April 5, 2011
 

Vietnamese dairy filled with prospects

 

 

Vietnamese diary has become one of the world's quickest growing opportunities for agricultural exporters of both milk products and hay being imported to bolster cow output.

 

Vietnamese imports of milk and dairy products which it relies on for three-quarters of supplies soared 37% to US$708 million last year, reflecting buoyant consumption as well as a rise in prices.

 

The market has enormous growth potential yet given prospects of growing affluence in a country in which milk consumption is still taking hold, with per capita consumption, at 15 kilogrammes a year, less than half the Asian average.

 

Domestic producers, while being encouraged by Vietnam's government, have only a limited ability to meet demand, with more than 95% of cows on small farms, with at best seven cattle. Only 10% of producers use milking machines.

 

"Vietnam's dairy market is rich with opportunities," USDA attaches in Hanoi said.

 

"A growing population with a rapidly increasing per capita income is setting the stage for a decade of transformational growth in the Vietnamese dairy product import sector."

 

It was exciting to see a sector creating opportunities in nearly every area of the overall dairy market, including the high-quality forage being imported in increasing quantities to raise milk yields per cow.

 

The attaches forecast strong demand for milk products and forage in the immediate and medium-term future.

 

Areas of consumption growth included baby milk, as the growing number of mothers in the workplace reduces the rate of breast-feeding their offspring.

 

"Increasing numbers of Vietnamese women joining the workforce has led to an increase in bottle feeding," the attaches said, noting sharp growth in the market for powdered baby milk.
 

The ice cream market had strong possibilities, given the current relatively low, but increasing, annual consumption rates of one litre/head.

 

Consumer demand for cheese looked set to pick up from low levels thanks to the increasing influence of Western cuisine on the Vietnamese diet.

 

"In particular, the younger population, which is more familiar with dairy products than the previous generation, will likely be the drivers of this increased demand."