Highlights

In Marketing Year (MY) 2015/16 the U.S. overtook Brazil to reclaim its position as the largest exporter of soybeans to Vietnam due to more competitive prices. U.S. exports reached a record level of 863.3 thousand metric tons (TMT), an increase of 31 percent in volume. For MY 2016/17 (CY 2017), U.S. soybean exports are expected to increase to about 900 TMT. In MY 2015/16, total soybean meal (SBM) imports were 5.09 million metric tons (MMT), an increase of about 11 percent over the previous year (4.58 MMT) due to increasing demand from the animal and aquaculture feed industries, and food industry. The feed sector continues to grow, keeping pace with development in the livestock and aquaculture sectors, and Post forecasts 2017 and 2018 SBM imports to increase, to 5.15 MMT and 5.2 MMT.

Executive Summary

Vietnam’s oilseed production continues to fall well below demand from the food industry and the livestock and aquaculture feed sectors due to low yield and strong competition from other field crops, such as corn. Soybean production will not significantly increase in the coming years due to generally low yields and lack of meaningful expansion of growing areas.

Total imports of soybeans in 2015/16 were 1.6 MMT, a drop of 6.2 percent from the previous year due to the decline in operations at the crushing plant in Northern Vietnam. In MY 2015/16, the United States overtook Brazil to become the largest exporter of soybeans to Vietnam, capturing a 53.9 percent market share. U.S. soybean exports to Vietnam during this time were 863.3 TMT, an increase of 31 percent in volume over the previous year.

In MY 2015/16, Vietnam imported about 5.09 MMT of SBM and soy flour, an increase of about 11 percent over the previous year (4.58 MMT) due to increasing demand for protein from the animal feed sector and food industry. In 2016, total U.S. SBM exports to Vietnam were 211 TMT, accounting for a four percent market share. This was a drop from seven percent in the previous year (319 TMT). In MY 2015/16, soybean flour (HS Code 120810) accounted for approximately 94 percent of U.S. SBM exports to Vietnam. Post projects soy flour imports will increase in 2017 as demand from the food processing sector continues to grow due to population growth and rising incomes. Post forecasts 2017 and 2018 total SBM imports to increase slightly to 5.15 MMT and 5.2 MMT, respectively, given rising demand from the food and feed industries.

Vietnam continues to rely heavily on imported crude and refined vegetable oils to meet consumer demand, although domestically produced crude soybean oil has been available in the country since 2011. In 2016, Vietnam produced about 195 TMT of crude soy oil from commercial crushing facilities, but continued to import an estimated 808 TMT of crude and refined vegetable oils to meet local consumption and regional export demand. Post forecasts that total 2017 vegetable oil imports will rebound to the 850-880 TMT range due to the operation of a new vegetable oil manufacturing facility in Vietnam. Vietnam’s exports of all types of vegetable oil and animal fat in 2016 were an estimated 111 TMT, of which crude and refined soy oil accounted for 14.9 percent, while palm oil, copra oil and other products accounted for 85 percent. Post estimates soy oil exports will slightly increase in both MY 2016/17 and MY2017/18 and will be in the range of 20-22 TMT.

OILSEED SECTION

Commodities:

Oilseed, Soybean

Production:

Post’s first forecast for Vietnam’s MY 2017/18 soybean production is 168 TMT on a projected 105,000 hectares (ha). FAS-Hanoi also has revised its estimate for Vietnam’s MY 2016/17 soybean production, down from 161 TMT to 157 TMT on 100,000 ha harvested area due to decreased growing areas.

Vietnam’s MY 2015/16 soybean production was at 148 TMT on 94,000 ha, a drop of 6.7 percent in production area compared with the previous year, but Post notes a slight increase in total production due to higher yield soybean varieties. The continuing decline in soybean growing areas (such as occurred in the Northern Provinces of Thai Binh, Nam Dinh, Hanoi, Ha Nam,and Vinh Phuc) is a result of Vietnamese farmers switching to more profitable crops such as corn. In general, the scale of soybean production remains small when compared to other crops, and continues to fall far short of domestic demand. Additionally, Post remains doubtful that soybean production will increase in the coming years and be able to meet the 2020 targets of 166 thousand ha of soybean production and 265 TMT set by the Government in its “Plan for Agricultural and Rural Development for the Period 2016-2020”. Post forecasts this lack of expansion due to generally low yields, a lack of meaningful increase in growing areas, and competitiveness with other crops continuing to act as a major disincentive to farmers.

Regarding commercial biotech soybean cultivation, biotech developers have not pursued the commercial release of biotech soy in Vietnam. MARD’s Crop Production Department (CPD) has recently approved 17 biotech corn varieties for growing in Vietnam. These approvals follow the first three biotech corn varieties permitted for cultivation in March 2015. This further reduces the competiveness of soybean cultivation as revenue from new corn varieties (including biotech varieties) exceeds revenue from soybean cultivation.

Consumption

Domestically-produced, full-fat soybeans are mainly used in food processing (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) to produce soy oil and soybean meal. In Calendar Year 2016 (MY 2015/16), the total reported combined crush of the two facilities was approximately 993 TMT, about 65 percent of total capacity, and a 13 percent drop from the previous year’s level due to an ongoing reorganization in the Northern facility’s operations. The resulting total about six TMT of feed grade Lecithin.

The crushing facility in the South anticipates the volume of crushing to remain the same as the previous year or slightly increase in MY 2016/17 as price dynamics keep crush margins positive and a new fermented soybean meal plant in the North fuels additional demand for soybean meal. In addition, the crushing plant in the South may extend their production capacity by installing an additional crushing line of 4,000 MT of soybeans per day by the end of 2017 which would start operating by 2018. Additionally, on January 9, 2017, Dabaco Group commenced the construction of a new crushing plant in the Tan Chi Industrial Park, Tien Du, Bac Ninh Province (in Northern Vietnam) with a crushing capacity of 1,000 MT soybeans per day producing close to 70 million liters of soy oil and about 270 TMT of soybean meal per year, which is expected to come into operation in March 2018. This new crushing plant in the North and the new extended crushing operation in the South could increase demand for imported soybeans in the coming years.

Demand for soybeans used in the food processing industry is also increasing and Post estimates the MY 2016/17 crush at 1.05 MMT. Post’s forecast for the Calendar Year 2018 (MY 2017/18) crush is 1.10 MMT as the need for soybean meal in Vietnam’s livestock sector will drive overall demand higher.

The livestock and aquaculture industries continue to drive the demand for feed and soybeans, and will motivate further development of the domestic crushing industry. In 2016, of the total 20.2 MMT of commercial animal feed production, about four MMT (20 percent) was soybean meal, and of the 3.1 MMT of aquaculture feed, about 775 TMT (25 percent) was soybean meal. Animal feed production will continue to grow in 2017, potentially up to 24 MMT.

However, as the total current capacity of Vietnam’s animal feed plants in the country is currently about 31 MMT, the MARD Minister has recently instructed a slowdown in the growth of the animal feed and swine production sectors. Vietnam’s pig herds will still experience positive growth in 2017 compared to the previous year, but this rate will be only around 2.8 percent (a slowdown when compared with 2016’s rate of 4.8 percent). The slower pig herd growth rate in Vietnam is mainly due to the consecutive decline in hog prices during the second half of 2016, negatively affecting pig-raising, as well as the demand for reproduction. MARD estimates that aquaculture feed demand will grow to over 3.5 MMT in 2017 and to 5.6 MMT by 2020. Food use domestic consumption of soybean products (such as soy milk, tofu, and other drinks using soybeans) also continues to grow. Post estimates annual growth in the food use consumption of soybeans at about 7-7.5 percent. Post’s MY 2016/17 and 2017/18 food use consumption estimates are 430 TMT and 460 TMT, respectively.

Recently, a small volume of soybeans has been exported to neighboring countries. Post estimates about 1 TMT of soybeans were exported in 2016, and exports should continue around this same amount over the next several years.

