections
*Note: Vegetable oils include all crude oils and refined oils