High Global Prices Slow Down Vietnamese Corn Imports in 2021-22

Published 2022년 6월 13일

Vietnamese corn imports have been increasing over the last four seasons. The 2021-22 marketing year is an exception, with maize purchases trailing behind last year's results. Vietnamese maize imports plunged to 4.91 million mt, down 29% YoY in the first seven months of the current season, as international corn prices diverted demand from corn to cheaper substitutes. The Vietnamese Government has reduced the corn import tariff from 5% to 2% to boost imports.

Vietnamese corn imports were significantly lower each month of the 2021-22 season, with the lowest volumes purchased in December 2021 and April 2022. In December 2021, Vietnamese maize imports totaled 510,000 mt, down 48% YoY, whereas in April 2022 – 483,000 mt, down 28% YoY.

Source: Vietnamese Statistical Office, Customs Office

The decrease in imports reflects soaring corn prices in the international market, leading to the livestock industry's fall in coarse grain demand. The average price of imported maize in April 2022 stood at USD361/mt CIF local ports, up 27.5% compared to the same month of 2021. Many small and medium livestock farmers have experienced a jump in production costs caused by COVID lockdowns in the country and global supply disruptions in 2020 and 2021. Therefore, they have to substitute more expensive corn with cheaper alternatives to stay competitive in the market.

At the beginning of 2021-22, Vietnamese importers ramped up purchases of feed wheat as a corn substitute. Feed wheat import prices were 5% lower than domestic and imported maize. From July to April 2021-22, the country imported 3.92 million mt of wheat, up 34% YoY. In H2 of the current season, wheat imports slowed.

The geographical structure of corn imports has also changed in the ongoing marketing year, as Vietnam began to look for the lowest prices in the international market. Argentina accounted for 65% of all the maize imports to Vietnam in H1 2021-22, overtaking Brazil's position because of lower prices. On W1 June 2022, Argentinean commodity offers ranged from USD310-315/mt FOB, down USD15/mt compared to Brazilian prices. At the same time, Vietnam bought cheaper corn from India, other Asian countries, and South Africa. The share of the mentioned countries rose from 8% in 2020-21 to 24% in 2021-22.

In H2 2021-22 and 2022-23, Vietnamese corn imports are likely to increase because its domestic production is forecast to fall, as local farmers prefer to grow more profitable crops, and feed wheat prices have risen significantly.