Trade:

Imports

In MY2015/16, Vietnam imported about 1.6 MMT of soybeans, of which approximately 54 percent came from the United States (an increase from a level of 39 percent in the previous year), 21 percent from Brazil, with the remainder sourced from Canada, Argentina, Paraguay, Uzbekistan, Cambodia, Philippines, and other countries.The United States overtook Brazil to reclaim its position as the largest exporter of soybeans to Vietnam due to more competitive prices. Soybean imports from the United States were 863.3 TMT (valued at $349 million) in MY 2015/16, an increase of about 31 percent in volume and around 29.5 percent in value from the previous MY (660 TMT and $269.4 million). Overall, the soybean import volume dropped by 6.2 percent from the previous year (1.7 MMT) due to the decline in operations at the crushing plant in Northern Vietnam. The Soybean import value was $653 million in 2016, a significant drop of 14.5 percent from the previous year ($764 million) and 28.5 percent from 2014’s record level of $913 million due to the deep decline in global prices. Under the current tariff structure, soybeans still enjoy a zero percent tariff for imports from World Trade Organization (WTO) member countries, while the tariff rate for soybean meal remains at two percent.

Post forecasts MY 2016/17 soybean imports at 1.7 MMT, based on its projections for increasing demand from the livestock and aquaculture feed industries for fresh full fat soybean meals (FFSBM), a potential slight increase in the operations of Vietnam’s crushing plant, and expanding demand from the food processing sector. Post’s initial MY 2017/18 import estimate is 1.75 MMT due to the expected operation of another new crushing plant in Northern Vietnam. Any expansion in crush capacity, either by expanding existing plants or the construction of new ones, will result in large increases in soybean imports.

In Fiscal Year 2016 (October 2015-September 2016), USDA’s Export Credit Guarantee Program (GSM-102) continued to support soybean exports to Vietnam. While overall usage of the program remained limited, GSM-102 transactions for soybean exports continued to dominate GSM-102 program usage in Vietnam, accounting for 99 percent of total exports financed by GSM-102

Prices

Vietnam’s average import price for soybeans in 2016 was $414.58/MT, a 7.5 percent drop from the previous year ($447.95/MT). Local traders forecast that soybean import prices will be at higher levels in 2017 due to a lower supply in the world market caused by the reduced harvests in Argentina, Bolivia, Uruguay and the United States more than offsetting forecast gains in Brazil, China, Ukraine and Russia. Currently, import prices for grade 2 full fat soybeans were quoted at $435.8 and $439.5 per MT, CNF Ho Chi Minh City and CNF Hai Phong, respectively, for shipments in May 2017, an increase of 9.2 percent and 9.9 percent, respectively from the same time the previous year ($399 and $400, respectively).

Policy

MARD approvals of agricultural biotechnology for use as food and feed. As of December 2016, MARD has received 42 genetic engineered (GE) event dossiers and has issued 18 certificates for use as food and feed events, all of which were for soybean and corn. The remaining 24 GE events for soybean, corn, cotton, canola, sugar beet, and alfalfa are still under review.

Vietnam’s plant variety protection status

Since joining the International Union for the Protection of New Varieties of Plants (UPOV) in 2006, Vietnam has issued plant variety protection certificates for 380 crop varieties belonging to 107 plant species, including five soybean varieties, eight peanut varieties, and three coconut varieties (mostly local varieties). As of March 15, 2017, there are 976 applications for plant variety protection in Vietnam. Since December 24, 2016, all crop varieties/species can apply for plant variety protection in Vietnam. This factor could motivate Vietnamese scientists to continue researching improved varieties, including soybeans and other oilseeds.

Import Tariffs

According to Decree 122/2016/ND-BTC dated September 1, 2016, the tariff rate applied to soybeans (HS Code: 1201) imported from countries having a Most Favored Nation (MFN) status with Vietnam remains zero (0) percent.

Oilseed, Soybean

Oilseed, Soybean

2015/2016

2016/2017

2017/2018

Market Begin Year

Jan 2016

Jan 2017

Jan 2018

Vietnam

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Planted

120

94

120

100

0

105

Area Harvested

110

94

115

100

0

105

Beginning Stocks

306

306

333

512

0

718

Production

161

148

165

157

0

168

MY Imports

1546

1602

1750

1700

0

1750

MY Imp. from U.S.

650

863

700

900

0

950

MY Imp. from EU

0

0

0

0

0

0

Total Supply

2013

2056

2248

2369

0

2636

MY Exports

0

1

0

1

0

1

MY Exp. to EU

0

0

0

0

0

0

Crush

1150

993

1400

1050

0

1100

Food Use Dom. Cons.

380

400

400

430

0

460

Feed Waste Dom. Cons.

150

150

170

170

0

190

Total Dom. Cons.

1680

1543

1970

1650

0

1750

Ending Stocks

333

512

278

718

0

835

Total Distribution

2013

2056

2248

2369

0

2586


Commodities:

Oilseed, Peanut

Production:

Peanuts are cultivated extensively in Vietnam due to a suitable tropical climate and favorable soil conditions throughout the country. The largest production areas are located in the Southeast region (Quang Nam, Quang Ngai, Binh Dinh, and Binh Thuan provinces). Vietnamese producers continue to improve the quality of domestic peanuts through research to select the most productive variety suited to each province’s specific growing conditions. Vietnam cultivates a wide range of peanut varieties, including V79, 4329, 1660, LVL, TB-25, L14, and L26. Although peanuts are cultivated throughout Vietnam, production is mainly fragmented, local, and small-scale, limiting the domestic industry’s ability to keep pace with the growth of domestic consumption, especially in the food processing sector.

Peanut production in MY 2015/16 was estimated at 441.4 TMT, marking the tenth straight year in a row of decline due to a 4.4.percent decrease in the total planting area for peanuts which more than offset an increase in yield (2.2 percent over the previous year). Post accounts this ongoing decline in acreage to farmers switching from peanuts to other more profitable crops, such as cassava, corn, and sweet potato, in the Southern provinces of Quang Ngai, Binh Thuan, Dak Lak, and Phu Yen provinces.

Despite this decline, Post forecasts an increase in Vietnam’s estimated growing area for MY 2016/2017 to 195,000 ha with production rising to 451 TMT. The expansion in growing area is expected to take place in major provinces such as Quang Nam and Binh Dinh in response to increased domestic demand. In addition, Post forecasts that improvements in peanut varieties will also boost yield and production. Post forecasts growth to continue in MY 2017/18, with peanut production increasing to 462 TMT, nearing its 2012 levels as cultivated area rebounds.

Consumption:

Post estimates Vietnam’s MY 2015/16 domestic consumption of peanuts (in-shell basis) was 760 TMT. For MY 2016/17 and MY 2017/18, Post estimates peanut consumption will continue to increase at 810 TMT and 850 TMT, respectively. The majority of peanuts, locally produced and imported, are used in the snack and confectionery industries with a small amount used in-shell for household consumption, extruded for cooking oil, or exported.

Raw peanut domestic consumption in Vietnam is approximately broken down as follows: 50 percent in food processing, 13.5 percent in food service, and 36.5 percent through the retail sector. Processed peanuts are more popular and convenient in Vietnam, with a diverse range of products, such as traditional roasted peanuts and peanuts coated with salt, wasabi, milk, spices, coconut, and chocolate. Roasted peanuts are also one of the main ingredients in confectionery and baked goods. Peanut retail sales are expected to rise as Vietnam’s peanut retail market continues to expand.

Trade:

Imports

Vietnam’s total peanut imports (in-shell equivalent) were 339.3 TMT in MY 2015 an increase of 89 percent over the previous year (180 TMT). Although transshipments may have accounted for some of this jump in imports, growth in Vietnam’s food processing sector, especially in the snack food industry, has also increased demand for materials. The Vietnamese snack food industry uses both in-shell and shelled imports, mainly from India, the United States, Senegal, Hong Kong, Brazil, and Argentina. The Ministry of Industry and Trade (MOIT) forecasts Vietnam will continue to import a high volume of peanuts over the next several years to meet growing demand in the food processing industry, especially in the confectionary and snack food sectors. Post forecasts imports to be 370 TMT (in-shell basis) in MY 2016/17 and to increase to 400 TMT in MY 2017/18, of which U.S. imports would be 90 TMT and 95 TMT, respectively. The market share of U.S. peanuts in Vietnam will increase in 2017 and 2018 as a result of the of the Vietnamese Government (GVN)’s suspension decisions for peanuts imported from India, Senegal, Indonesia, Sudan, and Hong Kong.

