Report Highlights: 

MY 2013/2014 wheat consumption is estimated at 1.85 million tons, an increase from MY 2012/2013 due to the likely the use of more feed wheat in the aquaculture feed industry. MY 2014/2015 wheat consumption is forecast to increase 100,000 tons due to the greater demand for feed wheat, following the growth of the feed industry, and milling wheat. Post revises Vietnam’s wheat imports in the MY 2013/2014 to 2.03 million tons. U.S. wheat has kept a stable increase due to the increased demand for high quality wheat-based products. 

Post revises Vietnam’s MY 2013/2014 corn production estimate to 5.29 million tons, about 100,000 tons higher than Post’s last forecast. This is due to a larger planted area with the same crop yield assumption. Post estimates corn import volume in MY 2013/2014 to be at 2.27 million tons compared to USDA’s official number of 2.20 million tons, due to the increased import volume of corn from Brazil. The import corn volume forecast for MY 2014/2015 is revised to 1.9 million tons, compared to USDA’s official number of 2.0 million tons, likely due to expected larger local corn production. 

Post estimates total rice production for MY 2013/2014 to reach 45.06 million tons of paddy rice, an increase of about 600,000 tons compared to Post’s last estimate in March 2014. This is about 200,000 tons of paddy higher than USDA’s official number due to the estimated higher yield in the Spring and Autumn crops (despite a slightly smaller harvested area of Spring crop). 

MY 2013/2014 rice exports is expected to remain at 6.5 million tons due to expected strong competition from Thailand, India, Pakistan and other new exporters such as Cambodia and Myanmar. MY 2014/2015 rice exports are forecast at 6.7 million tons, up 200,000 tons compared to MY 2013/2014. 

WHEAT 

PRODUCTION 

Vietnam does not produce wheat. 

CONSUMPTION 

MY 2013/2014 wheat consumption is estimated at 1.85 million tons, a 100,000 tons increase from MY 2012/2013 due to the likely the use of more feed wheat in the aquaculture feed industry. 

MY 2014/2015 wheat consumption is forecast to increase 100,000 tons due to the greater demand for feed wheat, following the growth of the feed industry, and milling wheat. 

Post estimates the consumption of milling wheat in MY 2013/2014 to remain unchanged compared with MY 2012/2013, at 1.5 million tons, due to a slump in the economic growth situation. In the big cities such as Ho Chi Minh, Ha Noi, and Da Nang, the consumption of high quality wheat-based products introduced by many fast food chains recently introduced into Vietnam, such as McDonalds, Dunkin Donuts, and Burger King, helps increase the use of high quality wheat, including U.S. wheat. However, Vietnam’s overall consumption is expected unchanged compared with MY2012/2013. 

Typically, feed wheat’s share of total feed consumption was usually about 15-20 percent, mainly used for aquaculture feed, both as an ingredient and a binding agent for the feed. Feed wheat, however, has recently been an alternative source for other animal feeds, in lieu of corn, cassava, and broken rice, based on its price competitiveness. Feed wheat imported and consumed in MY 2013/2014 increased due to its price competitiveness by the end of MY 2013/2014. 

TRADE / COMPETITION 

Import 

Post revises Vietnam’s wheat imports in the MY 2013/2014 to 2.03 million tons. Vietnam’s wheat imports for MY 2012/2013 were revised to 1.65 million tons, mainly due to less imported feed wheat. 

Australian milling wheat is expected to continue dominating the wheat import market in Vietnam, accounting for over 70-80 percent of Vietnam’s total wheat import volume in MY 2012/2013. U.S. wheat has kept a stable increase due to the increased demand for high quality wheat-based products. India, as a seasonal supplier, successfully exported more than 100,000 tons to Vietnam in MY 2013/2014. 

Feed wheat was imported partly from Australia, and Black sea and other East European countries. The drop of feed wheat prices brought more feed wheat into Vietnam by the end of the MY 2013/2014, when the selling prices were $240-245 per ton compared to $330-340 per ton during December 2013 – January 2014. 

