WASHINGTON, D.C., U.S. — In Vietnam’s Mekong River Delta, there are about180,000 tonnes of paddy less than the U.S. Department of Agriculture’s (USDA) official number for the same marketing year 2015-16 due mainly to the impact of drought weather caused by El Niño that resulted in lower production in the spring crop in the Mekong River Delta, the Foreign Agricultural Service said in an April 19 report. According to another MARD’s estimate, due to drought and saltwater intrusion, there were about 106,000 hectares of rice affected by drought and salinity in two years 2015-2016, the market year 2014-15 winter crop; the market year 2014-15 late autumn crop; and the market year 2015-16 spring crop. The water shortage and salinization, are also threatening the upcoming autumn crop in the Mekong River Delta.

In March 2015, the Vietnamese Ministry of Agriculture and Rural Development (MARD) approved three genetically modified (GM) corn varieties for commercial planting. This is the final step in the regulatory approval process for Vietnam to commercialize biotech corn. In April 2015, the approved GM corn varieties were planted making Vietnam the 29th country to commercialize a biotech crop in the world.

The local corn production areas have been gradually increased but not changed markedly over time, reflecting the Vietnamese government policy encouraging the increase of corn cultivation for supplying the local feed industry. However, local corn production face challenges by the competitive price corn supplied by giant corn growers like India, Argentina, and Brazil. Since 2014, when international corn prices were slashed lower than the all-time prices for Vietnamese corn, there has been abnormal corn volume imported into the country, despite the supply has been much higher than the local demand.

In Vietnam, the growth of baked wheat-based products and noodles requires high quality wheat, which possibly favors increased consumption of U.S. wheat. The recent year-on-year volume of U.S. wheat exported to Vietnam is steadily increasing. This situation justifies the increase demand for premium quality wheat. Recent improvements in trade-related infrastructure, such as deep sea ports that can receive Panamax vessels, should help U.S. wheat be more competitive by reducing ocean freight costs.

In general, feed wheat can be an alternative feed source in place of corn. Imports of feed wheat depend greatly on its price competitiveness with corn prices. Feed wheat imported in market year 2014-15 increased sharply due to its price competitiveness. The first volume of 86,000 tonnes of U.S. feed wheat was shipped into Vietnam in market year 2014-15 and another 68,000 tonnes was shipped into Vietnam during July-February market year 2015-16.