India remained the largest peanut exporter to Vietnam in 2016 with a market share of 39.5 percent, with the United States becoming the second largest peanut exporter with a 9.3 percent market share. Vietnam’s U.S. peanut imports in 2016 were at about 83 TMT of total in-shell and shelled peanuts, and peanut seeds, an increase of 193 percent over the previous year, of which shelled peanuts accounted for 74.6 percent of total imports. This increase was due to growing demand from the food processing sector and local traders trying to source supply in context of the GVN suspensions of peanut imports from other countries. Vietnam’s peanut imports from Senegal were at 52 TMT of total in-shell and shelled peanuts, an increase of 22.4 percent over the previous year. However, these imports of Senegal peanuts may be affected by the GVN’s September 2016 suspension due to quarantine pest detections. In 2016, peanut imports from Brazil increased by 51 percent to 22 TMT (from 14 TMT in 2015) of total in-shell and shelled peanuts. In 2016, Vietnam imported 289 MT of peanut seed from the United States for the first time, with a value of $277,000.

Policy

Vietnam suspends peanut imports from Senegal

In July 2016, MARD announced decision number 2838/QD-BNN-BVTV, suspending the import of peanuts (Arachis hypogaea) from Senegal, beginning on September 11, 2016, due to the detection of the Karpa beetle (Trogoderma granarium Everts) and the groundnut beetle (Caryedon serratus Olivier) – classified as plant quarantine pests in Vietnam.

Vietnam suspends peanut imports from Sudan and Hong Kong

In October 2016, MARD announced decisions number 4215/QD-BNN-BTVT and number 4216/QD-BNN-BTVT, suspending peanut imports from Sudan and Hong Kong, with the suspension taking effect on December 17, 2016. The ministry assigned the Plant Protection Department (PPD) to closely supervise the import of the above-mentioned products during the pending enforcement of the decision.

Vietnam to suspend import of four agricultural products from Indonesia

On January 19, 2017, MARD’s decision number 191/QD-BNN-BVTV announced Vietnam was suspending imports of four agricultural products from Indonesia after several consignments were found to be contaminated with peanut beetle (Caryedon serratus Olivier), classified as a quarantine pest in Vietnam. As a result, since March 19, 2017, Vietnam has stopped issuing import permits for peanuts (Arachis hypogaea), cassia seed (Cassia spp.), cocoa beans (Theobroma cacao), and beans (Phaseolus spp.) from Indonesia.

Vietnam to suspend import of five agricultural products from India

Following an eight-month suspension due to the detection of a live quarantine pest, (Caryedon serratus Olivier), Vietnam lifted its ban of peanut imports from India on January 18, 2016. This decision was based on the visit of a Vietnamese regulatory team in December 2015 which determined that India had complied with specific conditions for plant quarantine, after inspecting fumigation facilities, export procedures, and the export certification system for peanuts. However, on March 1, 2017, Vietnam announced it was again suspending the import of five agricultural products from India after several consignments were found to be contaminated with the peanut beetle Caryedon serratus Olivier. MARD signed decision number 558/QD-BNN-BVTV on March 1, 2017, and starting on May 1, 2017, MARD will stop issuing import permits for peanuts, cassia seed, cocoa beans, haricot beans and tamarind from India. MARD/PPD has imposed strict controls on all shipments of these five products entering Vietnam to prevent the spread of contamination by the Caryedon serratus Olivier.

Exports

Although Vietnam does not maintain trade data, based on available information its peanut exports remain negligible. In MY 2015/16, Vietnam exported a small quantity (7.3 TMT) of total in-shell basis peanuts, including in-shell, shelled peanuts, and peanut seeds, mainly to Taiwan, Hong Kong, Thailand, Russia, Malaysia, and other countries. This was a drop of 18 percent from the year before, due to smaller demand from importing countries. Post forecasts that peanut exports will remain at the same level or increase slightly in MY 2017/17 and MY 2017/18.

Import Tariffs

According to Decree 122/2016/ND-BTC dated September 1, 2016, the tariff rate applied to both in-shell and shelled peanuts (HS Codes: 1202.41, and 120242) imported from countries having a MFN status with Vietnam remained at 10 percent. For countries with trade agreements with Vietnam, 2017 tariffs dropped from the previous year as follows:

- from five percent to four percent under the AIFTA;from seven percent to six percent under the VCFTA;

-from three percent to two percent under the AJCEP;

- from four percent to three percent under the VJEPA;

- It enjoys a tariff-free status under the VN-EAEU FTA;

The tariff rate applied to roasted ground nuts (HS Codes: 2008.11.10) imported from countries having MFN status with Vietnam remains at 30 percent, while in 2017 it dropped for other trade agreements as follows:

- from seven percent to five percent under the AANZFTA;

- from 17.5 percent to 15 percent under the AIFTA;

- from 23 percent to 20 percent under the VCFTA;

- from 20 percent to 18 percent under the AJCEP;

- from 22.5 percent to 20 percent under the VJEPA;

Oilseed, Peanut

2015/2016

2016/2017

2017/2018

Market Begin Year

Jan 2016

Jan 2017

Jan 2017

Vietnam

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Planted

0

191

0

195

0

200

Area Harvested

210

191

215

205

0

215

Beginning Stocks

39

39

46

52

0

55

Production

477

441

490

451

0

462

MY Imports

300

339

330

370

0

400

MY Imp. from U.S.

0

83

0

90

0

95

MY Imp. from EU

0

0

0

0

0

0

Total Supply

816

819

866

873

0

917

MY Exports

10

7

6

8

0

9

MY Exp. to EU

0

0

0

0

0

0

Crush

60

60

80

80

0

100

Food Use Dom. Cons.

700

700

730

730

0

750

Feed Waste Dom. Cons.

0

0

0

0

0

0

Total Dom. Cons.

760

760

810

810

0

850

Ending Stocks

46

52

50

55

0

58

Total Distribution

816

819

866

873

0

917

Commodities:

Oilseed, Copra

Production

Vietnam had 166,300 ha of coconut plantation area in 2016, producing 1.48 MMT of coconuts. Post estimates Vietnam produced 263 TMT of copra, a 2.7 percent increase over the previous year (copra production is estimated at 17.5 percent-17.8 percent of total coconut production as there is no official data for copra available in Vietnam. Coconut palms are considered to have high resilience to withstand climate change threats such as increased saltwater intrusion, droughts, and floods, and therefore will continue to be important crops as Vietnam is increasingly affected by these extreme weather events. The common coconut varieties cultivated in Vietnam are mainly Aromatic Green Dwarf and Makapuno Tall tree.

Post initially estimates coconut production at 1.5 MMT and 1.53 MMT, and copra production equivalent at 269 TMT and 272 TMT in 2017 and 2018, respectively due to anticipated coconut plantation area expansion.

Consumption

Vietnam produces various products from coconuts for both export and domestic consumption. Although there is no official production data for copra, desiccated coconut, and other coconut products and their consumption in Vietnam, these products are used to produce coconut oil and other byproducts, such as copra meal and cake. Post estimates about 263 TMT of copra products (equivalent) was used for crushing and produced about 166 TMT of copra oil (at a 63 percent extraction rate) and about 92 TMT of copra meal (at a 35 percent extraction rate) in 2016. Copra oil is used for both industrial and food consumption.

Trade:

Import

In 2016, Vietnam continued to import a small volume of various coconuts products such as desiccated coconuts (HS code 0801.11), coconut in the inner shell (endocarp, HS code 0801.12), copra (HS code 1203.00), and other coconut products (other than desiccated, HS code 080119). Vietnam’s all-type coconut product imports rebounded in 2016, an increase of 236 percent over the previous year due to a larger volume of coconut fiber that was imported to meet higher demand. Copra imports (HS code 120300), mainly from India and Thailand, were at 146 MT, an increase of 5.8 percent over the year before, but still low when compared to 2014 levels.

Import Tariffs

According to Decree 122/2016/ND-BTC dated September 1, 2016, the most updated tariff rate applied to coconuts (HS Code: 0801), copra (HS code 1203), and coconut fibers (HS code 5305.00) imported from countries having MFN status.

The tariff rate applied to copra (HS Codes: 1203) imported from countries having a MFN status with Vietnam remains at 10 percent. For countries with specific trade agreements with Vietnam, 2017 tariffs for copra dropped from 2016 as follows:

- from five percent to four percent under the AIFTA;

- from three percent to two percent under the AJCEP;

- from four percent to three percent under the VJEPA;

- It enjoys zero percent under ATIGA, ACFTA, AKFTA,VKFTA, and VN-EAEU FTA

Export

Vietnam exports various coconut products, such as fresh young coconuts, fresh mature coconuts, desiccated coconuts, coconut milk, coconut milk powder, canned coconut drinking water, coconut jams, coconut charcoal, coconut fibers, coconut candy, coconut oil, and other products. In 2016, Vietnam exported 185 TMT of major coconut products, including desiccated coconuts (HS code 080111), coconuts in the inner shell (Endocarp, HS code 080112), other coconut products (HS code 080119), and coconut fibers.

