Focus on Vietnam

Vietnam is in the midst of its most extensive restructuring plan with the goal of creating a leaner, more responsive government that drives economic growth and propels it to a modern industrial country and eventually a high-income developed nation.

Part of the plan included forming the Ministry of Agriculture and Environment (MAE) by merging the Ministry of Agriculture and Rural Development with the Ministry of Natural Resources and Environment. The department started operating under the new structure on March 1, according to the Foreign Agricultural Service (FAS) of the US Department of Agriculture.

“While these reforms aim to improve coordination and efficiency, they may also present challenges,” the FAS said. “Businesses should anticipate potential delays in administrative processes such as approvals, licensing and permits during the transition period.”

The new MAE department oversees agriculture, forestry, fisheries, irrigation, disaster prevention, rural development and environmental protection. The deputy prime minister who oversees the MAE is focused on ensuring development while protecting the environment and “aligning agricultural policies with sustainability and food security,” the FAS said.

Agriculture is a significant portion of the country’s economy, employing 26.5% of the population and accounting for 11.9% of the gross domestic product. The agriculture sector, which includes crops, forestry, husbandry and fishery, grew by 3.3% in 2024, despite challenges from natural disasters, storms and floods, the FAS said.

Almost 40% of the total land area of Vietnam is dedicated to agricultural production, according to the Food and Agriculture Organization (FAO), with the climate favorable to rice production, which dominates the agricultural area, followed by corn and rubber.

In the last several decades, Vietnam has gone from one of the world’s poorest countries to a low middle-income country with annual GDP growth among some of the fastest in the world. It also has transformed from a food-insecure nation to one of the world’s leading exporters in food commodities, the FAO said.

By 2030, the middle class is expected to make up one-quarter of the population and it will demand higher quality food and beverages, according to the Australian Export Grains Innovation Centre (AEGIC). Wheat consumption continues to grow, increasing from 5 kg per capita in 1990 to more than 16 kg in 2018 and an expected 23 kg by 2030, the AEGIC said.

“Consumption of wheat as food for people has increased steadily, while consumption within the animal feed industry has jumped from nearly zero up to 3 million tonnes in the space of 10 years,” the AEGIC said.

Wheat consumption in 2025-26 is estimated at 5.3 million tonnes, the FAS said, based on continued demand growth, particularly in the food sector. Consumption in 2024-25 was estimated at 5.2 million tonnes.

The wheat milling industry continues to expand to support growth in the instant noodle and bakery sectors. About 38% to 40% of wheat flour is used to produce instant noodles and other food products at large factories, the FAS said. Another 25% to 30% is used by small bakeries and 20% to 25% (mainly wheat bran) is used in aquaculture feed production.

“The rest is used by restaurants and hotels, by consumers at home, and at plywood factories in the production of adhesives,” the FAS said.

Top flour producers in Vietnam, which account for about 50% of the market, include Vimaflour, MeKong, Interflour and Binh Dong.

Flour exports have increased more than 20-fold since 2001, according to the AEGIC, making Vietnam the largest exporter in Southeast Asia. Wheat flour exports in 2025-26 are estimated at 380,000 tonnes, up from 350,000 tonnes in 2024-25. Main markets for wheat flour include Thailand, Philippines and Hong Kong.

Vietnamese wheat flour is now approved for export to Taiwan, the FAS said, citing media reports, thereby opening a new market for the milling industry.

Feed wheat increasingly is used in Vietnam’s growing livestock and aquaculture sectors, the FAS said, and feed mills have started substituting wheat for corn in animal feed formulations due to its lower cost and ready availability.

“Feed mills are using the availability of feed wheat to lower supply chain risks by diversifying feed inputs,” the FAS said.

Vietnam produces no wheat, importing all its needs. Total imports in 2025-26 are estimated at 5.6 million tonnes, based on strong demand growth, according to the FAS. Imports in 2024-25 are estimated at 5.72 million tonnes. Australia, Ukraine and Brazil were the main suppliers in 2024-25, followed by the United States, Russia and Canada.

Australia, although still the largest supplier of milling wheat at 24% of market share, has been losing ground to Canada and the United States as well as less expensive wheat from Brazil, Russia and Argentina.

Unlike wheat, rice consumption has been on a steady decline over the past decade, according to the Vietnam Household Living Survey. The average monthly per capita rice consumption was 6.5 kg, down 40% from 2008.

The data shows disparities in consumption patterns across regions and income groups, the FAS said. Rural residents on average consume 7.1 kg of rice per month compared to 5.5 kg for urban residents. High income households consumed 5.9 kg per month while the lowest income group consumed 7.3 kg.

 “This trend highlights a structural shift in dietary habits driven by urbanization and rising income levels,” the FAS said. “Consumers are increasingly diversifying their diets, moving away from rice as a staple and incorporating more protein, fruits and processed foods into their diet. This shift is expected to increase demand for rice in food processing industries, such as noodles, rice paper and rice flour.”

Rice harvested area is expected to decline slightly in 2025-26 to 6.79 million hectares with total paddy production expected to decrease to 41.6 million tonnes from 42 million tonnes last season. Rice farmers are continuing to switch to more profitable crops, the FAS said.

Exports for 2025-26 are estimated at 8.2 million tonnes, compared to an estimated 8.5 million tonnes in 2024-25. Robust growth demand is continuing in Asian and African markets.

Asian countries account for 70% of Vietnam’s rice exports, while African countries account for another 26%, the FAS said. The Philippines is the largest importer, buying 45% of the country’s rice exports.

Corn production is expected to drop slightly to 4 million tonnes in 2025-26, from 4.1 million tonnes the previous year. Yields have improved along with increased use of imported hybrid corn seeds, and weather conditions also have been favorable. However, acreage has been on a long-term downward trend, the FAS said.

Consumption is estimated at 15.75 million tonnes in 2025-26, nearly unchanged from 2024-25. Animal feed accounts for 85% to 88% of total corn consumption as the domestic livestock and aquaculture sectors continue to grow.

At the same time, exports of local feed ingredients such as rice bran and cassava are increasing, creating more demand for imported corn for feed. Feed demand in calendar year 2026 is estimated slightly higher at 29.5 million tonnes, up from 28.7 million tonnes in 2025.

Tags: rubber, exports, forestry, corn, environmental protection, rice, irrigation, Vietnam, feed wheat, agriculture, disaster prevention, Production, rural development, wheat, flour, consumption, fisheries