Soybean, often referred to as a "shining pearl" in the commodity trading market, holds immense potential for investors seeking lucrative opportunities. In Vietnam, soybean is a food with a long and important tradition, providing the main source of protein for humans, an indispensable component of traditional and modern meals. The current Vietnamese soybean market is very diverse and rich in quality and quantity.
Soybeans on the Vietnamese market are partly grown and produced domestically and partly imported.
Soybean production and consumption in the world.
Soybeans are cultivated in various regions around the world, with major producers including the United States, Brazil, Argentina, China, and India.
The major soybean exporters in the world are the United States and Brazil, each of which exports more than half of its annual soybean harvest. USDA forecasts global soybean exports in the 2020/21 crop year to reach 167.82 million tonnes. In particular, USDA raised its forecast for soybean exports from the US and Paraguay to 59.87 million tons, respectively. and 6.3 million tons compared with 2019/20, but reduced the forecast for soybean exports for Argentina and Brazil to 7 million tons and 85 million tons, respectively.
The world's largest soybean importers include China, the EU, Mexico and Japan. In which, China - the world's largest soybean importer - imported 6.04 million tons of soybeans from the US in November 2020, an increase of 136 percent year-on-year in 2019.
Soybean - A “Shining pearl” of the Vietnam market.
In Vietnam, soybean - a "shining pearl" with a long and important tradition, providing the main protein for humans, an indispensable component of traditional and modern meals. The total soybean cultivation area in Vietnam varies annually depending on factors such as market demand, weather conditions, and government policies. In recent years, the soybean cultivation area has ranged between approximately 150,000 to 200,000 hectares. Various regions in Vietnam contribute to soybean cultivation. The northern provinces, central coastal regions, and the Mekong Delta are among the key areas where soybeans are grown. Farmers in these regions leverage suitable agro-climatic conditions and implement appropriate farming practices to cultivate soybeans.
Soybean demand in Vietnam.
Vietnam's increasing population and changing dietary preferences present a significant opportunity for expanding domestic soybean production. The rising demand for soy-based products, including tofu, soy milk, and soy sauce, creates a potential market for locally produced soybeans.
Soybean oil is an alternative to animal fat, bringing many health benefits and safety for users. According to AC Nielsen Vietnam: Vietnam ranks third in the world, after China and Thailand in terms of soy milk consumption with about 613 million liters per year and seventh in the world per capita with 6.8 liters. /person/year. Besides the confirmed Vinasoy brand, Vinamilk and recently Nutifood and Hoang Anh Gia Lai Group have also started processing soy milk. The increasing demand for soy milk production and use leads to a very rapid increase in the demand for soy ingredients; Soy milk alone, from 400 million liters/year in 2010 to 613 million liters/year in 2014, an increase of 53%.
It can be seen that the demand for soybean products in Vietnam is extremely large. But the planted area in Vietnam is decreasing day by day, unable to meet the needs of the whole country. Therefore, it must be imported to meet processing demand.
An inadequacy between demand and production of soybeans in Vietnam.
In general, Vietnam's soybean area is not stable, domestic production of soybeans is only enough to supply about 8-10% of the demand.
The fact that more and more businesses invest in building soy milk factories leads to a very rapid increase in demand for soy ingredients; Soy milk alone, from 400 million liters/year in 2010 to 613 million liters/year in 2014, an increase of 53%. But according to the Department of Crop Production, variety is the weakest stage, the yield of soybean is only about 1.4 tons/ha/crop, while the world is at 3 tons/ha/crop. Although research agencies have selected and bred some varieties with yield over 2 tons/ha, even reaching 3 tons/ha, when planted on a large scale, they did not give the desired results.
93% is imported soybeans.
Domestic production of soybeans only meets about 7% of domestic demand, mainly for processing soybeans for milk and other foods, the remaining 93% is imported, mostly for animal feed processing. According to the General Department of Customs (GCO), in the first 10 months of 2019 Vietnam imported 1459,389 tons of soybeans with a value of 579,917,084 USD. The source of soybean imports in Vietnam is mainly from the US, Canada, Argentina, Paraguay, Uzbekistan, Cambodia, the Philippines,...
New directions to invest in domestic production.
The Vietnamese government has recognized the importance of soybean cultivation for food security and reducing import reliance. Various support programs, including financial incentives, subsidies, and technical assistance, are provided to farmers to promote soybean production and improve productivity. To support soybean cultivation expansion, the Vietnamese government has implemented initiatives such as providing subsidies, offering training programs, and facilitating access to improved seeds. These efforts aim to encourage farmers to increase the soybean cultivation area and improve productivity.
Soybean cultivation can be integrated into existing cropping systems, such as rice-soybean or maize-soybean rotations, providing farmers with diversification options and additional income streams. Crop diversification also contributes to sustainable agriculture and soil health improvement.
While the soybean cultivation area in Vietnam may be modest compared to some other crops, the government's support and efforts to enhance domestic production indicate a positive direction for the soybean industry in the country. By increasing the cultivation area and improving farming practices, Vietnam aims to strengthen its self-sufficiency in soybeans and reduce the need for imports.
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