Oilseed, Copra

2015/2016

2016/2017

2017/2018

Market Begin Year

Jan 2016

Jan 2017

Jan 2018

Vietnam

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Planted

0

166

0

170

0

172

Area Harvested

162

166

165

170

0

172

Trees

0

0

0

0

0

0

Beginning Stocks

14

14

13

14

0

14

Production

254

263

258

269

0

272

MY Imports

0

0

0

0

0

0

MY Imp. from U.S.

0

0

0

0

0

0

MY Imp. from EU

0

0

0

0

0

0

Total Supply

268

277

271

283

0

286

MY Exports

0

0

0

0

0

0

MY Exp. to EU

0

0

0

0

0

0

Crush

255

263

260

269

0

272

Food Use Dom. Cons.

0

0

0

0

0

0

Feed Waste Dom. Cons.

0

0

0

0

0

0

Total Dom. Cons.

255

263

260

269

0

272

Ending Stocks

13

14

11

14

0

14

Total Distribution

268

277

271

283

0

286


Policy

Vietnam officially became a member of the Asia Pacific Coconut Council (APCC) on April 1, 2016, with the Vietnam Coconut Association as the official representative of Vietnam in the APCC, according the Ministry of Industry and Trade. Created in 1969, the APCC is an inter-governmental organization consisting of 18 coconut producing member countries and accounting for over 90 percent of world coconut production and exports of coconut products. Current APCC member countries include: the Federated States of Micronesia, Fiji, India, Indonesia, Kiribati, Malaysia, Marshall Islands, Papua New Guinea, Philippines, Samoa, Solomon Islands, Sri Lanka, Thailand, Tonga, Vanuatu, and Vietnam. Jamaica and Kenya are also associate member countries of the APCC.

Commodities:

Oilseed, Rapeseed

Production:

In 2016, colza seed (rapeseed) production remained limited and is used mainly for research. While this research is showing positive results, rapeseed production area has continued to expand slowly. Rapeseed is cultivated in only a few areas, such as the provinces of Ha Giang, Moc Chau-Son La, and Mu Cang Chai-Yen Bai, mainly for tourist development purposes. Post forecasts the rapeseed cultivation area to expand in the coming years for both tourism and oil crushing industries.

Trade

Import

In 2016, Vietnam imported a negligible volume of rapeseed (colza seed), a significant drop compared with the last year due to low demand.

Import Tariffs

According to Decree 122/2016/ND-BTC dated September 1, 2016, the tariff rate applied to Rapeseed or Colza seeds (HS Code: 120510 and HS code 120590) imported from countries having a MFN status with Vietnam remains at five percent.

Export

In 2016, Vietnam exported a negligible quantity of rapeseed (colza seed) with HS codes 120510 and 120590 to Switzerland.

Consumption

In Vietnam, the majority of rapeseed are planted and used for creating beautiful flower fields in several provinces such as Ha Giang, Son La, and Yen Bai, for the tourism industry. A negligible volume of rapeseed is used for oil extraction at the household scale. However, Post foresees the potential for rapeseed oil extraction at a larger scale in the next few years due to the expansion of the rapeseed cultivation area.

Oilseed, Rapeseed

2016/2017

2017/2018

2018/2019

Market Begin Year

Oct 2016

Oct 2017

Oct 2018

Vietnam

USDA Official

New Post

USDA Official

New PostUSDA Official

New Post

Area Planted

0

1

0

1

0

2

Area Harvested

0

1

0

1

0

2

Beginning Stocks

1

1

0

0

0

0

Production

0

2

0

2

0

4

MY Imports

50

7

0

10

0

12

MY Imp. from U.S.

0

0

0

0

0

0

MY Imp. from EU

0

0

0

0

0

0

Total Supply

51

10

0

12

0

16

MY Exp. from EU

0

0

0

0

0

0

MY Exp. to EU

0

0

0

0

0

0

Crush

50

9

0

11

0

15

Food Use Dom. Cons.

0

0

0

0

0

0

Feed Waste Dom. Cons.

1

1

0

1

0

1

Total Dom. Cons.

51

10

0

12

0

16

Ending Stocks

0

0

0

0

0

0

Total Distribution

51

10

0

12

0

16

MEAL SECTION

Commodities:

Meal, Soybean

Production:

Vietnam’s domestic soybean meal (SBM) production was 722 TMT in MY2015/2016, a drop of 12.7 percent from the previous year and 19.2 percent from 2014’s record level (889 TMT) due to the decreased operations at the Northern Vietnam crushing facility reflecting an ongoing reorganization. However, Post projects domestic SBM production to rebound in the next few years with the operation of a new crushing facility, the availability of additional capacity in existing crush facilities, and the increasing demand for soybean meal production and soy oil encouraging a higher crush. Post has revised its estimates for MY 2016/17 SBM production to 767 TMT. Post’s initial forecast for SBM production in MY 2017/18 is 803 TMT.

Consumption

Almost all SBM, both domestically produced and imported, is used by the feed industries to meet surging demand for animal and aquaculture protein. Recently, some domestically produced SBM has been exported to neighboring countries.

Vietnam also imports soy flour (198 TMT), which is used in the food and feed industries. This volume was a 41 percent drop from the previous year (336 TMT) due to lower demand for soy flour and the higher volume of SBM imports serving as a substitute in the feed industry. Vietnam’s SBM consumption was estimated at 5.67 MMT in MY 2015/16. Post forecasts MY2016/17 SBM consumption at 5.89 MMT based on a year-on-year increase of 3.9 percent. Post’s initial MY 2017/18 SBM consumption forecast is 6.09 MMT, reflecting the steady, continued growth in the livestock and aquaculture sectors.

Trade:

Imports

Vietnam continues to import an increasing amount of SBM to offset a protein shortage in the country and meet the growing demand in the animal and aquaculture feed industries. In MY 2015/16, Vietnam imported about 5.09 MMT of total SBM and soy flour, an increase of around 11 percent over the previous year (4.58 MMT).

In December 2016, GVN issued a temporary suspension decision for distiller's dried grains with solubles (DDGS) imports from the United States following a number of quarantine pest detections, which may cause a shortage in the supply of DDGS in the near future. As a result, Vietnamese feed mills may need to raise the percentage of other feed ingredients as substitutes, such as soymeal, rapeseed meal, etc. in their feed formulation. Post estimates total MY 2016/17 SBM imports, including SBM, soy flour, and other residues from soybeans, to slightly increase to 5.15 MMT, and to continue to increase in MY 2017/18 to 5.2 MMT due to strong demand in the feed sector.

Argentina remained the largest supplier of SBM to Vietnam in 2016, accounting for 84 percent of the import market share, up from 70 percent in 2015 and 65 percent in 2014, due to competitive prices. Brazil, China, and the United States are the other significant suppliers of SBM to Vietnam, with Bolivia also a recent entrant. In MY 2015/16, U.S. SBM exports to Vietnam were 211 TMT, accounting for four percent of the market share. This was a drop from seven percent in the previous year (319 TMT) due to lower demand from the food processing industry as U.S. SBM was less competitive compared with imported full fat soybeans. In MY 2015/16, approximately 94 percent of U.S. SBM exports to Vietnam were soybean flour (HS Code 120810).

Post estimates U.S. SBM exports in MY2016/17 and MY2017/18 will be at the same level of 210 TMT. Vietnam also imported about 198 TMT of soybean flour in 2016, mainly from the United States, which was used for both the feed and food industries. This was a drop of 41 percent from the previous year and Post projects this decline to continue in 2017 and in coming years as demand decreases due to high tariffs and competiveness with imported soybeans.

Prices

Vietnam’s average SBM import price in 2016 was $387 per metric ton, a 12.6 percent drop from the previous year ($444), due to an overall decline in the global market. Currently, import prices are quoted at around $417/MT CFR Ho Chi Minh City and $421-$422/MT CFR Haiphong for shipments in May 2017. These prices are higher than average compared to the same period of the previous year. Although import prices have been volatile, they are expected to remain at this level or around $430/MT in 2017 due to lower global soybean production, with reductions in Argentina and Bolivia, and the United States, more than offsetting a larger forecast in production for the Ukraine and Brazil. An increasingly large segment of the industry recognizes the value of using high-protein SBM.

