Vietnamese imports of soybean meal for animal and fish feed may rise to a record, making the country Asia's biggest importer alongside Indonesia, according to the US government.
Imports may expand 5 percent from last year to 2.6 million metric tons, according to a report by the agricultural attaché's office at the US Embassy in Hanoi posted on the website of the US Foreign Agricultural Service.
Soybean meal purchases by Vietnam have tripled since 2002 as the country's imports overtook Thailand, South Korea, the Philippines and Japan.
Purchases are "at a high level because of demand from the pork, poultry and aquaculture feed industries," Nguyen Huong of the agricultural attaché's office said a note dated April 15 and posted yesterday.
Seafood was Vietnam's fourth-biggest export in the first quarter this year, with shipments rising 15 percent from a year earlier to $861 million, according to the General Statistics Office in Hanoi.
Vietnamese cattle meat production almost doubled between 2003 and 2008, while pig meat output rose 42 percent in the same period, according to figures from the Food & Agriculture Organization of the United Nations.
"Soybean meal is fundamental to many agriculture-related industries in Vietnam," said Andrew Speedy, the FAO's chief representative in Hanoi. "There is the potential to expand soybean production here, but there's still no capacity for soybean processing."
Vietnamese government plans to increase production of oilseed crops, including soybeans, are being hampered by high input costs and low yields, according to Huong.
"Farmers have no economic incentive to expand their production areas," Huong wrote. "The first commercial crushing facility in Vietnam will not begin operating at full capacity until the third quarter of 2011."
India and Argentina are the top suppliers of soybean meal to Vietnam. Shipments from India slumped 42 percent last year to 1.01 million tons, while Argentine exports more than doubled to 984,000 tons, according to the US report.
"This shift was due to the combination of cheaper freight rates available from Argentina as ships sought to pick up back-haul cargoes at reduced prices and the higher quality of Argentine meal compared with Indian meal," Huong wrote.
"India will remain the leading supplier of soybean meal because of its shorter transport time, but both the US and Argentina are gaining market share because of quality," the report said.