Vietnam: Fast Growing Soy Market

By Barb Baylor Anderson

Vietnam has been one of the fastest growing soybean importers in the world during the last decade, thanks to a rapidly expanding middle class and open market policies. Soy consumption has been climbing and is forecast by USDA in 2018-19 to reach at 5.5 million metric tons.

“Demand over the long-term is expected to grow substantially, as the country’s per capita income continues to increase,” says John Baize, international trade consultant.

While Vietnam is led by a communist government, Vietnam has a relatively market driven economy with a population of 94 million. The U.S. Soybean Export Council (USSEC) notes the expanding middle class there is spilling over from major cities into other provinces and cities.

USSEC officials also note Vietnam has been quick to adopt new technologies and management systems and is willing to accept foreign investment. Total U.S. exports to Vietnam have increased more than nine-fold to $10 billion, which is up 823 percent over the past decade, according to the U.S. Trade Representative. Vietnam is the U.S.’ seventh-largest agricultural export market, and soybeans are imported for both animal feed and human food uses.

USDA reports total U.S. soybean imports into Vietnam in the last marketing year were 1.2 million metric tons and soybean meal imports were 641,000 metric tons, 80 percent and 156 percent year-over-year increases. Vietnam has two operational soybean crushing companies; one with 1,000 metric tons per day capacity and one with 3,500 metric tons per day capacity.

And while long-term prospects for U.S. soybean and meal sales to Vietnam are strong, the short-term presents challenges. Swine feed production has experienced a 30 percent drop due to an outbreak of African Swine Fever (ASF). USDA estimates pork production accounts for most of the total feed market. Baize expects lower demand at least until the disease is controlled.

Vietnam has been quick to adopt new technologies and management systems and is willing to accept foreign investment. USSEC and USMEF have been active in Vietnam to help increase soy and animal protein consumption.Local buyers are more optimistic.  “U.S. soybeans are very popular in Vietnam, alongside helpful U.S. support,” says Bui Kim Thu with Tam Viet Agriculture Co. Ltd. “Since swine herds and feed have decreased, farmers are raising poultry for domestic consumption and export. With increased aquaculture raising and consumption, total feed volume may not be much affected.”

While Vietnam ranks fourth in global pork production, it also is a market for U.S. soy-fed pork. U.S. Meat Export Federation (USMEF) President and CEO Dan Halstrom says Vietnam is a promising market, albeit highly competitive and very price sensitive.

“A much higher percent of consumers in Vietnam buy fresh pork,” adds Joel Haggard, USMEF senior vice president for the Asia Pacific. “Vietnam has had a severe consumption response to ASF. I think it is a spike down and possibly a slow return up, but we will just have to see.”

On the human food front, biotechnology acceptance has not traditionally been a major issue in Vietnam. USSEC officials report the government occasionally raises food safety concerns with biotech soybeans, but importers and consumers are mainly indifferent.

Mongkol Bantharungroj, vice chairman, Thai Corp. International Co., Ltd., was in the U.S. earlier this year, and was pleased to see U.S. soybeans were good quality, clean and uniform in size and color. The company uses soybeans in tofu products, soymilk and other soy drinks.

“People nowadays care much about their health and eat more healthy foods and plant protein. In our company case, we are targeting to distribute and develop retail consumer products,” he says.

With a strong tourism industry, Sabrina Yin, USMEF director in the ASEAN, sees rapid development within Vietnam’s foodservice sector. Between 2010 and 2018, the number of international tourists in Vietnam tripled from five million to more than 15 million. Even more are estimated in 2019, underlining the value of the fast-growing market for U.S. soybean farmers.