Import Tariffs

According to Decree 122/2016/ND-BTC dated September 1, 2016, the tariff rate applied to SBM, full fat soybean flour, and soybean hulls imported from countries having MFN status with Vietnam are stated below:

 Import duty for soybean flour (HS code: 120810): eight percent

 Import duty for soybean hulls (HS code: 230250): zero percent

 Import duty for defatted soya bean flour, fit for human consumption (HS code: 2304.00.10): zero percent

 Import duty for other soybean meal (HS code: 2304.00.90): two percent

For countries with trade agreements with Vietnam, 2017 tariffs for soybean flour (HS code: 120810) decreased from 2016 as follows:

from seven percent to five percent under the AANZFTA;

 from 12.5 percent to 10 percent under the AIFTA;

 from 11 percent to 10 percent under the VCFTA;

 from 15 percent to 13 percent under the AJCEP;

 from 11 percent to 8 percent under the VJEPA;

 It is zero percent under the VN-EAEU FTA;

Exports

Vietnam exported about 119 TMT of total soybean meal (HS Code: 230400), soy flour (HS Code: 120810), and other residues from soybeans (HS Code: 230250) in 2016 (MY 2015/16) . Major export markets for Vietnamese SBM were Cambodia, Japan, Philippines, Singapore, Laos, South Korea, Myanmar (Burma), and Taiwan. Although Vietnam will remain a large importer of SBM, there was also a small amount of SBM exports to neighboring countries. Post forecasts Vietnam’s SBM exports at about 150 TMT in MY2016/17, and at 170 TMT.

Meal, Soybean

2015/2016

2016/2017

2017/2018

Market Begin Year

Jan 2016

Jan 2017

Jan 2018

Vietnam

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Crush

1150

980

1400

1050

0

1100

Extr. Rate, 999.9999

0.7339

0.7327

0.7343

0.7273

0

0.7304

Beginning Stocks

448

448

462

470

0

347

Production

844

722

1028

767

0

803

MY Imports

5090

5089

5200

5150

0

5200

MY Imp. from U.S.

350

211

350

210

0

210

MY Imp. from EU

0

0

0

0

0

0

Total Supply

6382

6259

6690

6387

0

6350

MY Exports

300

119

300

150

0

170

MY Exp. to EU

0

0

0

0

0

0

Industrial Dom. Cons.

0

0

0

0

0

0

Food Use Dom. Cons.

70

70

90

90

0

90

Feed Waste Dom. Cons.

5550

5600

6000

5800

0

6000

Total Dom. Cons.

5620

5670

6090

5890

0

6090

Ending Stocks

462

470

300

347

0

90

Total Distribution

6382

6259

6690

6387

0

6350


Commodities:

Meal, Copra

Meal, Cottonseed

Meal, Palm Kernel

Meal, Rapeseed

Meal, Peanut

Meal, Sunflower seed

Fishmeal

Production:

Vietnam has a negligible production volume of other oilseed meals, such as peanut meal, copra meal, rapeseed meal, etc. Soybean meal and copra meal are the largest meals produced in Vietnam.

Copra cake and meal production

Vietnam uses copra and desiccated coconuts to make copra oil, and by-products from crushing are copra cake and meal. Copra cake and meal is used for the animal feed sector. The estimated conversion rate from copra to copra cake and meal is 35 percent in Vietnam. In 2016, Vietnam produced about 92 TMT of copra meal.

Fishmeal production

Vietnam’s fishmeal production was 450 TMT in 2016, of which 316 TMT is saltwater fishmeal and 135 TMT is freshwater fishmeal, according to the General Statistics Office (GSO). Production of fishmeal, mainly from the south of Vietnam, depends on the production of caught saltwater and freshwater fish and the volume of caught trash fish. However, freshwater fishmeal has been increasing in recent years due to growth in freshwater fishery production leading to a rise in the volume of by-products available for fishmeal.

All locally produced and imported oil meals and feed ingredients, including fishmeal, are used as substitutes for SBM in livestock and aquaculture feed.

Trade:

Import

In 2016, Vietnam imported about 200 TMT of other oilseed meals, including peanut meal, cottonseed meal, sunflower meal, canola meal, rapeseed meal, copra meal, and palm kernel meal, a drop of 77 percent from the previous year (873 TMT) due to a greater offset of other imported feed ingredients, such as SBM, DDGS, and other residues. Posts notes that Vietnam’s imports of U.S. canola and rapeseed meal, although still small, significantly increased to become the third largest in 2016. Vietnam imported about 115 TMT of fishmeal, of which 22 percent was imported from Peru, 21 percent from Thailand, and 11 percent from India. The remainder was imported from Mauritania, Oman, Malaysia, Chile, South Korea, Indonesia, and other countries. The total oil meals, DDGS, corn gluten meal, fishmeal, and other protein meal imports were 3.37 MMT in 2016, accounting for about 14 percent of total commercial feed production for both livestock and aquaculture.

Import Tariffs

The tax rates applied to other oilseed meals and fishmeal imported from countries having Most Favored Nation (MFN) status with Vietnam remain zero (0) percent.

Policy

New requirement of fumigation for U.S. grains effective from December 1, 2016.On September 26, 2016, MARD issued an official letter to USDA’s Animal and Plant Health Inspection Service (APHIS) notifying new requirements for Methyl Bromide (MB) fumigation that would be applied from December 1, 2016 on pre-shipments for all consignments of U.S. wheat, corn, and DDGS.

Temporary ban for DDGS import from the United States

On October 17, 2016, MARD issued decision No. 4217/QD-BNN-BVTV temporarily suspending U.S. DDGS imports due to the detection of quarantine pests, with the suspension taking effect on December 17, 2016. Given the potential shortage of U.S. DDGS in 2017 due to this suspension decision, local feed mills may need to increase the percentage of other feed ingredients such as soymeal, rapeseed meal, etc. in their feed formulation. This factor should become more pronounced after stocks resulting from the surge of imported DDGS are drawn down as 2017 progresses.

MARD Minister instructs a slowdown in hog production sector and the swine feed production industry.

Recently, MARD instructed all provinces not to expand their respective swine herds, as well as limit the capacity of animal feed plants in order to support the goal of future sustainable agriculture development. MARD announced this policy in reaction to the fast growth of Vietnam’s commercial swine numbers and pig feed production, which has caused a significant drop of hog prices in domestic and export markets, as well as negative environmental effects.

The Vietnam-Eurasia Economic Union Free Trade Agreement (VN-EAEU FTA) takes effect on October 5, 2016

The Vietnam-Eurasia Economic Union Free Trade Agreement (VN-EAEU FTA) took effect on October 5, 2016. According to the MOIT’s Europe Market Department, discussions for the VN-EAEU FTA, which includes Vietnam, Russia, Belarus, Kazakhstan, Armenia, and Kyrgyzstan, started in March 2013 with the final agreement formalized on May 29, 2015. Under this agreement, many feed ingredients, such as oil seed meals, now enjoy a zero-rate import tariff. The Vietnam-Eurasia Economic Union Free Trade Agreement opens the way for Vietnam to import many feed ingredients, including corn, from Russia with a lower import tariff.

Hai Phong City to apply more port fees in 2017

Starting from January 1 2017, Hai Phong City began charging fees from shipments into all ports for the use of infrastructure, service facilities, and public utilities in the city. A number of companies have begun to complain about the decision to charge high fees at all ports in Hai Phong City. On December. 13, 2016, the municipal People’s Committee promulgated a resolution regulating the fees to be charged for construction, infrastructure, service buildings, and public utilities in the city with the resolution taking effect in January 2017. Accordingly, individuals and organizations that have shipments stored at bonded warehouses must pay VND 2.2million (USD $97) up to VND 4.8million (USD $220) per container, an increase of nearly 70 percent. This imposes a further burden on local import-export companies due to high logistical costs charged for customs fees, shipment handling fees, import and export taxes, and now, infrastructure fees. Hai Phong Port now accounts for more than a third of Vietnam’s total cargo transportation, second to Sai Gon New Port. Higher logistic costs also limit Vietnam’s competitiveness in global trade markets.

