August 23, 2010

Vietnam wheat imports rise on high local demand

An increase in local wheat demand in the Vietnamese market has led to a sharp rise in wheat imports during the first seven months of the year, even as global wheat prices continue to rise.

More than 1.4 million tonnes of wheat were imported during the first seven months of the year-equal to the import volume for 2009, reported the Ministry of Agriculture and Rural Development (MARD). In July, 230,000 tonnes of wheat was imported, worth US$56 million.

Hoang Kim Giao, head of MARD's Animal Husbandry Department, said the inflation of corn prices earlier this year prompted animal feed producers to begin to buy wheat.

Phan Hong Lien, an analyst at the Vietnamese Market Analysis and Forecast Joint-stock Company, said wheat cost US$220 per tonne for imports from Turkey and Russia, while imported corn prices stood at US$240-250 per tonne.

Nguyen Hong Van, deputy general director of the Vietnam Animal Husbandry Joint Stock Company, said his company followed the fluctuations of the world animal feed market and forecast that prices would continue to increase because of severe weather conditions in regions where the crop is produced.

The price of wheat, corn, cassava and rice were likely to increase sharply by the end of this year, he said. Therefore, the company had imported wheat to store when prices were lower earlier this year.

The global price of wheat increased by 80% against last month's prices. Wheat now costs US$280 per tonne, a 23-year high.

Le Ba Lich, chairman of the Vietnam Animal Feed Association said raw material imports for the animal feed processing industry increased sharply because domestic supplies were unable to meet the industry's demand.

In the first seven months of the year, the import value of raw materials for the animal feed industry saw an on-year increase of 30% that was worth US$1.38 billion, which excludes wheat importation.