SASKATOON – A nation of 72 million people with a taste for noodles and French-style breads and a growing economy is bound to attract the attention of wheat and flour exporters.
That description fits Vietnam, a country often overlooked when analysts talk about the fast-growing agricultural markets of southern Asia.
But Canada, the United States and Australia have all been investigating the situation there recently, sending over market development teams and assessing the country’s desire and ability to import wheat.
“It’s a potential market that we have a lot of interest in right now,” said Canadian Wheat Board information officer Patty Rosher. “We are looking to sell them some milling-quality wheat.”
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Vietnam’s annual per capita wheat consumption is a relatively low five to 10 kilograms, but according to a recent article in World Grain magazine “some observers think Vietnamese consumption of wheat-based foods could increase sharply, as has occurred in other countries in southeast Asia.”
U.S. Wheat Associates, an export market development organization funded by American wheat growers, has sent a number of trade missions to Vietnam in the past two years, including technical assistance for millers and bakers.
Right now there is just one flour miller in the entire country, capable of grinding about 100,000 tonnes of wheat annually, but a number of foreign organizations have offered to assist the government in expanding milling capacity. That would mean more wheat imports.
More mills
“U.S. Wheat (Associates) estimates that the construction of new mills in Vietnam will result in additional mill capacity that will require at least one million tonnes of wheat within the next several years,” said Paul Dickerson, the organization’s regional vice-president for southern Asia.
Right now, Vietnam imports only about 60,000 to 70,000 tonnes of wheat annually, most of it from Australia.
Canada shipped 8,000 tonnes in 1991-92, according to Canadian Grain Commission statistics.
However the country has been a major importer of wheat flour, buying about 400,000 tonnes annually, mainly from China, Singapore the European Union and Japan. Shipments from Canada have averaged 22,000 tonnes over the last four marketing years.
Lynne Thomson, a federal government official familiar with trade prospects in Vietnam, said that while Vietnam is a good potential market, it’s not yet on a par with some of the other more developed countries in the region.
“The economy is expanding and growing, yes, but it’s growing from nothing,” she said. There are essentially no roads, telecommunications is limited and nothing is very reliable.
“When it comes to port handling or rail transport and certainly facilities for handling grain … on an in or an out basis, there’s nothing really in place.”
International agencies like the World Bank and the Asia Development Bank are working with the Vietnamese government to finance some joint ventures aimed at improving some of that infrastructure but it’s still early.
“Things are beginning to happen, but by no stretch is it ready for what our people are ready for,” said Thomson.
Keith Broeder, Saskatchewan Wheat Pool’s general manager of international business, was in Vietnam about a year and a half ago looking for opportunities to sell the company’s expertise in areas like grain handling, storage and processing, but nothing concrete came of it.
“I wouldn’t say there wasn’t opportunity, but there was no funding available,” he said during an interview from Vancouver.
About four months ago he was in contact with a Vietnamese co-operative that was interested in building a flour mill, but that fell through due to lack of government support.
“They’d be very happy if somebody in the West invested but the difficulty is how do you ever get paid back,” said Broeder.
Don Neufeld of Winnipeg is a director of Agri-Tec Canada Inc., a consortium of 18 companies involved in offshore sales of agricultural equipment and technology.
He said while there is potential in Vietnam, it is overshadowed by developments in China and other more developed countries in the region.
But he added the consortium has only visited Vietnam once and it often takes a number of visits to make leads pan out.
“Certainly there are projects there that are of interest to us, but it’s not a priority,” he said.