Vietnam’s deep-water port capable to receive container ships of more than 100,000 deadweight tonnages (DWT)

Recently, the world’s largest container ship, Margrethe Maersk, with 194,000 DWT, docked at the Cai Mep International Terminal (CMIT) located at the downstream section of the Cai Mep River in the southern province of Ba Ria-Vung Tau. With the arrival of Margrethe Maersk, CMIT becomes the first port in Vietnam, and the 19th in the world, to be able to handle an 18,300 twenty-foot equivalent unit (TEU) vessel. Part of the seaport development plans in Vietnam, the Cai Mep complex of container terminals currently consists of CMIT, the Tan Cang-Cai Mep ODA Terminal, and the SP-SSA International Terminal (SSIT).

Export

In 2016, Vietnam exported close to 266 TMT of other oilseed and protein meals, including copra meal, rapeseed meal, and fish meal, to neighboring countries in the region.

In 2016, Vietnam exported 185.3 TMT of fishmeal, an increase of 21.8 percent over the previous year (152.1 TMT), with China being the largest market.Vietnam exports low-protein fishmeal, while importing high-protein fishmeal.

Meal, Copra

2016/2017

2017/2018

2018/2019

Market Begin Year

Jan 2016

Jan 2017

Jan 2018

Vietnam

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Crush

260

263

0

269

0

272

Extr. Rate, 999.9999

0.3538

0.3498

0

0.3494

0

0.3493

Beginning Stocks

14

14

0

7

0

7

Production

92

92

0

94

0

95

MY Imports

100

83

0

90

0

90

MY Imp. from U.S.

0

0

0

0

0

0

Total Supply from EU

0

0

0

0

0

0

Total Supply

206

189

0

191

0

192

MY Exports

3

2

0

2

0

2

MY Exp. to EU

0

0

0

0

0

0

Industrial Dom. Cons.

0

0

0

0

0

0

Food Use Dom. Cons.

0

0

0

0

0

0

Feed Waste Dom. Cons.

190

180

0

182

0

185

Total Dom. Cons.

190

180

0

182

0

185

Ending Stocks

13

7

0

7

0

5

Total Distribution

206

189

0

191

0

192

Commodities:

Oil, Soybean

Oil, Palm Kernel

Oil, Coconut

Oil, Rapeseed

Oil. Sunflower seed

Oil, Cottonseed

Production:

Refined vegetable oil production

Vietnam produced a record level of 1,092 TMT of refined vegetable oil (all types) in 2016, an increase of 13 percent over the previous year (966 TMT. Refined oil production is projected to increase between eight and nine percent to 1,186 TMT in 2017 and to 1,276 TMT in 2018. However, Post believes that it may be difficult for Vietnam’s producers to meet GVN’s target for refined vegetable oil production of 1.59 MMT by 2020 and 1.93 MMT by 2025, as stated by MOIT’s “Development Plan for Vietnam’s Vegetable Oil Industry up to 2020, and Vision to 2025”.

There are now some 40 cooking oil manufacturers in Vietnam with hundreds of edible oil brands that can now be found around the country. Seventy percent of them are palm oil, 23 percent are soybean oil, and seven percent are other vegetable oil manufacturers.

Currently, Tuong An, Vocarimex, Cai Lan, and Golden Hope Nha Be are the four leading vegetable oil manufacturers in Vietnam. According to Euromonitor, Cai Lan now holds 40 percent of the market share with Tuong An holding a 20 percent. Cai Lan (Calofic) is the leader in Vietnam’s cooking oil market and has won the trust of a wide range of customers with its famous brands, including Neptune, Simply, and Meizan.

During 2016, Kido Corporation, a well-known bakery manufacturer, became a new player in Vietnam’s vegetable oil market, after purchasing a 65 percent stake of Tuong An Vegetable Oil. Kido also acquired a 24 percent stake of the Vietnam Vegetable Oils Industry Corporation (Vocarimex), a large vegetable oil manufacturer in 2016, and increased this percent stake to 51 percent in January 2017.

Meanwhile, Daso Group, specializing in providing logistics services, also entered the vegetable oil market in 2016, launching two new vegetable oil brands, Ogold and Binh An. Finally, Otran Group continues to be a major player, marketing cooking oil products under its Otran brand.

In 2016, there was a major development in Vietnam’s crude vegetable oil market when Bunge Vietnam sold 45 percent of its equity in its Vietnam crush operations to Wilmar. This sale created a three-party joint venture between Bunge and Wilmar (each owning an equal 45 percent of shares) and Quang Dung (a leading soybean meal distributor in Vietnam and majority owner of Green Feed Company, a growing Vietnamese feed mill) which retained its existing 10 percent stake in the operations. This joint venture could result in potential growth by connecting Bunge’s crushing capabilities with Wilmar’s oil refining and consumer product business, and Green Feed’s feed milling and marketing activities. This joint venture’s target is to integrate operations to create both a source and sales outlet for oil in Vietnam.

Since 2008, Wilmar has owned the Hung Phu factory, which was established in 2003 in the Mekong. River Delta’s Can Tho city by the Cai Lan Oils and Fats Industries Company (Calofic) in which Wilmar hold a 76 percent stake. This factory, with a 500 MT per day capacity, produces rice bran mill for animal feed and rice bran oil for consumer products.

Finally, Nortalic, a new joint venture company between the Musim Mas Group (Singapore) and Vocarimex, started construction of a soybean oil processing plant in the central province of Thanh Hoa, with a total investment of US$71.5 million. This plant is aiming for an initial production capacity of 600 MT per day, with an eventual total capacity of 1,500 MT per day.

Post’s initial forecast of MY 2017/18 soy oil production is 216 TMT, an increase of 4.9 percent, based on increased crush. Post’s MY 2016/17 crude soybean oil estimate is revised down to 06 TMT from its previous estimate of 228 TMT due to the decreased soybean crushing volume in the facility in the North, however, this is still a 5.6 percent increase over the previous year, as total crush rebounds. In MY 2015/16, Vietnam produced an estimated 195 TMT of crude soy oil, a drop of 8.9 percent from the year before due to a smaller crush. There is no official data available for crude soy oil.

Crude Coconut Oil production

Vietnam’s 2016 estimate crude coconut oil production was at 166 TMT with an estimated extraction rate from copra to coconut oil of 63 percent. There is no official data available for crude coconut oil production.

Consumption:

Most vegetable oil products are used for both human consumption and the food processing industry. Crude vegetable oils are used for animal feed, industrial processing, and the cosmetics industry. A small amount of vegetable oil is also exported overseas.

Local producers estimated MY 2015/16 total vegetable oil consumption at 1,020 TMT, up about 12 percent over the previous year. There is no official data available for vegetable oil consumption per capita. Post projects vegetable oil consumption to continue to expand as demand continues to grow, driven by a number of factors, including: overall economic growth, expansion of the food processing and animal feed industries, rising consumer incomes, and increased urbanization. Local industry sources estimated 2016 vegetable oil consumption per capita to be 10-11kg per person, below the world average of 13.5 kg per capita per year. GVN projects vegetable oil consumption per capita to increase to 16 kg per person per year by 2020, and 18.5 kg by 2025, however Post does not believe domestic consumption can reach these projected levels.

Most imported soybean and palm oil is currently used for food; only a small volume of imported oil is used in the industrial and cosmetic manufacturing sectors and feed industry. Post estimates local consumption at 725 TMT for palm oil and 270 TMT for soybean oil in MY 2015/16. In MY 2016/17, Post forecasts local consumption of palm oil at 756 TMT and soy oil at 277 TMT.

Post estimates 2016 coconut oil consumption at 160 TMT, of which, 105 TMT is used for food processing industry and about 55 TMT is used for the industrial and cosmetic manufacturing sectors

Regarding other vegetable oil consumption in Vietnam, olive oil, which was imported mainly from Spain, was recognized as one of the best vegetable oils for consumption; however, consumption is limited to only one percent of total vegetable oil and fats consumption due to high prices.

Trade:

Imports of all type animal or vegetable oil and fats

Vietnam continues to import animal and vegetable oil and fats to meet growing demand in the country. Vietnam’s total imports of total all-types of animal and vegetable oil and fats was 854 TMT in 2016

Imports of vegetable oils (both crude and refined)

Vietnam’s vegetable oil industry continues to import crude and refined oil to meet consumer demand.

In MY 2015/16, Vietnam imported an estimated 808 TMT of crude and refined vegetable oils of all types, a drop of six percent from the previous year due to a decrease in refined palm oil imports from Malaysia.

