Market Drivers and Opportunities for Oils and Fats in Vietnam
VIETNAM is one of the most rapidly growing economies in Asia, with its Gross Domestic Product (GDP) valued at US$124 billion (RM377.33 billion) in real terms, and with the country ranking 43rd in the world in terms of purchasing power parity in 2011. Even through the financial crisis, Vietnam has managed to grow steadily, year after year, and is expected to accelerate in the years ahead. From 2013 to 2016, it is forecast to expand at an average of more than 7%.
Vietnam’s economic prosperity has put a positive effect on the import of palm oil into the country, especially Malaysian palm oil. Since 2007, there is a significant pattern between changes in Vietnam’s GDP and changes in palm oil import. Therefore, the strong GDP growth forecast for Vietnam in the coming years will likely reflect the continued strong growth of palm oil import into the country.
However, the Eurozone crisis and China’s slowing growth has affected Vietnam’s manufacturing sector, which caused Vietnam’s GDP growth from the government’s target of 6% to drop to just around 5.1% in 2012.
This is reflected in the country’s decreased import of palm oil, which is forecast at 8.2% in 2012, compared with 8.63% in 2011. However, this figure is still high. The January-October 2012 data recorded 380,405 MT of Malaysian palm oil imported by Vietnam, as compared with 349,550 MT imported during the same period in 2011.
Thanks to Vietnam’s economic prosperity, the per capita income of the Vietnamese has also increased over the years. This is especially true in the urban areas as the urban population numbers continue to rise, bringing together lifestyle changes due to work time and increasing income.