Global Markets: Coarse Grains – Vietnamese Corn Imports Lowest Since 2017/18

    Harvested corn pouring into grain truck. Photo: University of Tennessee

    From 2018/19 to 2020/21, Vietnam imported over 10 million tons of corn annually, largely to meet growing domestic feed demand for swine, poultry, and aquaculture. However, at current reduced monthly volumes, Vietnam is anticipated to import just 9.5 million tons of corn in 2021/22 – the lowest since 2017/18.

    Most of this change comes from relatively low imports for the month of July 2022. Vietnam Customs reported imports of just 593,000 tons of corn – less than half the volume imported for the same month in 2021.

    The key driver of reduced imports has been the record high cost of imported corn during 2021/22. The average unit value of imported corn in June 2022 was $384/ton, a 27-percent-increase from $302/ton in June 2021. With such high and volatile corn prices, Vietnam likely reduced imports as a response.

    Vietnam purchased record imports of corn in 2019/20 and 2020/21 when corn was cheaper which led to nearly 2.7 million tons of corn stocks at the outset of 2021/22. To meet demand while corn prices are high, Vietnam is now drawing down from these extensive stocks.

    Per FAS/Ho Chi Minh City, current local prices of corn in Vietnam are lower than world prices, supporting the notion that destocking is occurring, and possibly a domestic production response. The drawdown is extensive – Vietnam is anticipated to nearly two-thirds fewer stocks remaining in at the end of 2021/22.

    The slowdown in imports appears to be temporary. Already in August 2022, corn imports reached 713,000 tons, up 300,000 tons from August 2021. As supply chain bottlenecks ease, and Vietnamese feed demand continues to grow as recovering tourism increases restaurant demand for animal products, the likelihood of imports as low as June of 2022 diminishes.

    European Union Corn Imports to Rise

    Heat and drought have negatively affected European Union (EU) corn production for 2022/23, which is forecast at 58.8 million tons, down 1.2 million tons from last month and 17 percent lower than last year’s crop. End users appear to be preparing for lower domestic supplies by importing heavily in August and likely into September.

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    As a result of the accelerated pace of imports near the end of the marketing year, USDA has boosted the import forecast for 2021/22 by 2.5 million tons this month, 16 percent over the previous month’s forecast. Of this volume, 1.0 million tons is assumed to be held in stocks to support feed use at the beginning of 2022/23.

    Stocks represent 11 percent of use which, while the highest since 2017/18, likely reflect internal market prices that favored the use of imported corn in some member states.

    Per EU Customs Surveillance data, from July 2022 to present, most imports have been sourced from Brazil. Year-over-year market share and volume are up 12 percent and 59 percent, respectively, for Ukraine. This is likely a result of Ukrainian efforts to export corn via land prior to the opening of the Black Sea grain corridor.

    EU corn imports for 2022/23 are currently forecast at 19.0 million tons to partially fill the domestic supply gap from lower production, as well as a shift to wheat for feed use due to lower prices. There is also continued uncertainty that exists around the future of export prospects for Ukraine, a major supplier to the European Union.

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