Palm oil continues to be a major imported vegetable oil in Vietnam. Total palm and palm kernel oil imports (both crude and refined oils) were 684 TMT in MY 2015/16, a drop of 4.5 percent from the previous year, but still accounted for almost 85 percent of total vegetable oil imports.

In MY 2015/16, Vietnam’s refined vegetable oil imports were estimated at 735 TMT, accounting for 91 percent of the total imported vegetable oils, of which 93 percent was refined palm oil.

Total soy oil imports (both crude and refined) were 79 TMT in MY 2015/16, a decrease of 19.6 percent compared to the previous year due to smaller imports from Argentina. Soy oil accounts for about 9.7. percent of total vegetable oil imports. Post forecasts soy oil imports will increase in the future due to the operation of a number of soy-only oil refining plants.

Vietnam imported a small volume of coconut (copra) oil (1.4 TMT) and rapeseed (colza) oil (1.5 TMT) in MY2015/16.

Other vegetable oils, including peanut oil, olive oil, sunflower oil, cottonseed oil, linseed oil, corn oil, castor oil, and other vegetable oils imported in refined, consumer-ready packaging, were 43 TMT in MY 2015/16, an increase of 3.9 percent over the previous year. Other imported vegetable oils accounted for about 5.3 percent of total vegetable oil imports.

Post forecasts that total vegetable oil imports in MY 2016/17 will remain in the 870-880 TMT range.

Imports of crude vegetable oil

Vietnam’s total crude vegetable oil imports in MY 2015/16 were about 73.5 TMT, a drop of 25.7 percent from the previous year . Post estimates crude oil imports in MY 2016/17 will decrease due to lower demand.

Imports of refined vegetable oil

Vietnam’s refined vegetable oil imports for MY 2015/16 were 735 TMT, a 3.5 percent drop from the previous year’s level (761 TMT). This drop was due to a decrease in refined palm oil imports, (mainly from Malaysia) which account for around 93 percent of total imported refined vegetable oil. Other vegetable oils, which are mostly in consumer-ready packaging, accounted for 5.8 percent of total refined vegetable oil imports. Refined soybean oil accounted for one percent of total refined vegetable oil imports in MY 2015/16.

In MY 2016/17, Post forecasts refined oil imports at 800-820 TMT. Of this estimate, Post forecasts refined palm oil imports, soy oil, and other vegetable oil imports at 750 TMT, 10 TMT, and 45 TMT, respectively. Post’s initial forecasts for MY 2017/18 are 760 TMT for refined palm oil imports and 12 TMT for soy oil imports.

Policy

Import Tariff

For countries with trade agreements with Vietnam, 2017 tariffs dropped from 2016 as follows:

For soy oil (HS code 1507):

 from two percent to one percent under the VJEPA;

 It enjoys a tariff-free status under the VN-EAEU FTA;

For peanut oil (HS code 1508):

 from two percent to one percent under the VJEPA;

 It enjoys a tariff-free status under the VN-EAEU FTA;

 from five percent to four percent under the AIFTA for crude peanut oil (HS 1508.10.00);

 from five percent to zero percent under the ATIGA for refined peanut oil (HS code 1508.90.90);

 from seven percent to five percent under the AANZFTA for refined peanut oil (HS code 1508.90.90);

 from 12.5 percent to 10 percent under the AIFTA for refined peanut oil (HS code 1508.90.90);

 from 22 percent to 19 percent under the VCFTA for refined peanut oil (HS code 1508.90.90);

 from 15 percent to 13 percent under the AJCEP for refined peanut oil (HS code 1508.90.90);

 from 17 percent to 15 percent under the VJEPA for refined peanut oil (HS code 1508.90.90);

For olive oil (HS code 1509):

 from two percent to one percent under the VJEPA;

 It enjoys a tariff-free status under the VN-EAEU FTA for olive oil products (HS code 1509.10.10 and 1509.10.90 and 1509.90.11);

 from seven percent to five percent under the AANZFTA for olive oil products (HS code 1509.90.91 and 1509.90.99);

 from 12.5 percent to 10 percent under the AIFTA for olive oil products (HS code 1509.90.91 and 1509.90.99);

 from 19 percent to 17 percent under the VCFTA for olive oil products (HS code 1509.90.91 and 1509.90.99);

 from 15 percent to 13 percent under the AJCEP for olive oil products (HS code 1509.90.91 and 1509.90.99);

 from 17 percent to 15 percent under the VJEPA for olive oil products (HS code 1509.90.91 and 1509.90.99);

For other olive oil products (HS code 1510):

 from two percent to one percent under the VJEPA for other olive oil products (HS code 1510.00.10 and 1510.00.20);

 from seven percent to five percent under the AANZFTA for other olive oil product (HS code 1510.00.90);

 from 12.5 percent to 10 percent under the AIFTA for other olive oil product (HS code 1510.00.90);

 from 22 percent to 19 percent under the VCFTA for other olive oil product (HS code 1510.00.90);

 from 15 percent to 13 percent under the AJCEP for other olive oil product (HS code 1510.00.90);

 from 11 percent to eight percent under the VJEPA for other olive oil product (HS code 1510.00.90);

For palm oil products (HS code 1511):

 from two percent to one percent under the VJEPA for crude palm oil products (HS code 1511.10.00 );

 from 11 percent to eight percent under the VJEPA for palm oil products (HS code 1511.90.11; 1511.90.19; 1511.90.91; 1511.90.92; and 1511.90.99);

 from 15 percent to 13 percent under the AJCEP for palm oil products (HS code 1511.90.11; 1511.90.19; 1511.90.91; 1511.90.92; and 1511.90.99);

 from 12.5 percent to 10 percent under the AIFTA for palm oil products (HS code 1511.90.11; 1511.90.19; 1511.90.91; 1511.90.92; and 1511.90.99);

 from seven percent to five percent under the AANZFTA for palm oil products (HS code 1511.90.11; 1511.90.19; 1511.90.91; 1511.90.92; and 1511.90.99);

 It enjoys a tariff-free status under the VN-EAEU FTA for palm oil products (HS code 1511.10.00 and 1511.90.11 and 1511.90.19);

For sunflower seed oil and cotton seed oil products (HS code 1512):

 from two percent to one percent under the VJEPA for sunflower seed oil products (HS code 1512.11.00; and 1512.19.10); and cotton seed oil product (HS code 1512.21.00; and 1512.29.10);

 from 17 percent to 15 percent under the VJEPA for sunflower seed oil product (HS code 1512.19.90);

 from 15 percent to 13 percent under the AJCEP for sunflower seed oil product (HS code 1512.19.90) and cotton seed oil product (HS code 1512.29.90);

 from 15 percent to 13 percent under the VCFTA for sunflower seed oil product (HS code 1512.19.90);

 from 12.5 percent to 10 percent under the AIFTA for sunflower seed oil product (HS code 1512.19.90) and cotton seed oil product (HS code 1512.29.90);

 from seven percent to five percent under the AANZFTA for sunflower seed oil product (HS code 1512.19.90) and cotton seed oil product (HS code 1512.29.90);

 from five percent to four percent under the AIFTA for cotton seed oil products (HS code 1512.21.00; and 1512.29.10);

 from 25 percent to 22 percent under the VCFTA for cotton seed oil product (HS code 1512.29.90);

 from 17 percent to 15 percent under the VJEPA for sunflower seed oil products (HS code 1512.11.00; and 1512.19.10); and cotton seed oil product (HS code 1512.21.00; and 1512.29.10);

 It enjoys a tariff-free status under the VN-EAEU FTA for cotton seed oil product (HS code 1512.29.90);

For coconut, palm kernel or babassu oil products (HS code 1513):

 from two percent to one percent under the VJEPA for coconut oil products (HS code 1513.11.00 and 1513.19.10); palm kernel oil products (HS code 1513.21.10; 1513.21.90; 1513.29.11; 1513.29.13); babasu oil products (HS code 1513.29.12; and 1513.29.14);

 from five percent to four percent under the AIFTA for coconut oil product (HS code 1513.11.00); and palm kernel oil products (HS code 1513.21.10 and 1513.21.90);

 from seven percent to five percent under the AANZFTA for coconut oil product (HS code 1513.19.90); palm kernel oil products (HS code 1513.29.91; 1513.29.94; 1513.29.95; 1513.29.96); and babasu oil products (HS code 1513.29.92; and 1513.29.97);

 from 12.5 percent to 10 percent under the AIFTA for coconut oil product (HS code 1513.19.90); palm kernel oil products (HS code 1513.29.91; 1513.29.94; 1513.29.95; 1513.29.96); and babasu oil products (HS code 1513.29.92; and 1513.29.97);

 from 22 percent to 19 percent under the VCFTA for coconut oil product (HS code 1513.19.90);

 from 15 percent to 13 percent under the AJCEP for coconut oil product (HS code 1513.19.90); palm kernel oil products (HS code 1513.29.91; 1513.29.94; 1513.29.95; 1513.29.96); and babasu oil products (HS code 1513.29.92; and 1513.29.97);

 from 11 percent to eight percent under the VJEPA for coconut oil product (HS code 1513.19.90); palm kernel oil products (HS code 1513.29.91; 1513.29.94; 1513.29.95; 1513.29.96); and babasu oil products (HS code 1513.29.92; and 1513.29.97);

