Vietnam’s 2016-2017 wheat import to surge 67% on year on strong feed demand: USDA
Vietnam’s wheat import for the 2016-2017 marketing year (July-June) is estimated to surge 67.4% year on year to 5 million mt, largely on strong feed demand, according to the latest grain supply-demand forecast released by the US Department of Agriculture.
USDA’s projection for Vietnam’s wheat import is also seen to rise sharply from its estimate of 3.6 million mt for January, the report showed.
A strong demand from the feed industry, particularly from the aquaculture industry, such as shrimp, helped boost demand for feed wheat, sources said.
Feed wheat accounted for about 25% of the imported wheat in Vietnam, traders said.
“Feed wheat from Australia are available at under $200/mt CFR Vietnam, whereas feed corn from Latin America are offered at above $200/mt CFR,” a trader said, to emphasize price competitiveness of feed wheat against corn. Changing food habits, including a rise in consumption of Westernised fast food items, has also helped spur demand for feed or milling wheat, sources added.
Wheat import in Vietnam is subjected to a 5% import tariff, although Australian wheat enjoys duty-free access to Vietnam under the Australia-Vietnam Free Trade Agreement, which became effective since January 2016.
Consequently, Australian wheat will continue to dominate Vietnam’s wheat market, although the variant’s market share has fallen from 70% in the 2014-2015 marketing year to about 40% in 2015-2016, according to USDA’s Foreign Agricultural Services report in September 2016.
In the calendar year 2016, Vietnam imported 1.63 million mt of Australian wheat, up 44.2% year on year, according to Vietnam’s custom data released in mid-January. The rise in 2016’s import volumes was because of competitive pricing and TFA agreement, traders said.
The Australian Premium White was assessed at $205/mt FOB Western Australia on Thursday.