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Large wheat imports surprise economists
Just within the first seven months of 2010, Vietnam imported 1.4 million tons of wheat. Economic experts say the figure is unbelievably high, equal to the import volume for all of 2009 and double that in 2008.
Unbelievable figure
In mid-July 2010, a ship carrying 50,000 tons of wheat docked at the port in Ba Ria-Vung Tau province. Prior to that, the importer planned to head for its depot and gradually sell its products to domestic animal feed producers. In fact, the importer sold everything within three days.
Witnessing trucks queuing up to carry wheat from the port to their companies, the director of a big animal feed production company in Dong Nai uttered: “I cannot believe that Vietnam imports such a high volume of wheat.”
According to the Ministry of Agriculture and Rural Development, in the first seven months of 2010, Vietnam imported more than 1.44 million tons of wheat with import revenue of $350 million, an increase of 80 percent over the same period of last year. The import volume rose well above 2009 totals and was double the volume for 2008.
Animal feed producers anticipate that, even though the wheat price has increased significantly since the second half of July, the volume of imported will continue rising.
Where’s the wheat going?
Pham Duc Binh, General Director of Thanh Binh Company, stated that imported wheat is used to make animal feed. One reason for the sharp increase is the attractive price on the world market. In the second quarter of 2010 wheat stood at only $200 per ton, compared with higher-prices alternatives like maize or manioc.
According to Phan Hong Lien, an analyst from Agromonitor, a market survey and analysis firm, in mid-2010, some contracts with Turkey and Russia set prices even lower than maize prices ($220 per/ton vs. $230-240/ton).
Hoang Kim Giao, Head of the Livestock Husbandry Department under the Ministry of Agriculture and Rural Development, also thinks that the overly high prices of maize have prompted companies to seek cheaper materials. Currently, domestic maize products are selling at 5500-5600 dong per kilo, while imported maize is sold at 5400. Wheat, in contrast, costs 4200-4500 dong per kilo.
Vietnam must import 90 percent of materials
According to Binh, the percentage of imported products in Vietnam’s animal feed has climbed to 90 percent, not 60-70 percent as previously thought. The amount of money spent to import animal feed products and animals in the first seven months of 2010, not including wheat, reached $1.38 billion, increasing by 30 percent over the same period of 2009.
Giao claimed that it is not feasible for Vietnam to self-supply materials for animal feed production.
Binh stressed, in contrast, that it is really inconceivable that Vietnam, an agricultural country, cannot produce enough materials on its own.
vietnamnet, Tuoi tre
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