Production:

Post's first forecast for Vietnam's MY 2015/16 soybean production is 181 thousand metric tons (TMT) on a forecasted 125 thousand hectares (ha). Soybean competitiveness vis-à-vis corn cultivation remains limited as per hectare revenue for soybean cultivation remains lower than corn cultivation. The major soybean cultivated area is concentrated in the Red River Delta the North of Vietnam.

FAS-Hanoi also revises Vietnam's MY 2014/15 soybean production of 192 TMT to 174 TMT on 120 thousand ha harvested area due to decreased growing areas. Vietnam's MY 2013/14 soybean production decreased 6.1 percent from the previous year to 158 TMT due to reducing yield and smaller harvested area. The scale of soybean production remains small, compared to other crops, and continues to fall far short of domestic demand.

Post remains doubtful that soybean production will increase in the coming years and reach the level that the Government has set for the sector in the Master Plan for Oilseeds, 350 thousand ha and 700 thousand tons by 2020, due to generally low yields and lack of meaningful expansion of growing areas. Competitiveness is a major disincentive to the expansion of the soybean sector overall.

On January 24, 2014, the Ministry of Agriculture and Rural Development (MARD) signed Circular 02/2014 to promulgate the regulatory process for reviewing the safety of agricultural biotechnology for use as food and feed. All biotech traits, including soybean traits, must be certified for safety to be used as food and feed. Regarding commercial cultivation of biotech soybeans in Vietnam, as of yet, the biotech developing companies have not pursued the commercial release of biotech soy in Vietnam. The GOV has, however, approved four corn biotech events for cultivation. This will further reduce the competiveness of soybean cultivation as per hectare revenue for the new corn varieties will also exceed revenue from soybean cultivation.

Soybean production

2012

2013

2014

2015 est.*

2016 est.*

Crop area (thousand ha)

119.6

117.2

110.2

120

125

Crop yield (MT/ha)

1.45

1.44

1.43

1.45

1.45

Total production (TMT)

173.7

168.2

157.9

174

181

Consumption:

Approximately, 80 percent of imported soybeans went to the crushing industry, the remaining 20 percent were for human consumption and direct animal feed. Domestically produced, full fat soybeans are mainly used for the food processing industry (tofu and soymilk) and household-scale soybean oil production. Imported soybeans continue to feed Vietnam's two industrial-scale crushing plants (one in the North and one in the South of Vietnam) to produce soy oil and soybean meals.

Currently, Vietnam's two crushing facilities remain operational with total maximum crush capacity of 4 TMT of soybeans per day. In Calendar Year 2014 (MY 2013/14), total reported crush of the two facilities was approximately 1.24 million metric tons (MMT), about 85 percent of total capacity. The resulting soy products production was 889 TMT soymeal, 235 TMT crude soy oil, 59 TMT soy hulls, and 4 TMT of feed grade Lecithin.

Both facilities anticipate increasing crush in Calendar Year 2015 (MY 2014/15) as prices dynamics keep crush margins positive. Post estimates MY2014/15 crush at 1.3 MMT. Post's forecast for Calendar Year 2016 (MY 2015/16) is 1.35 MMT.

The livestock and aquaculture industries continue to drive the demand for soybeans, and this is driving the further development of the domestic crushing industry. In 2014, of the 14.7 MMT of commercial animal feed production, about 3 MMT (20 percent) was soybean meal, and of the 3.53 MMT of aquaculture feed, about 900 TMT (25 percent) was soybean meal. According to local feed producers, animal and aquaculture feed production continues to grow in 2015 with MARD estimating demand for locally-produced industrial feed at 16.4 MMT, up about 12 percent from 2014. Aquaculture feed demand will grow to 3.6 MMT.

Food use domestic consumption of soybean products (such as soy milk, tofu, soy oil and other drinks using soybeans) continues to grow. Post estimates the growth in food use consumption of soybeans at about 4 percent a year. Post's MY 2014/15 and 2015/16 food use consumption estimates are 365 TMT and 380 TMT, respectively.

Trade:

Imports

In 2014, Vietnam imported about 1,564 TMT of soybeans, of which approximately 45 percent came from the United States, 35 percent from Brazil, and the rest sourced from Argentina, Canada, Paraguay, and other countries. United States became the largest exporter of soybeans to Vietnam, surpassing Brazil. Soybean imports from the United States reached a record of 698 TMT in MY 2013/14, an increase of nearly 26 percent over the previous MY (556 TMT). U.S. market share continues to grow in the Vietnamese soybean market, reaching 45 percent in 2014, up from 44 percent in 2013 and 39 percent in 2012. Overall, soybean import value reached a record $913 million in 2014 over the past three years.

Under the current tariff structure, soybeans enjoy a zero percent tariff for imports from WTO member countries. Post forecasts MY2014/15 soybean imports at 1,600 TMT, based on Post's projections for the operation of Vietnam's crushing plants and demand from the food sector. Post's initial MY 2015/16 import estimate is 1,630 TMT as the growth in imports slows as the crushing facilities near their respective crushing capacities. Any expansion in crush capacity, either by expanding existing plants or the construction of new plants, will result in large increases in soybean imports.