Export 

Vietnam has recently exported wheat to neighboring countries in South East Asia. Thailand is the biggest importer of Vietnamese flour. According to traders, wheat flour from Vietnam exported to Thailand is mainly a competitively priced, low quality product, and mainly supplied as an ingredient for the aquaculture industry, with some small quantities for the instant noodle industry. Vietnam exports of wheat flour to other countries like Indonesia, Malaysia, and the Philippines are mainly for the feed industry, while exports to Singapore, Hong Kong and Taiwan are for the food processing industry and/or re-selling to other countries. Export of Vietnamese wheat flour is estimated at 115,000 tons, wheat equivalent quantity, for MY 2013/2014, nearly the same volume as MY 2012/13 due to the aquaculture industry demand in neighboring countries. 

CORN 

PRODUCTION 

Post revises Vietnam’s MY 2013/2014 corn production estimate to 5.29 million tons, about 100,000 tons higher than Post’s last forecast. This is due to a larger planted area with the same crop yield assumption. The production is estimated about 500,000 tons higher compared to MY 2012/2013. 

As of October 15, 2014, the southern provinces finished their MY 2013/2014 corn crop with total harvested area reported at more than 415,000 hectares -- about 27,000 hectares smaller than MY 2012/2013. The Northern provinces also completed their first corn crop (Autumn crop) with a total harvested area about 675,000 hectares, about 10,000 hectares more compared to the previous crop. Some Northern provinces planted their second crop (Winter crop) with the total planted area reaching 108,000 hectares, about 48,000 hectares more compared to the MY 2012/2013 crop. The total Vietnam MY 2013/2014 corn harvested area is estimated at 1.195 million hectares. 

On July 31, 2014, The Ministry of Agriculture and Rural Development (MARD), Minister Cao Duc Phat signed the Decision 3367/QD-BNN-TT, regarding the approval of the master plan for crop restructuring on paddy land in the period from 2014 to 2020. The Decision 3367 states that the change from rice to other crops shall be based on the market demand; MARD expects 260,000 hectares to be converted to other crops by 2015, with the total area shifting to other crops reaching 510,000 hectares by 2020. MARD indicates that corn cultivation is the most appropriate substitute for rice, accounting for 30 percent of the converted rice area in 2015 and 2020. Soybeans, sesame, and vegetables are also estimated to increase in area as a result of this plan. Post revises the forecast for corn planted area in MY 2014/2015 from 1.2 million hectares to 1.25 million hectares based on the MARD plan. 

On August 11, 2014, following a near six month regulatory review, the Minister of Agriculture and Rural Development (MARD) signed the first four Certificates for Food and Feed Safety for four genetically modified corn traits. Additionally, on August 27, 2014, following just over a year review; the Minister of Natural Resources and Environment (MONRE) issued the first Biosafety Certificate to one of the four corn traits approved by MARD on August 11. The trait approved by MONRE will be able to be commercially grown in Vietnam, following variety registration. 

CONSUMPTION 

In Vietnam, corn is used as the main source of energy for the animal feed industry, for food use as corn starch, and for limited use by other industries like beer, textiles, and the pharmaceutical industry. However, more than 80 percent of corn is used as feed ingredients. 

In the animal feed industry, corn is used in both the commercial and home-made sectors, mainly for hog and poultry feeds. Corn use is expected to increase to meet the livestock sector’s growth, and predominantly comes from imported sources, at least for the time being and in the near future, because local corn production is not able to keep up with the fast growing demand of the animal feed industry. Currently, the feed industry needs about 2.0-2.5 million tons of imported corn to satisfy its demand. However, the real imported volume depends greatly on the availability other alternative local products like broken rice, rice bran, and cassava, and the price competitiveness of imported feed wheat and DDGS. The annual increase of corn use both for food and feed is about 200,000 – 400,000 tons, depending on the above mentioned factors. 

TRADE / COMPETITION 

Competition exists between the home-made feed and manufactured feed sectors in Vietnam. Commercial feed manufacturers usually can only source up to 50 percent of of their corn input demand from locally produced corn. 

Additionally, corn growers do not typically have appropriate storage facilities. Farmers must sell their product quickly after the harvest, which will continue to make local corn prices prone to seasonal fluctuations. 

Corn has competition from other feed ingredient sources. Cassava, feed grade wheat, and broken rice are among the main alternatives to corn. In recent years, rice and cassava have been more focused on export markets and fell short of supplying the domestic animal feed industry. Imported feed wheat is a very good alternative for imported corn when feed wheat prices become competitive. According to traders, feed wheat becomes competitive when the price per ton does not exceed the corn price by more than $10. 

