Vietnam has seen a near four-fold increase in grain imports over the last decade in a trend likely to continue and provide a further boost bulker tonne-mile demand.
Combined wheat, major coarse grains and soyabeans and meal shipments have gone from 4.7m tonnes in the 2009/2010 market year to a high of just under 18m tonnes in 2019/2020, according to the US Department of Agriculture (USDA).
“Vietnam recorded exceptionally strong growth in grain imports over the past decade,” Simpson Spence and Young (SSY) said in its latest monthly report.
The domestic demand growth is being driven by an expanding population, which has increased by 9m people — or 11% — in 10 years to 2019, according to the World Bank.
The shipbroker said this has driven up animal product consumption, leading to a large volume of coarse grain and soya imports that are intended for use in animal feed, while wheat tends to be used directly in foodstuffs. Vietnam also has a small, but expanding, biofuels sector.
“With seaborne shipments primarily sourced from Atlantic exporters — notably Argentina — this has been a source of sustained long haul trade growth,” SSY said.
“Similar to China, demand for feed grain imports for Vietnam’s pork industry fell due to African swine fever. However, meat demand continued to grow in other sectors, such as poultry and beef.”
Furthermore, SSY said the USDA has reported a “post swine fever consolidation” of the pork industry, which has resulted in the expansion of large livestock companies in Vietnam — a trend that usually supports demand for industrial feed mixes made from imported grains.
Recent labour disputes in Argentina are said to have disrupted grain supplies to Vietnam, opening up opportunities for exporters in Brazil and the US. However, supplies from the latter are said to be limited due to Chinese demand.
“Australian barley is another alternative and exporters have been searching for new markets following Chinese import restrictions,” SSY said.
“Small quantities have been shipped to Vietnam in the past, although growth at the expense of Atlantic cargoes would be negative for tonne-mile demand.”
South East Asia has emerged as a key growth area for grain imports in recent years, and the experience of Vietnam is similar to other countries in the region such as Indonesia and Thailand, according to SSY.
“Rising regional demand has supported long-haul trade growth, however, a combination of supply disruption and the re-emergence of Australia as a major grain exporter after several years of drought may alter trade patterns,” the shipbroker said.
