Russia Becomes Vietnam’s Leading Supplier of wheat

According to the USDA Global Agricultural Information Network (GAIN) reports released last month Russia became Vietnam’s leading supplier of wheat, as imports from Australia fell significantly.

Russia exported an estimated 1.7 MMT of wheat into Vietnam in MY18/19, gaining a 50 percent market share.

Post estimates stagnant wheat consumption on both the uncompetitive price of feed wheat and the flat use of milling wheat. The latter is due to Vietnam’s Plant Protection Department’s (PPD) ongoing quarantine pest inspections.

Feed wheat use varies depending on its price differential with imported corn. Feed wheat prices were running lower or at nearly the same level as compared to corn prices from the second half of 2016 to August 2018 (see Figure 1).

However, wheat prices have been diverting higher since then, thereby resulting in reduced feed wheat consumption. Increasing prices have also coincided with an outbreak of African Swine Fever (ASF) that began in early 2019. Producers have cut wheat inclusions in feed in order to reduce costs.

U.S. wheat is considered high quality and is used by Vietnamese mills for blending as a cost-effective way to improve the value of their flour products. Recently, U.S. wheat imports have been steadily rising, reflecting the increased demand for premium quality products.

However, PPD’s ongoing quarantine pest inspections have discouraged shipments of U.S. wheat since the end of calendar year 2018. The local wheat milling industry has faced difficulties in sourcing high quality wheat, especially soft white wheat. Feed industry sources have also noted that the inspections are reducing the use of quality ingredients in feed.


Categories: Asia, Industry, news

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