There is a strong competition between locally grown corn and imported corn. The local corn price was lower than that of imported corn in the first 5 months of calendar year 2014, which helped maintain the solid profit margin for local growers, and also boosted a larger planted area locally. However, imported corn prices dropped even lower than local prices after May 2014, which enticed traders to import more corn from the U.S. and Brazil. Local corn growers suffered from the low selling price from their newly expanded area. 

IMPORT / EXPORT 

Post estimates corn import volume in MY 2013/2014 to be at 2.27 million tons compared to USDA’s official number of 2.20 million tons, due to the increased import volume of corn from Brazil. 

The import corn volume forecast for MY 2014/2015 is revised to 1.9 million tons, compared to USDA’s official number of 2.0 million tons, likely due to expected larger local corn production. 

U.S. corn export to Vietnam dropped to nearly zero volume in MY 2012/2013 due to non-competitive prices. The export volume reached 509,000 tons in MY 2013/2014 due to its attractive prices by end of calendar year 2013 and early 2014. Post forecasts U.S. corn exports to Vietnam at 500,000 tons for TY 2014/1015. 

India was the top corn exporter to Vietnam in MY 2012/2013 with a total volume of 1.26 million tons. Brazil, however, became the biggest supplier in MY 2013/2014, exporting over 0.9 million tons. The sizable volume of Indian and Brazilian corn was exported into Vietnam with very low prices compared to other sources, which resulted in Vietnam’s total corn supply for MY 2013/2014 to increase by about 33 percent over MY 2012/2013. 

Reportedly, Vietnam exported some volume of its locally produced corn to China via border trade. There is no official data on the total volume. Based on input from trade sources, Post revised Vietnam’s exports to 400,000 tons for MY 2013/2014, due to reports of local corn exports to China... It is likely that higher quality imported Brazilian corn was substituted for the locally-produced corn that was exported. 

RICE 

PRODUCTION 

Estimate for MY 2013/2014 (began January 2014) 

Post estimates total rice production for MY 2013/2014 to reach 45.06 million tons of paddy rice, an increase of about 600,000 tons compared to Post’s last estimate in March 2014. This is about 200,000 tons of paddy higher than USDA’s official number due to the estimated higher yield in the Spring and Autumn crops (despite a slightly smaller harvested area of Spring crop). 

Spring Crop 

The Vietnam total harvested area for the MY 2013-2014 spring crop was slightly smaller (by about 30,000 hectares) than Post’s estimate in March 2014 and that of MY 2012-2013. The decrease happened mainly in the Mekong River Delta (MRD), due to growers’ expectations of strong competition from other exporting countries. The overall yield of the MY 2013/2014 spring crop, however, has not only offset the smaller area but also brought the production to 20,75 million tons of paddy, about 500,000 tons higher than that of the MY 2012-2013 spring crop, and about 340,000 tons more than Post’s estimate in March 2014. 

Autumn Crop 

The majority of planting of autumn crop is mainly in the southern provinces. The MRD, in specific, accounts for more than 80 percent of the total autumn crop planting area. 

The overall Vietnam harvested area for the MY 2013/2014 autumn crop is estimated to decrease by about 25,000 hectares, compared to the MY 2012/2013 autumn crop, in part due to the impact of MARD’s policy, which encourages farmers to plant alternative crops such as corn and soybean in those areas where there is insufficient water to carry out a good crop of rice. 

Winter Crop 

Post estimates no change for the winter crop production compared with the last estimate in March 2014. The harvested area for the winter crop is estimated to decrease by about 20,000 hectares in MY 2013/2014 compared with MY 2012/2013. The decreased are is going to happen mainly in the Mekong River Delta where the winter crop is no longer considered one of the main crops due to its lower yield than other crops and longer crop cycle, which also make it more susceptible to pests and diseases. 

Forecast for MY 2014/2015 

Post forecasts MY 2014/2015 rice production at 45.19 million tons with expected higher yield in the spring and autumn crops -- the two main rice crops in the Mekong River Delta. This higher yield trend will help offset the smaller production area of the winter and autumn crops in this area. 