Soybean imports by source

Country

2012

2013

2014

Quantity (TMT)

Value

(million $)

Quantity

(TMT)

Value

(million $)

Quantity

(TMT)

Value

(million $)

Total Imports:

1,462.71

$ 844.8

1,261.7

$ 703.63

1,564

$ 913.2

USA

576.75

333.3

555.5

318.62

697.8

402.61

Brazil

584.57

345.3

571.1

307.96

538.8

305.28

Argentina

98.96

62.8

66.03

35.42

151.6

76.86

Canada

122.39

66.5

38.5

24.51

65.3

40.97

Paraguay

57

26.6

10

5.1

56.5

24.99

Others

23.03

10.3

20.54

12.11

54

62.49

Soybean imports by month in 2014

Volume (TMT)

Value (million $)

Total Imports:

1,564

913.2

Dec. 2014

169

89

Nov. 2014

117

61.6

Oct. 2014

110

62.7

Sept. 2014

65

39.2

Aug. 2014

120

64.6

July 2014

86

66.9

Jun. 2014

160

97.1

May 2004

127

75.8

April 2004

169

98.8

Mar. 2014

241

140.6

Feb. 2014

41

24.7

Jan. 2014

159

92.2

Prices

Vietnam's average import price for soybeans in 2014 was $592/MT, about a 9 percent drop from the previous year ($649/ MT). Local traders forecast that soybean import prices will continue to drop in 2015 due to strong supply in the world market and lower world gas/oil prices leading to lower cost of transportation. Import prices for grade 2 full fat soybeans were quoted $476 and $479 per MT, CNF Ho Chi Minh City and CNF Hai Phong, respectively, for shipments in April 2015; and $430 per MT CNF Cai Lan for shipment in April 2015, indicating a further drop in prices in early 2015 compared to 2014.

Import Tariffs

The tariff rate applied to soybeans (HS Code: 1201) imported from countries having Most Favored Nation (MFN) status with Vietnam remains 0 percent. The most updated tariff rates for other trade agreements are listed in Table:

Soybean import tariffs (%)

HS code

Description

MFN

ATIGA

ACFTA

AKFTA

VJEPA

AJCEP

AIFTA

AANZFTA

VCFTA

1201.00.10

- Suitable for sowing

0

0

0

0

0

0

0

0

0

1201.00.90

- Other

0

0

5

0

2

5

3

5

5

1201

Soybeans, whether or not broken

Notes:

  • MFN: Most Favored Nation
  • ATIGA: ASEAN Trade In Goods Agreement
  • AANZFTA: ASEAN-Australia-New Zealand Free Trade Agreement
  • AIFTA: ASEAN-India Free Trade Agreement
  • VJEPA: Vietnam-Japan Economic Partnership Agreement
  • AJCEP: ASEAN Japan Comprehension Economic Partnership
  • ACFTA: ASEAN China Free Trade Agreement
  • AKFTA: ASEAN Korea Free Trade Agreement
  • VCFTA: Vietnam-Chile Free Trade Agreement
  • VAT: Value Added Tax

Policy

Vietnam scraps 5 percent value added tax (VAT) on agricultural products, including imported feed ingredients

Vietnam has abolished the 5 percent VAT on agricultural products, including imported feed ingredients as of January 1, 2015. Eliminating the VAT lowers the landed cost of feed imports from all countries.

Vietnam's Production, Supply & Demand Table for Soybeans

Oilseed, Soybean

2013/2014

2014/2015

2015/2016

Market Begin Year

Jan 2014

Jan 2015

Jan 2016

Vietnam

USDA Official

New post

USDA Official

New post

USDA Official

New post

Area Planted

130

125

0

125

0

125

Area Harvested

130

110

0

120

0

0

Beginning Stocks

166

166

0

193

0

187

Production

190

158

0

174

0

181

MY Imports

1,500

1,564

0

1,600

0

1,630

MY Imp. from U.S.

700

698

0

750

0

800

MY Imp. from EU

0

0

0

0

0

0

Total Supply

1,856

1,888

0

1,967

0

1,998

MY Exports

0

0

0

0

0

0

MY Exp. to EU

0

0

0

0

0

0

Crush

1,250

1,235

0

1,300

0

1,350

Food Use Dom. Cons.

350

350

0

360

0

370

Feed Waste Dom. Cons.

100

110

0

120

0

130

Total Dom. Cons.

1,700

1,695

0

1,780

0

1,850

Ending Stocks

156

193

0

187

0

148

Total Distribution

1,856

1,888

0

1,967

0

1,998

1000 HA, 1000 MT

Vietnam's Soybean Import Matrix

Country

Vietnam

Commodity

Soybeans

Time Period

Jan-Dec

Units:

MT

Imports for:

2013

2014

U.S.

555,519

U.S.

697,778

Others

Others

Brazil

571,112

Brazil

538,766

Argentina

66,032

Argentina

151,633

Canada

38,493

Canada

65,303

Ukraine

32,223

Paraguay

56,525

Paraguay

10,065

Total for Others

717,925

812,227

Others not Listed

17,600

53,995

Grand Total

1,291,044

1,564,000