Australian grains on a roll in Vietnam

AEGIC report predicts growing demand for premium wheat in Vietnam

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AEGIC has conducted market research into Vietnamese flour millers' wheat quality requirements for banh mi (bread) and noodles. PHOTO AEGIC

AEGIC has conducted market research into Vietnamese flour millers' wheat quality requirements for banh mi (bread) and noodles. PHOTO AEGIC

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Vietnamese demand for premium Australian wheat could jump 44 per cent by 2030.

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Vietnam's appetite for bread and noodles made from premium Australian wheat could jump 44 per cent by 2030, according to a new Australian Export Grains Innovation Centre (AEGIC) analysis.

AEGIC's report, 'Wheat and barley markets in Vietnam: their strategic importance to Australia', analyses Vietnam's grain market and economy to understand trends and suggest future actions for Australia.

Lead author Dr Peter White says Australia has historically been Vietnam's largest wheat supplier, providing about 1.5 million tonnes each year on average. However, in recent years, Black Sea wheat has been encroaching in the feed sector.

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"About 900,000 tonnes of Australian wheat has been used in Vietnam's higher priced food market and we expect increased demand to expand this market segment to 1.3 million tonnes by 2030 - a 44 per cent increase," Dr White says.

Strong reputation for noodles

"Similar to other South-East Asian countries, Australian wheat has an excellent reputation for noodles in Vietnam.

"Australian wheat is also Vietnam's first choice for bread (banh mi), which is quite unusual in Asian countries."

Similar to other South-East Asian countries, Australian wheat has an excellent reputation for noodles in Vietnam. - AEGIC report lead author Dr Peter White

"To maintain and grow this market, the Australian grains industry must make sure our wheat continues to meet the quality expectations of Vietnamese end-users as the economy grows and incomes increase."

Dr White says malt and feed barley are also potential areas of growth for Australian exports.

"Vietnamese people love their beer," he says.

"Vietnam is one of the top 10 beer markets in the world, and Australia is already their largest supplier of malt and malt barley.

"In the two years since the Intermalt malting plant opened in Vietnam (partly owned by CBH), barley imports into Vietnam have increased from about 50,000 tonnes to more than 150,000 tonnes in 2018.

"Australia supplied about 80 per cent of this barley. This malting plant has the ability to double its capacity by 2030."

Dr White says feed barley was another untapped market for Australia.

"The feed grain market in Vietnam has expanded rapidly in the past 10 years, but feed barley is not used in this market," he says.

"Educating Vietnamese buyers about the benefits of Australian feed barley could create valuable new opportunities for Australian barley."

AEGIC's chief economist, Professor Ross Kingwell, says Vietnam will remain an important market for Australia in the years to come.

As Vietnam's economy grows, it will be very important for Australia to carefully monitor and respond to the changing needs of Vietnamese flour mills, food manufacturers and consumers. - Professor Ross Kingwell

"Vietnam's middle class will make up one-quarter of the population by 2030 and will demand higher quality food and beverages, such as whole wheat breads, premium noodles and full malt beer*," Professor Kingwell says.

"As Vietnam's economy grows, it will be very important for Australia to carefully monitor and respond to the changing needs of Vietnamese flour mills, food manufacturers and consumers.

"Convenience and affordability will remain a major factor for most people in Vietnam for the foreseeable future, so Australian wheat for human consumption needs to be attractively priced whilst maintaining its preferred quality status in the market.

"Australian wheat remains under pressure from lower-cost grain producers such as Russia, Ukraine and Argentina, which will be an ongoing challenge."

*NOTE: Many lower-priced beers in Vietnam and other Asian countries use rice or other adjuncts (in addition to malt) during the brewing process.

Fact file

  • Vietnam is Australia's second-largest wheat market (after Indonesia), worth $460 million each year on average.
  • Australia exports about 1.5 million tonnes to Vietnam each year on average. About 900,000 tonnes of this is used in Vietnam's higher-priced food market. Increased demand could expand this market segment to 1.3 million tonnes by 2030 - a 44 per cent increase.
  • Vietnam is experiencing rapid social and economic change, with its economy set to double by 2030.
  • At 96 million people, Vietnam is the third-most-populous nation in South-East Asia. Its emerging middle class will double from 13 per cent to 26 per cent of the population by 2026 - however the middle class is small relative to other South-East Asian countries such as Indonesia.
  • Wheat consumption for food per capita in Vietnam has increased from five kilograms in 1990 to more than 16kg in 2018, and will continue to grow to about 23kg by 2030.
  • Barley imports into Vietnam have increased from about 50,000 tonnes to more than 150,000 tonnes in 2018. Eighty per cent of this is from Australia. This could potentially double by 2030.
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