 It enjoys a tariff-free status under the VN-EAEU FTA for palm kernel oil products (HS code 1513.21.10 and 1513.21.90; 1513.29.10; 1513.29.11; 1513.29.13 and 1513.29.90); babasu oil products (HS code 1513.29.12; and 1513.29.14);

 from 27 percent to 24 percent under the VCFTA for palm kernel oil products (HS code 1513.29.91; 1513.29.94; 1513.29.95; 1513.29.96); and babasu oil products (HS code 1513.29.92; and 1513.29.97);

For rapeseed (colza) oil products (HS code 1514):

 from two percent to one percent under the VJEPA for rape or colza oil products (HS code 1514.11.00; 1514.19.10; and 1414.19.90; 1514.91.10; 1514.91.90; and 1514.99.10)

 It enjoys a tariff-free status under the VN-EAEU FTA for rape or colza oil products (HS code 1514.11.00; 1514.19.10; and 1514.19.90; 1514.91.10; 1514.91.90)

 from seven percent to five percent under the AANZFTA for rape or colza oil products (HS code 1514.99.91; 1514.99.99);

 from 12.5 percent to 10 percent under the AIFTA for rape or colza oil products (HS code 1514.99.91; 1514.99.99);

 from 19 percent to 17 percent under the VCFTA for rape or colza oil products (HS code 1514.99.91; 1514.99.99);

 from 15 percent to 13 percent under the AJCEP for rape or colza oil products (HS code 1514.99.91; 1514.99.99);

Policy

Vietnam’s vegetable oil industry no longer receives protection from GVN as the official safeguard measures expired.

The GVN’s official safeguard measures for imported refined soy and palm oil products are set to expire on May 8, 2017. This change ends GVN protection for Vietnam’s edible oil industry and allowing for more competition with foreign brands. Originally, the safeguard measures increased the import tariff on refined soy and palm oil products, aiming to help domestic refiners. These official safeguard measures have been applied on imported refined soy and palm oil products, under the following HS codes: 1507.90.90; 1511.90.91; 1511.90.92; and 1511.90.99, to ASEAN refined palm oil exporters (Malaysia and Indonesia) and Argentine, U.S., and Brazilian refined soybean oil.

Vietnam’s import tariffs for ASEAN imports went into effect for the period 2016-2018

Decree No. 129/2016/ND-CP issued on September 1, 2016 and taking effect the same day, states that the tariff is to be applied to goods directly transported from exporting countries into Vietnam. The exporter must be an ATIGA member, which includes Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, and Thailand. Goods must also meet origin regulations, as stated in the agreement, and exporters must have certificates of origin. Accordingly, vegetable oils imported from a number of ASEAN countries have started enjoying a zero percent import tariff since September 1, 2016.

Exports

Currently, there is no official export volume data available for vegetable oils. Vietnam’s exports of all types of animal or vegetable oils and fats reached an estimated 111 TMT in MY 2015/16, a drop of 40 percent from the previous year (184 TMT) due to a significant decline of demand from South Korea and Japan. There is a significant drop in exports of soy oil in 2016, also due to a decline in South Korean demand. Of the total MY 2015/16 Vietnamese vegetable and animal oil and fat exports, crude and refined soy oil accounted for 14.9 percent (16.5 TMT); palm oil, copra oil and rapeseed oil accounted for 11.1 percent (12.4 TMT); and other vegetable oils and fats for 74 percent. Post’s initial estimates for both MY 2016/17 and MY2017/18 soy oil exports are in the range of 20-22 TMT.

OIl, Soybean

Oil, Soybean

2015/2016

2016/2017

2017/2018

Market Begin Year

Jan 2016

May 2017

Jan 2017

Vietnam

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Crush

1150

993

1400

1050

0

1100

Extr. Rate, 999.9999

0.1904

0.1964

0.19

0.1962

0

0.1964

Beginning Stocks

23

23

23

10

0

9

Production

219

195

266

206

0

216

MY Imports

76

79

70

90

0

100

MY Imp. from U.S.

0

0

0

0

0

0

MY Imp. from EU

0

0

0

0

0

0

Total Supply

318

297

359

306

0

325

MY Exports

20

17

45

20

0

22

MY Exp. to EU

0

0

0

0

0

0

Industrial Dom. Cons.

0

0

0

0

0

0

Food Use Dom. Cons.

275

250

290

255

0

265

Feed Waste Dom. Cons.

0

20

0

22

0

25

Total Dom. Cons.

275

270

290

277

0

290

Ending Stocks

23

10

24

9

0

13

Total Distribution

318

297

359

306

0

325

Oil, Palm

Oil, Palm

2015/2016

2016/2017

2017/2018

Market Begin Year

May 2015

May 2017

Jan 2017

Vietnam

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Planted

0

0

0

0

0

0

Area Harvested

0

0

0

0

0

0

Trees

0

0

0

0

0

0

Beginning Stocks

64

64

29

23

0

17

Production

0

0

0

0

0

0

MY Imports

700

684

750

750

0

760

MY Imp. from U.S.

0

0

0

0

0

0

MY Imp. from EU

0

0

0

0

0

0

Total Supply

764

748

779

773

0

777

MY Exports

0

0

0

0

0

0

MY Exp. to EU

0

0

0

0

0

0

Industrial Dom. Cons.

0

0

0

0

0

0

Food Use Dom. Cons.

735

720

750

750

0

760

Feed Waste Dom. Cons.

0

5

0

6

0

7

Total Dom. Cons.

735

725

750

756

0

767

Ending Stocks

29

23

29

17

0

10

Total Distribution

764

748

779

773

0

777

Oil, Coconut

Oil, Coconut

2015/2016

2016/2017

2017/2018

Market Begin Year

Jan 2016

Jan 2017

Jan 2017

Vietnam

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Crush

255

263

260

269

0

272

Extr. Rate, 999.9999

0.6314

0.6312

0.6308

0.6283

0

0.6287

Beginning Stocks

15

15

16

11

0

7

Production

161

166

164

169

0

171

MY Imports

2

2

2

2

0

2

MY Imp. from U.S.

0

0

0

0

0

0

MY Imp. from EU

0

0

0

0

0

0

Total Supply

178

183

182

182

0

180

MY Exports

2

12

2

13

0

14

MY Exp. to EU

0

0

0

0

0

0

Industrial Dom. Cons.

0

55

0

56

0

57

Food Use Dom. Cons.

160

105

165

106

0

107

Feed Waste Dom. Cons.

0

0

0

0

0

0

Total Dom. Cons.

160

160

165

162

0

164

Ending Stocks

16

11

15

7

0

2

Total Distribution

178

183

182

182

0

180

Meal, Fish

Meal, Fish

2015/2016

2016/2017

2017/2018

Market Begin Year

Jan 2016

Jan 2017

Jan 2018

Vietnam

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Catch For Reduction

0

0

0

0

0

0

Extr. Rate, 999.9999

0

0

0

0

0

0

Beginning Stocks

15

15

12

35

0

45

Production

140

450

140

460

0

470

MY Imports

85

115

100

120

0

125

MY Imp. from U.S.

0

0

0

0

0

0

MY Imp. from EU

0

0

0

0

0

0

Total Supply

240

580

252

615

0

640

MY Exports

198

185

100

190

0

195

MY Exp. to EU

0

0

0

0

0

0

Industrial Dom. Cons.

0

0

0

0

0

0

Food Use Dom. Cons.

0

0

0

0

0

0

Feed Waste Dom. Cons.

30

360

140

380

0

400

Total Dom. Cons.

30

360

140

380

0

400

Ending Stocks

12

35

12

45

0

45

Total Distribution

240

580

252

615

0

640