Mekong River Delta (MRD) Rice Production in the MY 2012/2013 

Spring Crop 

According to the Vietnam Ministry of Agriculture and Rural Development (MARD), Mekong River Delta (MRD) farmers have harvested about 1.56 million hectares of their MY 2013/2014 spring crop, a drop of about 37,000 hectares compared to MY 201/2013, due to some farmers’ intentions to plant a smaller area to avoid strong competition from other rice exporting countries, especially Thailand. However, the revised estimate for spring crop production for the MRD is 11.19 million tons of paddy, up by about 150,000 tons from the MY 2012/2013 and about 100,000 tons more than Post’s estimate in March 2014, due to apparently higher crop yield. 

Autumn Crop and Winter Crop 

The autumn crop is mainly located in the southern provinces. The MRD typically accounts for more than 80 percent of the total autumn crop planting area. The MRD Autumn crop includes a main autumn crop and a late autumn crop. The late autumn crop is planted shortly after the harvest of the main crop, where the land elevation is high enough to avoid the annual flooding coming into the delta. 

On July 31, 2014, the Ministry of Agriculture and Rural Development (MARD), Minister Cao Duc Phat signed the Decision 3367/QD-BNN-TT, regarding the approval of the master plan for crop restructuring on paddy land in the period from 2014 to 2020. The Decision 3367 states that the change from rice to other crops shall be based on the market demand, utilizing the advantages of land, water, climate, and weather associated with commodity production and concentrating on efficiency and sustainability. The Decision’s Appendix outlines the estimated area that is expected to shift out of rice production and into other crops by 2015 and 2020. MARD expects 260,000 hectares to be converted to other crops by 2015, with the total area shifting to other crops reaching 510,000 hectares by 2020. The shift is primarily focused in the Mekong River Delta. MARD indicates that corn cultivation is the most appropriate substitute for rice, accounting for 30 percent of the converted rice area in 2015 and 2020. Soybeans, sesame, and vegetables are also estimated to increase area as a result of this plan. 

Under the MARD plan, Post estimates the MRD total harvested area for the MY 2013/2014 autumn crop at 2.47 million hectares, down 20,000 hectares compared with the 2.49 million hectares of the MY 2012/2013. The drop happened in the main autumn crop. These 20,000 hectares are planted with either corn or soybeans. According to a MARD report, however, the planting for the MY 2013/2014 late autumn crop is still about the same size with that of MY 2012/2013, showing that the program is very challenging as it planned. 

As of October 15, 2014, the harvested area for MY 2013/2014 main autumn crop was completed with 1.68 million hectares, a drop of 20,000 hectares compared to MY 2012/2013 main autumn crop. The late autumn crop is estimated about the same size with MY 2012/2013 due to higher demand from the market and farmers found that it is not more profitable to switch to other crops than rice. 

CONSUMPTION 

Post estimates the additional local rice consumption is limited to a volume of 500,000 tons more per year. This includes about 150,000 tons used for direct staple food, 50,000-100,000 tons for food processing, and 200,000-300,000 tons for the feed industry. 

STOCK 

There is no official number for Vietnam rice stocks. Rice stocks are calculated from the total of rice production, previous carry over stocks, and imports after deducting export and consumption and residual. Rice stocks in MY 2013/2014 went down sharply to 624,000 tons from 863,000 tons in MY 2012/2013, due to the increase of rice consumption and residual. The ending stocks will be very low if Vietnam exports a high volume of rice. 

Exports 

MY 2013/2014 rice exports is expected to remain at 6.5 million tons due to expected strong competition from Thailand, India, Pakistan and other new exporters such as Cambodia and Myanmar. MY 2014/2015 rice exports are forecast at 6.7 million tons, up 200,000 tons compared to MY 2013/2014. 

Imports 

Vietnam imports rice mostly from Cambodia, with a small volume of sticky rice coming from Laos. Most of Cambodia’s shipments occur around the beginning of the calendar year, immediately after its main crop is harvested. In Vietnam, imported paddy is used for local consumption after processing, since most of the rice grown in the Mekong River Delta is purely for export. Vietnamese farmers also have paddy rice investments in Cambodia for additional rice production, which is used mostly for local consumption in Vietnam. However, official data for rice imports from Cambodia is apparently not available. 

Post estimates that MY 2013/2014 rice imports from Cambodia totaled 300,000 tons, given very thin carry-over stocks from MY 2012/2013. Rice imports from Cambodia are forecast to increase to 400,000 tons in MY 2014/2015